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In this episode Jason talks to Julia Bardmesser who has been in data leadership roles within the financial sector for over 20 years. Together they discuss the important role of data in mergers and acquisitions and how to successfully examine data capabilities to ensure a smooth transition. 

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In the context of mergers and acquisitions, data is usually not given much consideration in the decision-making process. However, the data held by a company and its data capabilities have the potential to be major assets that should not be ignored. 

00:57 Julia’s background as a programmer and how she transitioned into financial services

03:23 The importance of data in mergers and acquisitions

05:24 Why should a buyer look at the data capabilities of a company and what should they be looking out for

08:10 Why acquiring data capabilities is so important in a merger or acquisition

13:53 Things to consider when examining data of a company

17:38 How to examine the data capabilities of a company

19:46 Which questions people can ask when it comes to data in mergers and acquisitions

26:48 How to determine the value of data and how much opportunity exists

28:48 What companies who are considering selling or being acquired can do to make the transition easier

Why data is a major consideration in mergers and acquisitions

Data is a major consideration in mergers and acquisitions because it provides important information about the companies being considered for the merger or acquisition. This information can include financial data, customer data, market trends, and other key metrics that can help the acquiring company make a decision about the viability of the transaction. 

By analysing this data, the acquiring company can better understand the potential benefits and risks of the merger or acquisition, and make more informed decisions about whether or not to proceed with the deal. Additionally, data can also be used to identify potential synergies between the two companies, such as complementary product lines or customer bases, which can help to increase the value of the merger or acquisition.

Clearly defining the difference between good and bad data capabilities

It is very important to define what the data capabilities are of a business because it can be a valuable asset in any business. For example, data can sometimes be in the form of customer information but if you start to investigate you may realise that the only data known about the customers is what the staff know. This is important but still unreliable since staff can come and go. However if a business has a clearly defined CRM with a whole data ecosystem that details a customers preferences then that is much more valuable and can potentially increase the company’s value. 

3 factors stakeholders need to consider when acquiring data as part of a merger or acquisition

There are several factors that stakeholders need to consider when acquiring data, including:

Data availability: One of the first things that stakeholders need to consider when acquiring data is whether or not the data is actually available. This may involve looking at the company’s data collection and storage practices, as well as determining whether or not the data is accessible and can be legally obtained.

Data quality and capabilities: Another important consideration when acquiring data is the quality of the data. This refers to the accuracy, completeness, and relevance of the data, and whether or not it can be trusted to provide meaningful insights. Stakeholders need to ensure that the data they are acquiring is of high quality, and that any potential issues or biases are addressed before using the data for decision making.

Stakeholders also need to examine existing capabilities and whether or not extra staff or infrastructure will need to be added.

Data privacy and security: Finally, stakeholders need to carefully consider the privacy and security implications of acquiring data. This may involve looking at the data protection and privacy laws that apply to the data, as well as the company’s own data protection and security policies. It is important for stakeholders to ensure that the data they are acquiring is being handled in a way that respects the privacy of individuals, and that it is secure and protected against unauthorised access or misuse.

How to examine the data capabilities of a company

To more thoroughly examine the data capabilities of a company, it is important to not just rely on surface-level information and marketing materials, but to conduct a more in-depth analysis. Anyone can make a fancy powerpoint, but when it comes to intangible assets such as data it is important to dive deeper. This could involve conducting interviews with key personnel, reviewing the company’s data infrastructure and technology stack, and performing a data audit to assess the quality and value of the data they have collected.

It is also important to consider the potential value of the company’s data and the time and resources required to extract that value. You need to be able to see the potential “legroom” as well as estimating the costs and effort required to integrate the data into the acquiring company’s operations. Usually the unchartered territory of potential is almost equal, if not a greater driver of curiosity and opportunity than current capabilities. 

Furthermore, it is important to involve experienced personnel in the examination and inquiry process, as they will have the expertise and knowledge to properly assess by asking the correct questions. Examination and asking the right questions to get to the bottom of things is an art that is only perfected with experience. 

How to prepare your company’s data for an acquisition

If your company is preparing for an acquisition, there are several steps you can take to ensure that your data is ready for the transition.

First, it is important to conduct a thorough inventory of your company’s data and personnel responsible for data, including the data team and its function within the company, types of data you collect, where it is stored, and how it is used. This will help you understand the scope and value of your data, as well as identify any potential gaps or weaknesses in your data management processes.

Next, you should review and update your data governance policies and procedures to ensure that they are in line with industry standards and the requirements of the acquiring company. This may involve implementing new processes for data collection, storage, and access, as well as ensuring that your data is properly labelled and organised for easy integration with the acquiring company’s systems.

It is also important to consider the technical aspects of data integration, including the format and structure of your data, as well as the compatibility of your data with the acquiring company’s systems and technologies. This may involve working with the acquiring company to develop a plan for data migration and integration, as well as testing and validating the compatibility of your data with their systems.

Overall, the key to preparing your company’s data for an acquisition is to take a proactive and organised approach, focusing on identifying and addressing any potential challenges or issues that may arise during the transition. This will help ensure that your data is ready for the acquisition and can be effectively integrated with the acquiring company’s operations.

Conclusion

Data is a critical asset in the world of mergers and acquisitions. By thoroughly examining a company’s data capabilities and taking steps to prepare and integrate their data, acquiring companies can unlock significant value and gain a competitive advantage in their industry. In today’s data-driven business environment, having a clear understanding of a company’s data assets and the ability to effectively leverage those assets is essential for success