A recent merger and acquisition (M&A) update by Morrissey Goodale, shows that domestic M&A continues to soar 42 percent year-over-year. Mergers and acquisitions in the professional services industry are skyrocketing which means that many firms are learning how to successfully consolidate separate entities into one creating synergy. Much goes into the M&A process. Notably, a merger or acquisition requires significant effort in the areas of change management and rebranding, not to mention the continuation of efforts that drive the business in the first place.
However, as these professional services firms come together, probably the most consequential matter pertains to integrating the data, and many firms find themselves in a data integration quagmire. Common sense would tell us that it should be easy to combine data from entities within the same industry, but disparate systems and diverse implementations often cause data headaches when not approached carefully. So, what are some best practices to help professional services firms harness this (data integration) beast?
Pick Crucial Team Members
Choosing the team to make the relevant decisions about the data is the first, and most important, step. Ensure you have stakeholders from the acquiring firm to define current data and processes as well as from the acquired firm to understand the data coming in or stakeholders from both merging entities. At this point, the inclusion of a third party, such as Full Sail Partners, would be beneficial and would serve as a bridge between the uniting professional services firms to make the transition much smoother.
Include the Specialized Experts
A specialized consultant in areas such as finance, CRM or human resources is an enormous help when needing to identify changes to the acquired firm’s processes or merging firms’ processes as well as any training in the new system that might be required. These experts can manage the project as a whole and ensure that all parties are heard and that the timeline and budget are kept on track. They will call in other specialized consultants as needed to make sure there is the best possible assistance.
Incorporate a Data Migration Specialist
A data migration specialist can help locate and identify the data that needs to be migrated, whether it is all held in a single location or coming from multiple systems. This consultant will create an inventory of the data, and then begin profiling the data quality for the firm. Specifically, this expert will evaluate:
- Is the data clean?
- Is it useful, or can it be retired?
- Are there redundancies that need to be eliminated?
Once those issues have been identified, the work of cleansing and converting the data can begin. Data migration specialists do this all the time, and they know the best ways to handle the data as it flows through the extract, transform, load (ETL) process. Together with the data mapping, this ensures that the data moving into the new system is clean and compatible with the newly integrated professional services firm.
Data Alignment Musts
Whether the firm relies on internal specialists or brings in an outside consultant, there are areas where there must be data alignment in the Deltek Vision or Vantagepoint system or any ERP for that matter. Specifically, firms that are merging data need to align the following.
Will the resulting firm be tracking the new company within a multi-company database, or incorporating it completely into the existing company, possibly as its’ own profit center? If the former, make sure the existing system is configured to accept multiple companies and report on them correctly.
Will the resulting firm be using a different currency for the incoming company? Again, make sure the existing software can handle all the factors associated with a multiple currency environment. The storage of different currencies and methods of currency translation are just two factors that you must take into account. Be sure that your software can handle these issues, and that it is configured correctly.
Chart of Accounts
The chart of accounts for the incoming company must be mapped to accounts in the existing company, and any new accounts must be added into the software prior to moving over the new data. A data migration specialist can easily make these changes in your data for a smooth transition.
Record Alignment for all Key Tables (Unique Identifiers)
The new data will need to be reviewed for a number of factors, including:
- Formatting of key fields, such as project, employee and firm numbers,
- Duplicates in any of the key fields of the database and
- Bad data in the new company that should NOT be brought over.
Work Breakdown Structure (WBS)
Firms will often use different work breakdown schemes when tracking projects. This is one area where significant adjustments might need to be made in the incoming data. A thorough review of the existing data, and a comparison to the merging company’s data is necessary to avoid headaches down the road. Data transformation specialists should be involved at this point, as they have experience massaging the data prior to the merge.
Maintain Control to Harness the Beast
The secret to harnessing the data integration beast is to keep the process organized and controlled. Ensure leaders at the professional services firm use best practices and select the integration team wisely. With the right team in place, the changeover will be as seamless as possible.
Full Sail Partners’ consultants have years of experience in all aspects of mergers and acquisitions for professional services firms and have access to the best minds in the industry. Whether you are just beginning to consider M&A for your firm or you already have one in progress, we can provide support and help guide you through the process to a successful merger.
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