Minimize Negative Impact From BI M&A Activity Through Ongoing Operational Risk Management

Merger and acquisition (M&A) activity is common throughout the technology industry— and has been for decades. Between 2010-2020, 15,323 firms completed 41,796 M&A deals—averaging more than 4,000 deals a year, about 350 per month, or more than 10 per day. A relatively small percentage of larger and older public firms tend to make many of the acquisitions. They frequently engage in M&A to enter new “unrelated” business areas— more often making deals not with the aim to boost share price or performance, but to respond to competitive pressure from incumbents in their markets.

For almost every organization, the question is not whether M&A activity will hit home but, rather, when and to what extent it will affect the organization. Despite the magnitude and high frequency of M&A activity, Dresner Advisory Services data show only 25 percent of organizations report being impacted (highly likely, negatively) by business intelligence (BI) M&A activity. Furthermore, 45 percent of organizations report some degree of concern about BI M&A activity. But the majority— 55 percent—indicate no concern.

Given the increasing critical nature of data and analytics in most organizations, the failure to prepare and plan for potential BI M&A activity represents significant operational risk to the organization. Although not at the level of business interruption caused by a natural disaster, BI M&A activity—if it results in an organization needing to change its BI software—likely will result in short- to intermediate-term reduced ability to efficiently execute processes, make data-driven business decisions, and complete operations all of which could diminish performance and affect financial results.

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