Get HR Data Integration Right to Accelerate M&A Value
In this post, we examine the importance of HR data integration in meeting performance objectives following a merger or acquisition, and how a leading US health insurer is using a MarkLogic Data Hub to integrate HR data and accelerate the value realized from a recent mega-merger.
M&A fails to deliver at scale
Since 2000, there have been more than 790,000 mergers and acquisition (M&A) transactions announced worldwide, according to the Institute of Mergers, Acquisitions and Alliances (IMAA). In 2019 alone, there were 49,849 M&A deals, or an incredible 136 on average per day.
Also, consider that more than half of all M&As fail to achieve their anticipated strategic and financial objectives, and that this failure rate is often attributed to various HR-related factors, such as poor motivation, loss of key talent, diminished trust and uncertainty of long-term goals.
Growth in M&A activity drives massive data integration requirements
Every time a deal is consummated, companies must undertake the tasks of integrating the assets of the businesses. This includes all physical, digital, and people assets, and always requires systems integration. Depending on the complexity of the companies to be combined, this integration work often takes many months and can even stretch into years, delaying the projected benefits to stakeholders.
While some companies have gotten quite good at effectively integrating assets of the new companies, there are many instances where IT underestimates the integration challenge. In some cases, important data gets discarded from one or more systems. In other situations, IT maintains the systems of the merged company with plans to properly integrate over time. Most times this takes longer than anticipated or never happens – creating a nightmare scenario for IT in holding together an architecture of disparate systems containing disconnected data of different structures and formats. The ability to govern and access the data in and across these systems becomes a major challenge, often creating friction between IT and business units.
Many businesses mistakenly believe that having an ERP or HCM (Human Capital Management) system, or dumping all the data into a data warehouse, makes this process easy. The reality is that most of these technologies are based on relational database architectures, requiring substantial effort to extract, transform, and load (ETL) the data before it can be accessed for business applications.
How do you know if your HR data is post-merger ready?
You’ve completed an acquisition or merger and now have to integrate all of the data sources from the other company with your systems. Here are some of the key questions you’ll need to consider when planning for the integration of your HR systems:
- Have all of the data source systems been identified?
- Where and how is the people data stored and secured?
- Does an enterprise canonical model exist?
- Has an ontology for HR data been defined?
- Has the other company already mastered its people data?
- What processes are being used to govern the people data?
- What applications are accessing the HR data?
- Are we using the optimal integration framework and software to combine the data for current AND future use?
The answers to these questions will not only affect how quickly you can integrate and start benefiting from the merged HR data, but can also help inform your overall data strategy.
Importance of getting it right
As mentioned, many companies underestimate the integration challenges in IT required to merge the data of two large businesses. Since people are a critical success factor for most M&As, effectively integrating HR data is paramount for realizing expected benefits in the near-term while building towards future-state operating models. Management relies on this integrated data for post-merger analysis and decision-making and failing to ‘get it right’ can increase the likelihood of business interruption, talent defection, declining sales, and market confusion over the direction of the organization.
The good news is that solutions exist to streamline complex M&A data integration and deliver critical HR data faster.
Case Study: Merging HR data using a MarkLogic Data Hub
After the largest merger between a pharmacy and health insurance giant was completed, the combined company started the process of integrating its assets. With around 300,000 employees combined across all 50 US states, the new organization recognized that integrating its HR data was mission-critical for achieving targeted objectives.
Fortunately, one of the two companies was already a MarkLogic customer and had previously integrated its HR data using our Data Hub platform. The company, a leading health insurer, had implemented a MarkLogic Data Hub in 2016 to unify its disparate HR data stored in over 200 formats and across 24 different data sources, hosted primarily inside relational databases, and build a future-state digital HR services delivery model.
With the MarkLogic Data Hub, the company was able to bypass costly and time-consuming ETL processes, and shorten the project delivery timeline by over 80%. Moreover, deploying the MarkLogic Data Hub provided the company with a flexible and trusted platform to handle any future integration requirements. A decision that ultimately “paid off” in an even bigger way a few years later when the merger occurred.
Utilizing the MarkLogic Data Hub for merging all HR data has allowed the combined company to realize similar benefits at greater scale, enabling it to meet its post-merger performance objectives more efficiently.
Deliver faster value from your HR data with MarkLogic Data Hub Service
Overcoming these challenges requires a data platform that enables you to integrate data across multiple systems, without the need for lengthy ETL processes, and consistently deliver more reliable data to downstream operational and analytical systems.
With 10x faster data integration, secure sharing, immediate data discovery, and the simplicity of one fully integrated platform built for the cloud, MarkLogic Data Hub Service gives organizations real-time access to all of their HR data allowing for a more agile, documented and secure HR data process.
Typical M&A data integration projects take many months to complete – and have a high probability of failure due to the speed of change. MarkLogic Data Hub Service enables organizations to build an actionable 360° view of their enterprise data with far better agility and governance than any other hub and spoke architecture, making it the ideal platform for M&A integration requirements.
For more information on how MarkLogic helps enterprises solve HR data integration challenges and deliver faster results, please visit MarkLogic Data Hub for Human Resources.