An In-depth Discussion
Enterprises are always being driven to innovate and reinvent themselves strategically. As a result, enterprises change their business portfolio through mergers, acquisition, and divestitures. As data has become closely interlinked with business operations, planning ahead and preparing IT for the divestiture is fundamental for success for all constituents.
In our experience, the organizations that manage data ownership classification and separation of data and systems can successfully divest and thrive upon deal closing.
When divestures take place, the challenge of identifying data ownership becomes critical. Transfer of ownership and management of the data to the correct business unit will ensure seamless use and access whilst adhering to compliance requirements. The top 3 most pressing challenges with divestures are:
- Segmenting assets, including technology infrastructure based on divestiture criteria
- Meeting finite timelines dictated by closing commitments, data center exits, etc.
- Seamless operations for all entities subsequent to closing
Meeting Finite Timelines Dictated by Closing Commitments, Data Center Exits, Etc.
Divestures are inherently complex and cumbersome across all fronts as separating business units is not an easy task. It is taking a complete puzzle (regardless of how it is in aggregate) and carving out pieces without having each of the pieces clearly cut out. Knowing where and how to detach becomes an art that requires careful understanding and execution.
A divesture is either done via the creation of a new entity or the sale to another entity and in doing so, external market commitments are given to the closing of the transaction. This timeline is critical as it has an impact on a variety of different areas.
First and foremost, capital markets will punish stock valuations if execution of the divesture is not done in the time commitments given. This could have an impact on the aggregate transaction as valuations are utilized to determine sale price with ‘triggers’ that could change the deal structure.
Secondly, contractual commitments may need to be transferred to the appropriate entity, including data centers, equipment, etc. These commitments include penalty clauses when they are not executed in a timely manner.
Finally, there is the ‘human factor’ where personnel retention is a direct correlation to morale. The longer team members have uncertainty around which entity they belong to, the greater the risk of losing key talent. Therefore, ensuring time commitments are met is essential to the overall divestiture.
Seamless Operations Subsequent to Closing
Once the transaction is complete, it is imperative that the operational businesses are able to function without a glitch. A new entity or BU has more pressure than existing entities as there is a spotlight on its first few quarters of operations. It needs to ensure it meets market expectations and delivers upon its operational and financial projections.
One key area of concern is the inability to access the underlying user or application data as decision making or automated processes tied to data access can come to a halt. Unfortunately, most companies realize this challenge afterwards and by then it has already costed them millions in operating losses, reduction in stock valuation, and a tarnished reputation.
Additionally, there can be compliance implications around access controls and loss or corruption of the data itself. Therefore, it is critical to have an effective data lifecycle management strategy in place to extract the greatest value from the data itself.
Digital enterprises that are undergoing a divestiture need a strong data management strategy in place to successfully separate and thrive.
Metadata Provides Insight into the Vast Majority of the Data Characteristics
StorageX Analytics provides a visualization of your data environment and gives you the required insight to empower actionable decision making.
Its thorough analysis of metadata via automation provides the necessary means to address and decipher the data webs in an accelerated and accurate manner. By knowing ownership, activity, and other key metrics, actions can be taken to successfully drive the divestiture process.
Mitigate Risk with Standardized Policies for Effective Data Management
Unstructured data requires standardization in order to protect organizations from facing compliance and legal exposure as well as security risks when divesting their business units.
StorageX creates standardized policies, so organizations can outline their business objectives to intelligently manage their data. Standardized policies decrease human errors, so organizations can mitigate risk and give compliance a top priority. Policy based replication also provides for synchronization of the data for backup and disaster recovery.
Achieve Deadlines and Ensure Data Security with Scalable and Automated Data Migration
Actionable automation is required to meet accelerated time commitments that are often a case in divestitures. Policy driven and intelligent data placement should be scaled to meet the needs of the transaction. Along with scalable data migration, it is crucial to provide accurate access to the data upon its landing. Data access is the single most important attribute to data management as its security is vital to protect its content. StorageX provides multiple means of security management that drive consistency and risk mitigation in the process!
Modernize your Data with Custom Metadata Tags for Reporting and Analytics Capabilities
As data is being distributed according to the separation of business units, the inclusion of custom metadata tagging enables search, discovery, and understanding the data relationships to get the most value, ensure operational effectiveness, and increase efficiency.
By classifying data and tagging it for categorization, businesses will ensure ongoing transparency of their data, and add further intelligence into their data repositories. Overall, a strong data infrastructure and data governance can provide reporting and deep analysis capabilities.
Journey to a Better Business
Although the factors outlined here seem self evident, most organizations manage their divestitures with point solutions rather than a holistic data management approach and platform.
StorageX is a dynamic file management platform that empowers you to analyze, move, manage and modernize your data where you need it and when you need it, from data centers to the hybrid or public cloud.
StorageX is built using industry standards and operates completely out of the data path, freeing your data from technology lock-in, complexity and risk. Digital enterprises that are undergoing divestitures of data centers, systems, and business units rely on StorageX for a one-stop solution.
Data Dynamics is a leader in intelligent file management solutions that empower enterprises to seamlessly analyze, move, manage and modernize critical data across hybrid, cloud and object-based storage infrastructures for true business transformation.
How does Data Dynamics give its customers a competitive edge when it comes to data management solutions? We help businesses and IT come together to achieve business objectives while intelligently managing enterprise data.
Data Dynamics has worked with 25 of the Fortune 100 companies and 6 of the 12 largest banks in the world. We have optimized more than 200 PB of data, saved 100+ years of project time, and over $100 million total cost of storage saved. Data Dynamics has worked with multiple financial enterprises to solve key business challenges and turn their data from a risk to an asset.