Info Risk Higher for Acquisitions Than Mergers

Company acquisitions can have a devastating impact on information security and management, with the employees of acquired firms more preoccupied with the potential impact on their role than with the need to effectively integrate the information of both companies, according to new European research[1] by storage and information management company Iron Mountain. This lack of focus during an acquisition could leave information at increased risk of loss or exposure. The picture is different when companies merge, and employees stay focused on integration and ensuring company information remains well managed.

The top two information concerns of employees at acquired firms are: confusion around responsibilities for managing the information (34%) and the prospect of change to their information management systems (33%). Just over a quarter of employees (27%) at acquired firms worry about consolidating different sets of customer or company records, and less than one in five (17%) worry about how to deal with data discrepancies, duplication and overlap.

This contrasts sharply with the concerns of staff at the acquiring firm, where 41% worry about integrating the two data sets and 34% are concerned about the quality of the data.

Furthermore, one in three employees of acquired firms say there are no policies for integrating records or protecting customer data compared to just 19% of those at the acquiring firm. Paper records are a serious concern, with 44% of newly acquired firms saying there is no process for integrating paper into new digital systems, and 31% saying the same for the storage of the paper archive.

The picture for company mergers is very different, with employees at both firms focused equally on addressing the main aspects of information management. Nearly three quarters (71%) of employees feel supported in record integration during a merger, and nearly two thirds (62%) feel the same about the protection of customer data.

Discussing the findings, Charlotte Marshall, Managing Director of Iron Mountain in the UK, Ireland and Norway said: “Information management is often an afterthought when companies merge. However, given the value of information and the desire of merging firms to rationalise cost structures, it should be a priority. Joining forces with or acquiring another organisation provides an opportunity for firms to re-evaluate their information management programmes and make the changes required to drive consistency, increase security and improve access to information.”

“Our study shows that the emotional impact of acquisitions can cause employees to lose focus on how information is managed. Information on paper is particularly vulnerable, with many firms having no effective storage or integration plans in place, thereby leaving potentially valuable data at increased risk of loss or exposure. Because employees can feel insecure and unsupported during times of change, communication is key. Consistent and clear instruction on how to deal with the information challenges ahead will help employees to understand how information should be managed going forward, where the key responsibilities lie, and what advantages new information management processes can bring.”