Mergers & Acquisitions:

Transcription

1 Mergers & Acquisitions: Data Management Strategies That Support Business Growth Information Management Rick Buglio TPM, IBM Information Management Dave Chiou Client Technical Professional

2 Agenda Keys to Successful M&A Activity Understanding Enterprise Data Management Managing Data Growth Maximizing Development Efficiencies Protecting Data Privacy 2

3 Mergers and Acquisitions: What does it mean to you? A) A time to celebrate B) A time to jump ship C) A time to prepare for one of the biggest challenges of your life D) A chance for you and your organization to evolve 3

4 IT Integration Approaches to Promote Successful M&A Activities 1. Co-existence Distinct product lines and customer needs Operations will continue to run independently Limited opportunities for IT migration Low-cost integration 2. Absorption Two companies in the same industry align to eliminate competition and reduce costs Most opportunity for IT integration Significant savings can be achieved by consolidating applications, etc. Which systems to choose? 3. Best of Breed Usually small companies aligning to increase market share Longer integrations/timelines/complexity issues Choose the best systems to support the new organization Can be costly 4. Transformation Two small companies in the same industry or supplier/customer Companies come together to form new joint technologies Opportunities to retire older apps from both companies Timelines are long; can be risky and expensive Opportunity can lead to big rewards, new technologies, etc. Source: Forrester Research, The Impact of M&As on IT, 3/31/05, Julie Giera 4

5 Why is Early IT Involvement Essential? Successful IT integration can truly make a Merger/Acquisition succeed But, IT is often left out of the initial stages of M&A activity!! IT can bring operational efficiencies not even considered! A recent CIO Insight article revealed, From our vantage point, viewing numerous integrations across industries, it is clear that senior management still tends to approach IT integration in a perfunctory, arms-length manner. This both tempts fate and misses out on the very real benefits a well-planned and effectively executed IT integration plan can bring. 5

6 Failures Caused by Lack of IT Involvement 1) IT does not provide accurate estimates of time required to achieve IT synergies 2) IT does no provide an accurate estimate of costs But Success is important! $2 of every $5 of merger synergy comes from IT 6

7 IT Strategies for M&A Success CIOs need to make clear decisions about three important synergies: 1) Applications 2) Infrastructure Technology 3) Business Processes Examples: Consolidate data centers Rationalize vendor contracts Renegotiate vendor licenses for a larger base Customer Service Centers Security Development 7

8 Information Management Don t Forget About the Data 8

9 Data Issues to be Aware of during M&A Application Decommissioning Data Growth Data Retention Data Privacy Application Development 9

10 How Can I Remove Older applications? Application Decommissioning Definition: Remove a system from active service but retain access to its business-critical data Retire an application Consolidate redundant systems into a single enterprise standard Migrate portfolio to lower-cost platform Consolidate and eliminate unsupported databases and versions Benefits Reduce IT infrastructure costs (hdw, sfw, labor costs) Reduce infrastructure complexity (eliminate confusion) Reclaim assets 10

11 Lawyers... Ya Gotta Love em Legal Costs of E-Discovery Identify Appropriate Data Preserve the Data Collect the Data Review the Data Produce the Data $200/hour $100-$300/hour $200-$300/hour $120-$350/hour $1000-$2100/hour Debra Logan, Mapping Technology and Vendors to the Electronic Discovery Reference Model, GartnerResearch, ID Number: G , November 9,

12 Application Decommissioning the Data Reports Decommissioned Data Retire Archived Data Archive Files Universal Access to Application Data ODBC / JDBC XML E-Discovery Excel 12

13 Have a Storage Plan for the Entire Lifecycle of Data Current Data Active Historical Online Archive Offline Archive 1-2 years 3-4 years 5-6 years 7+ years Production Database Archive Database Non DBMS Retention Platform ATA File Server EMC Centera IBM RS550 HDS Offline Retention Platform CD Tape Optical Compressed Archives Compressed Archives Compressed Archives

14 Application Decommissioning Benefits Reduce Business Risk: Reduce risk and cost by retiring obsolete or redundant technologies. Reduce reliance on aging technologies, unsupported versions, scarce technical skills and diminishing know-how by retiring obsolete applications. Minimize Compliance Risks: Enable application-independent access to historical business data for retention compliance Preserve business records in audit-ready, immutable, point in time format; produce on demand Reduce IT expenses: Reduce hardware, software, (Application, Data Base and OS), software maintenance, human resource and infrastructure expenses. Reclaiming IT assets and resources for other business purposes. Infrastructure Today Infrastructure after Sunset 14

15 Information Management The Digital Data Explosion The volume and variety of digital information is exploding as our Planet becomes more instrumented, interconnected and intelligent This year, the amount of digital information is expected to grow to more than 988 Exabytes the equivalent to a stack of books from the sun to Pluto & back 15 Today, the average car has 100 million lines of code. The Airbus A380 alone contains over 1 billion lines of code. Every week, the average information worker spends 9.6 hours searching for information

16 Challenges of exponential data growth Missed SLAs and declining customer satisfaction due to eroding or unpredictable application performance Transaction & data volume growth drive up infrastructure costs Multiple instances of production data back-up, training, testing can compound data growth Archival processes are complex requiring full business context for e-discovery Are you controlling your data, or is it controlling you? 16

17 How are organizations responding to data growth? Performance Database Size Use database partitioning Use database vendor compression Buy more Storage & CPU hardware Hardware Capacity 17

18 Information Management Customers Are Asking Archiving Questions What data should I be saving, for how long and for what reasons? What data should I be deleting? How am I going to find the data when I need it? What do I do with the data when I no longer need it? What is the most appropriate solution to meet my archiving needs? What is the cost/benefit analysis to support an archiving solution acquisition? 18

19 How does archiving work? Production Inactive/Historical Data Active Data Archive Retrieve Can selectively restore archived data records Data Archives Reference Data Historical Data Universal Access to Application Data ODBC/JDBC Application E-Discovery Data Find XML Report Writer 19 Data Archiving is an intelligent process for moving inactive or infrequently accessed data that still has value, while providing the ability to search and retrieve the data.

20 Complete Business Object Order Represents application data record orders, invoices, customer Referentially-intact subset of data across related tables and applications; includes metadata Provides historical reference snapshot of business activity 20

21 Archive a complete business object and retain integrity Production Databases Archive Files Customer Number Customer Name John Smith Jane Jones CRM / Oracle Unix Order Number Product Product A Customer Number Customer Name Customer Number Order Amount Product B Customer Number Order Amount $1,056 Order Entry POS / DB2 for z/os Archive Order Number Product $5,690 Account Receivable / DB2 Linux 21

22 Comparing access methods for archive data Mashup Center XML Application Reporting Known requests Requirement for executives Industry standards Messaging services Customizations Ensure access & restore capabilities based on functional user and business process requirements. Native look and feel Existing skills used Support vendor ERP solutions ODBC/JDBC Data Find 22 SQL Custom application access DBA and developer access Ad hoc requests Web based for anytime, anywhere access

23 Benefits of data growth management Reduce/Control Costs: Storage costs production level data is typically one of the most expensive storage platforms Administrative costs software license fees, hardware costs & the labor to manage data growth Upgrades/Migrations reduce the downtime during the data conversion Application consolidation/retirement move the data needed while maintaining access to the original data in its business-object form without the original application Improve Application Performance: Improved availability no downtime caused by batch process overruns; meet SLAs Improved/faster backup and recovery bring up important/recent data first, bring up older/reference data as conditions permit 23

24 Gartner Key Findings We believe the market for database archiving and application retirement is vibrant and dynamic, and will see continued solid growth over the next five years Organizations are looking to database archiving vendors that offer packaged and custom application support in order to control storage growth, improve application performance, and support compliance, audit and e-discovery activities Vendor Market Share by 2010 Revenue Vendor Market Share by Total Number of Customers Source: Gartner, Inc., Market Trends: World, Database Archiving Market Continues Rapid Growth, 2011, S. Childs & A Dayley, September

25 Data Multiplier Effect Actual Data Burden = Size of production database + all replicated clones 200 GB Production 200 GB Test 1200 GB Total 200 GB Backup 200 GB Development 200 GB Disaster Recovery 200 GB Quality Control 25

26 Current Approaches #1 - Clone Production #2 - Write SQL Clone Production Request for Copy Wait Write SQL Extract Complex Subject to Change After Production Database Copy Manual examination: Right data? What Changed? Correct results? Unintended Result? Someone else modify? Changes Production Database Copy Extract RI Accuracy? Right Data? Share test database with everyone else Changes After Expensive, Dedicated Staff, Ongoing Responsibility. 26

27 Test Data Management: Current Challenges Infrastructure Costs higher HW storage costs Development Labor higher costs Defects Can be expensive Cost to resolve defects in the production environment can be time greater than those caught in the development environment Data Privacy/Compliance Data breaches can put you out of business 27

28 Employ effective test data management practices Production or Production Clone 2TB Extract Relational subset Gold Master Create targeted, right-sized test environments Substitute sensitive data with fictionalized yet contextually accurate data Easily refresh, reset and maintain test environments Compare data to pinpoint and resolve application defects faster Accelerate release schedules 25 GB Unit Test 100 GB Integration Test 25 GB Development 50 GB Training

29 Subset: Key Capabilities Precise subsets to build realistic, right-sized test databases Application Aware Flexible criteria for determining record sets Business Logic Driven Complete Business Object: Referentially intact subsets Across heterogeneous environments Oracle ERP Legacy CRM 29

30 The Latest on Data Privacy 2008 statistics $202 Cost to companies per compromised record $6.7 Million Average cost per data breach incident 40% % of breaches where the responsibility was with Outsourcers, contractors, consultants and business partners 253+ Million TOTAL number of records containing sensitive personal information involved in security breaches in the U.S. since 2005 * Sources : Ponemon Institute, Privacy Rights Clearinghouse,

31 The Latest Research on Test Data Usage Overall application testing/development 62% of companies surveyed use actual customer data instead of disguised data to test applications during the development process 50% of respondents have no way of knowing if the data used in testing had been compromised. Outsourcing 52% of respondents outsourced application testing 49% shared live data!!! Responsibility 26% of respondents said they did not know who was responsible for securing test data Source: The Ponemon Institute. The Insecurity of Test Data: The Unseen Crisis 31

32 The Easiest Way to Expose Private Data Internally within the Test Environment 70% of data breaches occur internally (Gartner) Test environments use personally identifiable data Standard Non-Disclosure Agreements may not deter a disgruntled employee What about test data stored on laptops? What about test data sent to outsourced/overseas consultants? How about Healthcare/Marketing Analysis of data? Payment Card Data Security Industry Reg states, Production data (real credit card numbers) cannot be used for testing or development * The Solution is Data De-Identification * 32

33 A Victim of Their Own Success Supply and Demand Model The sheer amount of stolen information being sold in the cyber-underground has pushed down prices Prices for Stolen Credit Cards on the web are down to $2/US Visa Card Prices for Credit Card Numbers/Bank Account Numbers with PINs down to $10- $20 (2008) from $500 (2006) source: Eweek 8/20/09 Brian Prince 33

34 What is Done to Protect Data Today? Production Lockdown Physical entry access controls Network, application and database-level security Multi-factor authentication schemes (tokens, biometrics) Unique challenges in Development and Test Replication of production safeguards not sufficient Need realistic data to test accurately 34

35 What is Data De-Identification? AKA data masking, depersonalization, desensitization, obfuscation or data scrubbing Technology that helps conceal real data Scrambles data to create new, legible data Retains the data's properties, such as its width, type and format Common data masking algorithms include random, substring, concatenation, date aging Used in Non-Production environments as a Best Practice to protect sensitive data 35

36 Data Management Yields Stronger Business Outcomes Optimize Performance Improve application performance by segregating historical transaction records to a safe, secure archive Achieve Service Level Agreements (SLAs) consistently Accelerate delivery of revenue-generating applications Mitigate Risk Manage and access archived data; enable prompt, accurate responses to audit or e-discovery requests Protect data privacy and safeguard shareholder loyalty Control Costs Reduce infrastructure costs; enable cheaper tiered storage Minimize cost of compliance; reduce opportunity for fines & penalties Isolate application errors early in the lifecycle, where they are cheapest to fix 36

37 37