DATA INTEGRATION Defensibly reducing your data during Mergers, Acquisitions & Divestitures

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1 DATA INTEGRATION Defensibly reducing your data during Mergers, Acquisitions & Divestitures Ronke Ekwensi Thursday November 17, 2016 ARMA NJ Contact: Mobile:

My Background Ronke Ekwensi is seasoned executive with more than 25 years of experience with a multi-disciplinary background in information governance, data integration, data privacy and big data

2 My Background Ronke Ekwensi is seasoned executive with more than 25 years of experience with a multi-disciplinary background in information governance, data integration, data privacy and big data strategies. Her industry experience includes bio-pharmaceutical, power, technology, consumer electronics and management consulting. Ronke Ekwensi served as Vice President of Information Management & Policy for Baxalta, a specialty pharmaceutical company based in the US. Prior to Baxalta, Ronke Ekwensi was Managing Director in the Legal Management Consulting practice at Duff & Phelps, where she led the Information Governance and Data Integration service lines. She is a recognized expert in Information Management, Big Data & Social Data Strategies. She has served in various senior management positions at companies such as Pfizer, Ernst & Young, Public Service Electric & Gas, Sony Electronics & Hewlett Packard. She holds a Masters of Jurisprudence in Health Law from the Loyola University of Chicago School of Law, a Certification in Tackling the Challenges of Big Data from the Massachusetts Institute of Technology and an MBA in Global Management from University of Phoenix.

3 Deal Background q Commercial integration lead for $500M strategic alliance in Japan q Data integration lead for $3.6 billion acquisition q Data integration lead for $68 billion acquisition 2010 q Divestiture of consumer health business to separate entity q IT due diligence lead for potential acquisition in Jamaica q IT lead for 3-way collaboration for an electric & gas utility

4 Agenda q Why companies do deals q Data integration challenges q What is data integration q Benefits of data integration q Successful data integration q Questions

5 Audience Questions What is your function in your organization? RIM professional Vendor/Consultant IT Legal Compliance

6 Audience Questions Have you been part of a merger, acquisition or divestiture? Merger Acquisition Divestiture/Spinoff Do you have a defined set of processes for M&A/D Yes No

Why Companies Do Deals q Driving value through synergy: Increased product line & improved market share Harmonization of people Elimination of redundant /

7 Why Companies Do Deals q Driving value through synergy: Increased product line & improved market share Harmonization of people Elimination of redundant / unnecessary processes and facilities & technology Economies of scale Above the Line Revenue Realize Value Below the Line Costs Achieve Synergy

8 M&A Partners 2014 survey Integration is still rated the highest risk deal-phase.m&a Partners 71% - effectiveness level of overall integration, Very Poor, Poor or Average 68% - company overall M&A capability and readiness, Very Poor, Poor or Average 55% - company experienced value erosion, business disruption, unanticipated negative synergies in more than 25% of deals Comprehensive integration strategy framework One of top 3 breakthrough practices for: Revenue synergy capture Minimizing value erosion

9 Example - Data Integration Challenges q Records required to defend an IP enforcement litigation could not be located post acquisition. Production of documents 2 years into litigation called into question integrity of e-discovery process q Incompatible retention policies and systems delayed decommissioning of system - resulted in over retention and unplanned costs q IT came to Legal and asked Legal what to do with 80TB of data for divesting entity day before deal close resulted in over retention and increased risk q Large cache of backup media discovered in a closet - post close

10 What is Data Integration? The process by which organizations achieve synergies through the selective reduction of information; taking into account, legal and regulatory obligations while seeking opportunities to reduce total cost of information. It requires: q Careful assessments of risks q A partnership across organizational silos q Understanding of technology synergy targets q Focus on opportunities to reduce and harmonize Data Synergy 1

11 Why Data Integration? q Identify risks early q Evaluate maturity of target s IG (privacy, data security, ediscovery) q Ensure regulatory compliance q Determine opportunities for defensible disposition q Increase success with mitigation strategies q Greater cost certainty for the deal

12 The Data Integration Framework

Successful Data Integration Structure & Governance

many elements of the organization, but requires

Department IT HR/ Employment Law Compliance Procurement

13 Successful Data Integration Structure & Governance Successful data integration requires collaboration from many elements of the organization, but requires champions from the Legal & Finance department Legal Department IT HR/ Employment Law Compliance Procurement RIM Finance Outside Counsel Shifting from Reactive to Proactive and Enabling

Critical tools for Successful Data Integration Requires a structured disciplined

Integration Playbook q Data Integration diligence questionnaire Data Integration starts

Structure Negotiation/Close Phase 4 Integration/ Post Integration The sooner you get a

14 Critical tools for Successful Data Integration Requires a structured disciplined approach with clear strategic objectives: q Data Integration Value Drivers q Data Integration Playbook q Data Integration diligence questionnaire Data Integration starts here Phase 1 Strategy/Targeting Screening Phase 2 Valuation Due Diligence Phase 3 Deal Structure Negotiation/Close Phase 4 Integration/ Post Integration The sooner you get a seat at the table the higher the probability of achieving or exceeding the organization s synergy goals

15 Driving value through data integration q Rationalize data landscape q Reduce enterprise risk q Increase productivity q Enable future state model Identify and target data containers that enable enterprise value

16 Successful data integration Value Drivers Physical storage Reduce volume of physical storage Re-negotiate vendor contracts Information retention and disaster recovery policies Reduce duration of storage Reduce volume of information Legal Holds Closed, Dormant, Overlapping & Emerging Litigation Electronic Discovery Streamline processes Provider consolidation

17 Playbook a step-by-step approach Compile your wisdom into a Playbook qdescribes specific approaches required to achieve your goal Identifying Estimating Analysis Accountability Reporting/Communications Hand-offs Documentation Playbooks improve efficiency, drive consistency and accelerate the process

Successful Data Integration Sample Playbook 1 Strategic Objectives & RACI 1.1 Develop Vision & Strategy 1.2 Define Future State Operating Model 1.

3 Conduct Risk Assessment 2.4 Identify Opportunities 3 Unstructured Data 3.1 Conduct Inventory of repositories 3.2 Conduct aging analysis 3.

18 Successful Data Integration Sample Playbook 1 Strategic Objectives & RACI 1.1 Develop Vision & Strategy 1.2 Define Future State Operating Model 1.3 Develop Documentati on & KPI s 1.4 Create RACI 2 Electronic Communication 2.1 Identify types of EC 2.2 Define EC Future State 2.3 Conduct Risk Assessment 2.4 Identify Opportunities 3 Unstructured Data 3.1 Conduct Inventory of repositories 3.2 Conduct aging analysis 3.3 Preservation obligation analysis 3.4 Identify Opportunities 4 Legal Holds 4.1 Assess Current State 4.2 Identify Overlaps 4.3 Identify Opportunities to lift holds 4.4 Conduct Risk Assessment

Due Diligence Due Diligence a comprehensive appraisal of a business undertaken by a prospective buyer, especially to establish its assets and liabilities and evaluate its commercial potential q Data

19 Due Diligence Due Diligence a comprehensive appraisal of a business undertaken by a prospective buyer, especially to establish its assets and liabilities and evaluate its commercial potential q Data IS an asset and can also be a liability q Emphasize the role of RIM/IG in due diligence q Compile your questionnaire ahead of time q Engage key players in the enterprise M&A legal team Finance Integration execution teams IT

20 Due Diligence from a RIM perspective Due Diligence a comprehensive appraisal of the target s data landscape by a prospective buyer, especially to identify risks and opportunities and evaluate synergies

21 Successful Data Integration Due Diligence Begins with a well developed diligence questionnaire Perform an objective assessment of existing information landscape but includes other areas Legal & Compliance holds E-Discovery processes e.g. hosting environments Focus on short term delivery of information value drivers Day 0, Day 30, Day 60, Day 100 Identify elements that will impact financial synergies Quantify opportunities to reduce costs Identify integration projects to achieve synergies

22 Data Integration Case Study Acquisition of drug manufacturing company q q q q Data integration team commissioned as part of the due diligence process Data integration opportunities found in the following areas: People Harmonized e-discovery groups resulting in elimination of $1.5M in headcount costs Reduced records management group resulting in $2M savings Tape backups relocated backup tapes to cheaper storage q Identified opportunity to reduce litigation-related tape acquisition cost resulting in $15M savings and storage avoided costs of $1.5M q q q Risk-informed harmonization of s resulting in avoided storage costs of $20M Hard copy records Consolidated storage of paper records into company owned warehouse resulting in $2M savings Electronic Discovery - reduced discovery related hosting charges

23 Data Integration Diligence Questionnaire Sample areas Organizational/Governance Org charts (employees and contractors) Functional reporting relationship/councils Enterprise policies & schedules RIM Legal hold Privacy Disposition protocols Electronic Communications (EC) EC Platforms Types of EC EC policies EC practices Previous M&A activity Cloud Pre-2000 acquisitions, divestitures or collaborations Unstructured Data Policies Technology Containers Volume Retention policies Retention practices Tape Backups Storage Vendor Volume Policies Legal Holds & Electronic Discovery Litigation profile Preservation obligations Preservation processes Vendor/Outside Counsel

Global Records and Information Management Risk: Proactive and Practical Approaches to Effective Records Management. September 16, 2014

Global Records and Information Management Risk: Proactive and Practical Approaches to Effective Records Management September 16, 2014 Maura Dunn, MLS, CRM Lee Karas, MBA Agenda Drivers for your Records