Mergers and acquisitions (M&A) can come with considerable challenges. When companies lack a common understanding of their maintenance, repair and operations (MRO) master data, it can be difficult to combine systems following a merger or acquisition. Unsuccessful M&A deals are often a result of an inability to catalog and share data effectively.
Sound master data management and governance are imperative to a successful merger or acquisition. High-quality data is an essential asset that drives substantial business value. Best-in-class data management is key to ensuring safety, increasing productivity and reducing costs in the long term.
The Appeal of M&A Deals and the Potential for Failure
M&A deals provide cost savings and greater efficiencies through economies of scale, along with a variety of other business benefits. Companies pursue them for many reasons, but the “why” is not the only factor that matters.
The “how” can sometimes be overlooked and result in unanticipated expenses or ultimate failure. During the transition process, companies must manage and standardize data coming from the acquired company’s disparate enterprise resource planning (ERP) systems, which, if managed poorly, can jeopardize the merger’s success. Managing these disparate systems can result in higher costs and increased error potential. With the right tools, companies can streamline and improve this process.
Why MRO Master Data Is Important Following M&A Activity
Companies don’t always consider the purchasing overlap of common suppliers after a merger or acquisition takes place. MRO master data management is invaluable to spares-reliant businesses following an M&A deal. An example of this is the oil and gas industry, where MRO inventory is essential in maintaining productivity and reducing downtime to improve process safety, reliability and resiliency.
This study on Improved MRO Inventory Management Systems in Oil & Gas outlines how important managing spare parts is, noting, “In the oil and gas industry, production is highly dependent on the availability of a productive machine.” Holding spare drilling and production parts for maintenance demands immense capital investment and can be very difficult to manage from an inventory standpoint.
Siloed and uncategorized data creates data gaps and makes managing inventory difficult. A single version of the truth for MRO master data is essential, as well as an agreed data standard or governance process for creating and managing this data.
An MRO master data solution enables companies to assess materials and spending accurately and reduce duplicate sourcing and excessive inventory of MRO parts. It can also break down these silos and group data in a consistent and organized way to better understand inventory and spare parts.
The Benefits of an MRO Master Data Solution After the Deal Is Sealed
The return on investment (ROI) of an MRO master data solution can be measured, in part, in the reduction in critical spares stockouts and extended downtime. With the help of an MRO master data solution, organizations can eliminate the need to store large quantities of costly materials, optimize their inventory levels and reduce the time needed to find critical information, to help keep their assets safe and productive.
Some of the specific benefits of an MRO master data solution include:
- Cost savings: With an MRO master data solution, companies can avoid the financial pitfalls commonly associated with purchasing overlap and spare parts inventory.
- Time savings: An MRO master data solution can streamline the process of integrating data systems and correcting for operational process overlap. An MRO master data solution also enables employees to spend less time locating spare parts and more time on mission-critical tasks.
- Improved decision-making and operational performance: While a merger or acquisition may come with challenges, the increased understanding that comes from combining ERPs and data management systems is beneficial in the long run. With high-quality data, companies can make more informed and profitable decisions.
Sustaining Data as a Long-Term Asset
Getting the data clean is one thing. Keeping it clean is another. Sustaining data quality is vital to reaping the benefits traditionally associated with M&A work. However, there are unique benefits and challenges that come with maintaining that data. If data is not maintained properly in the long term, it can result in the data needing to be “re-cleaned,” which can be a costly and time-consuming process. And dirty data results in substantial business costs.
Companies can offset future data cleansing costs by using an MRO master data management solution. Sustaining data as an asset allows for greater visibility into MRO master data across locations and helps companies avoid stockout events and manage inventory more effectively. It also helps companies avoid business process execution failures caused by bad data, which leads to additional cost savings.
Establishing a Consistent Approach to Sound MRO Master Data
An MRO master data solution enables smoother and more profitable M&A deals. Through sound MRO master data management, companies can more accurately assess materials, vendors, products and spending, leading to increased productivity, profitability, safety and regulatory compliance.
To learn more about how an MRO master data solution can help your company sustain data as a long-term asset, visit our MRO software landing page.