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Data security at greater risk in acquisitions than mergers

Study finds increased likelihood of information loss or exposure 

16 April 2014

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By Manju Manglani, Editor (@ManjuManglani)

Information management is often an afterthought when organisations are acquired, research has found.

It showed that organisational data is at increased risk of loss or exposure because employees are more preoccupied with the impact of the acquisition upon their positions.

The picture is different when firms merge, however, with employees staying focused on integration and ensuring firm data remains well managed.

The survey covered 1,257 office workers in legal, financial, manufacturing and engineering, pharmaceutical and insurance firms in the UK, France, Germany, the Netherlands and Spain.

"Our study shows that the emotional impact of acquisitions can cause employees to lose focus on how information is managed," said Charlotte Marshall, UK, Ireland and Norway managing director of Iron Mountain, which commissioned the research.

"Because employees can feel insecure and unsupported during times of change, communication is key. Consistent and clear instructions 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."

According to the research, the top two information concerns of employees at acquired firms are: confusion around responsibilities for managing information (34 per cent) and the prospect of change to their information management systems (33 per cent).

A quarter of employees (27 per cent) at acquired firms said they worry about consolidating different sets of customer or organisational records, and less than one in five (17 per cent) worry about how to deal with data discrepancies, duplication and overlaps.

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

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 per cent) of employees feel supported in records integration during a merger, and nearly two thirds (62 per cent) feel the same about the protection of customer data.

However, one in three employees in acquired firms say there are no policies for integrating records or protecting customer data, compared to just 19 per cent of those at acquiring firms.

Paper records are a serious concern, with 44 per cent of respondents at newly-acquired firms saying there is no process for integrating paper into new digital systems and 31 per cent saying the same for the storage of paper archives.

"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," said Marshall.

"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."



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