Best Record Management Practices to Follow During Mergers & Acquisitions

Mergers and acquisitions are not merely collaborations at the agreement level between two or more companies, but a complete operation whereby all the organizations involved merge their business essentials, workforce and information assets.
As the workforces of the merging or acquired companies join hands, the records and data of these organizations demands to be handled with utmost care. Mergers, acquisitions and even collaborations are usually met with a lot of transitions at infrastructural, administrative and process levels. Preserving the records and organizational data amidst ‘chaos,’ hence, becomes crucial.

In this post, we will discuss some of the best Record Management Practices that an organization can follow during mergers and acquisitions.

1. Derive a Strategy & Formulate a Plan

This step is the key to a successful merger or acquisition between two or more companies. The importance of having a sound record and data management plan cannot be further emphasized. Usually, different companies follow a different approach when it comes to RIM (Records and Information Management). This includes not just the records storage and curation, but also the processes used to document them, the authorization access, etc. In the pre-merger or pre-acquisition meeting, the teams ought to decide on the RIM strategy, conduct the SWOT analysis, formulate risk mitigation plan and devise a detailed & scheduled transfer/transition of the records and data.

2. Utilize a Functional Classification System

A Functional classification system in place is another practice that comes highly recommended for the organizations. As stated before, different organizations have different Record Management Systems. With this wide gap come different record and document classification systems which can pose serious threats to a new merger or acquisition because of their non-standard nature. Take for example, a record of a company’s assets. If that company decides to sell off its asset(s), then it must be able to produce all the relevant documents associated with it. This includes but is not limited to purchase order, depreciation record, legal documents, etc. If the relevant record is labeled incorrectly or in non-standard format, then there are chances of its misplacement. This can negatively affect the sale of the asset and even induce post-sales litigation risks.

A functional classification system introduces a common format for documenting, curating, and labeling the records which allow for clear identification of information. A functional record classification system works well with both the physical and digital records.

3. Divest Your Records

Before the merger or the acquisition, a company’s records might have been open to all and no clear authorization access might have been defined. Though, this becomes a risky proposition after the organization’s workforce and infrastructure gets merged. It is essential that the organizations identify the sensitive records and divest them as per the hierarchy of personnel. Moreover, your company might need to formulate a new retention schedule to archive the new set of records and shred the older ones whose theft/loss/misplacement might create trouble.

4. Educate Employees & Assign Clear Roles

Once a merger takes place, the ‘new’ organization will have a different set of business goals and philosophy with which the employees need to be aligned. Thus, before the new Record Management Processes and Policy come into play, the new employee coalition must be educated about the same. They must be assigned clear roles when it comes to handling the sensitive documents as per the new divestment policy. If possible, they must be briefed about the risks involved when the records get compromised, and the best course of action they can take.

5. Hire Consulting Experts

During an M&A operation, it is easy for the management to get distracted by tons of pending tasks. Overlooking the existing Record Management System becomes a fairly high possibility and the chance of misplacement/theft of the records (or data) grows. This is the point where professional Record Management Firms or a consulting expert will come in handy. Not only will they advise your management regarding the best RIM practices, but also assist in a smooth Merger/Acquisition transition.

Follow the above-mentioned best practices for a seamless RIM transition during an M&A operation. Let us know your thoughts regarding the same in the comments below!

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