ﰀ Keys to Successful M&A Activity ﰀ Understanding Enterprise Data Management ﰀ Managing Data Growth ﰀMaximizing DevelopmentEfficiencies ﰀ Protecting Data Privacy

1. Mergers & Acquisitions:
Data Management Strategies That Support Business Growth
Information Management
Rick Buglio Dave Chiou
TPM, IBM Information Management Client Technical Professional
© 2011 IBM Corporation

2. Information Management
Agenda
Keys to Successful M&A Activity
Understanding Enterprise Data Management
Managing Data Growth
Maximizing Development Efficiencies
Protecting Data Privacy
2 © 2011 IBM Corporation

3. Information Management
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 © 2011 IBM Corporation

4. Information Management
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 © 2011 IBM Corporation

5. Information Management
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 © 2011 IBM Corporation

6. Information Management
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 © 2011 IBM Corporation

7. Information Management
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 © 2011 IBM Corporation

8. Information Management
Don’t Forget About the Data
8 © 2011 IBM Corporation

9. Information Management
Data Issues to be Aware of during M&A
Application Decommissioning
Data Growth
Data Retention
Data Privacy
Application Development
9 © 2011 IBM Corporation

10. Information Management
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 © 2011 IBM Corporation

11. Information Management
Lawyers ... Ya Gotta Love ’em
Legal Costs of E-Discovery
Identify Appropriate Data $200/hour
Preserve the Data $100-$300/hour
Collect the Data $200-$300/hour
Review the Data $120-$350/hour
Produce the Data $1000-$2100/hour
Debra Logan, “Mapping Technology and Vendors to the Electronic Discovery Reference Model,” GartnerResearch, ID Number:
G00153110, November 9,2007.
11 © 2011 IBM Corporation

12. Information Management
Application Decommissioning the Data
Reports
Archive
Retire Archived Data
Decommissioned Files
Data
Universal Access to Application Data
ODBC / JDBC Excel XML E-Discovery
12 © 2011 IBM Corporation

13. Information Management
Have a Storage Plan for the Entire Lifecycle of Data
Current Active Online Offline
Data Historical Archive Archive
1-2 years 3-4 years 5-6 years 7+ years
Non DBMS Offline
Retention Platform Retention Platform
Production Archive
Database Database ATA File Server CD
EMC Centera Tape
IBM RS550 Optical
HDS
Compressed Compressed Compressed
Archives Archives Archives
© 2011 IBM Corporation

14. Information Management
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 © 2011 IBM Corporation

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 Today, the average car has 100 Every week, the average
more than 988 Exabytes – the million lines of code. The information worker spends
equivalent to a stack of books from Airbus A380 alone contains 9.6 hours searching for
the sun to Pluto & back over 1 billion lines of code. information
15 © 2011 IBM Corporation

16. Information Management
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 © 2011 IBM Corporation

17. Information Management
How are organizations responding to data growth?
Use database
Performance
partitioning
Use database
Database Size
vendor
compression
Buy more Storage
& CPU hardware
Hardware Capacity
17 © 2011 IBM Corporation

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 © 2011 IBM Corporation

19. Information Management
How does archiving work?
Production Data
Archives
Archive
Reference Data
Inactive/Historical
Data Retrieve Historical Data
Can selectively
Active Data restore archived
data records
Universal Access to Application Data
ODBC/JDBC Application E-Discovery Data Find XML Report Writer
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.
19 © 2011 IBM Corporation

20. Information Management
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 © 2011 IBM Corporation

21. Information Management
Archive a complete business object and retain integrity
Production Databases Archive Files
Customer Customer
Number Name
8675309 John Smith
5025202 Jane Jones
Customer Customer Customer Order
Order Product Number Name Number Amount
Number
CRM / Oracle Unix 50505 Product A
306959 Product B
Archive Order
Number
Product
Customer
Number
Order
Amount Order Entry POS /
8675309 $1,056
DB2 for z/OS
5025202 $5,690
Account Receivable
/ DB2 Linux
21 © 2011 IBM Corporation

22. Information Management
Comparing access methods for archive data
Mashup Center XML Application
• Reporting • Industry standards • Native look and feel
• Known requests • Messaging services • Existing skills used
• Requirement for executives • Customizations • Support vendor ERP solutions
Ensure access & restore capabilities based on
functional user and business process requirements.
ODBC/JDBC Data Find
• SQL • Ad hoc requests
• Custom application access • Web based for anytime,
22 • DBA and developer access anywhere access © 2011 IBM Corporation

23. Information Management
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 © 2011 IBM Corporation

24. Information Management
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 Vendor Market Share by
2010 Revenue Total Number of Customers
Source: Gartner, Inc., “Market Trends: World, Database Archiving Market Continues Rapid Growth, 2011”, S. Childs & A Dayley, September 2011
24 © 2011 IBM Corporation

25. Information Management
Data Multiplier Effect
Actual Data Burden = Size of production database + all replicated clones
200 GB Production 200 GB Test
Total 200 GB Development
1200 GB 200 GB Backup
200 GB Disaster 200 GB Quality
Recovery Control
25 © 2011 IBM Corporation

26. Information Management
Current Approaches
Clone Production
Request for Copy
Wait
After
Production Production
Database Database
Copy Copy
Changes
Manual examination:
Right data?
What Changed?
Correct results?
Unintended Result?
Someone else modify?
26 © 2011 IBM Corporation

27. Information Management
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 10 –
100 time greater than those caught in the development environment
Data Privacy/Compliance
– Data breaches can put you out of business
27 © 2011 IBM Corporation

28. Information Management
Employ effective test data management practices
Production or Production Clone
Relational subset
Extract
Gold
Master
2TB
25 GB
• Create targeted, right-sized test
environments 25 GB Development
• Substitute sensitive data with
Unit Test
fictionalized yet contextually accurate
data
• Easily refresh, reset and maintain test
environments 50 GB
100 GB
• Compare data to pinpoint and resolve
Training
application defects faster Integration
• Accelerate release schedules Test
© 2011 IBM Corporation

29. Information Management
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
Legacy
Oracle ERP CRM
29 © 2011 IBM Corporation

30. Information Management
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, 2008
30 © 2011 IBM Corporation

31. Information Management
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 © 2011 IBM Corporation

32. Information Management
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. 6.3.4 states,
“Production data (real credit card numbers) cannot be used
for testing or development”
* The Solution is Data De-Identification *
32 © 2011 IBM Corporation

33. Information Management
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 © 2011 IBM Corporation

34. Information Management
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 © 2011 IBM Corporation

35. Information Management
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 © 2011 IBM Corporation

36. Information Management
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
© 2011 IBM Corporation

37. Information Management
37 © 2011 IBM Corporation