What to Do When Your Enterprise CMS Vendor is Acquired

By Tom Wayman (@laserfiche) Sep 12, 2011

M&A is a lot like divorce: We all know it happens, but we never think it’ll happen to us. But when just about every software company out there has ties to venture capitalists or private equity firms — or is a public company like Autonomy, which recently received a $10B+ bid from HP in an open market transaction — organizations need to seriously consider the possibility of M&A when they’re selecting their ECM systems.

Before You Purchase

Although it’s impossible to completely bulletproof your ECM purchase against changes in vendor ownership, if you select a closed system that demands extensive domain expertise from programmers, analysts and consultants, you are much more likely to be subject to “vendor lock-in.” This is particularly problematic in the face of M&A, when you’re forced to wrangle with such questions as:

Will the product be discontinued, leaving us on a system that quickly becomes outdated?
Will the product survive, but only with minimum attention from the new owner?
Will service levels suffer?
Will the acquiring company honor the terms specified in my existing contract?
Will the new vendor try to force my organization onto a new platform?

To decrease the likelihood that you’ll be “held hostage” by a new owner in the event of an acquisition, there are two issues to consider: data and expertise.

Open vs. Closed File Formats

Information governance rules have changed over time and will continue to evolve. For example, twenty years ago, no one would have imagined that Microsoft Word would have long ago displaced Word Perfect as the ascendant word processing format. Choosing a file format controlled by a single vendor runs contrary to the principles of long-term preservation and archival because there is no guarantee that the format will be supported in the years to come.

The TIFF file format is proven and accepted as the preferred digital archival format around the world because it is an open standard. There are a variety of freely available TIFF viewers available and every computer can natively view TIFF files. Scanning documents as TIFF images and extracting their contents as ASCII text is the only way to maintain “eye readability” in a digital format. In addition, there is a large development community creating tools for open standards such as TIFF, spurring innovation.

Choosing an ECM solution that uses an open file format such as TIFF ensures that system performance is continuously enhanced by advances in hardware, software and communication technologies. Selecting a closed format hampers your organization’s ability to respond quickly in the face of M&A by migrating its data from one ECM system to another.

In-House vs. Outside Expertise

The strong demand for ECM systems has created a bottleneck of available talent, driving up prices and limiting the availability of ECM programmers, analysts and consultants. In order to put scarce resources to best use, it’s important to focus outside ECM expertise on core planning and architecture guidance rather than configuration, administration and deployment.

Seek out ECM tools that support administrative tiers facilitating the delegation of responsibilities and configuration. To determine the amount of training needed to configure and administer the system, check administrative consoles, preview documentation and browse support resources and community forums. To streamline deployment, train appropriate personnel within your organization to deploy and configure the majority of your system.

This approach of training trustees and local administrators is a cost-effective way to increase your organization’s ability to adapt as changes occur both within your own organization and in the ECM landscape.

After You Purchase

Once you’ve invested in an ECM system, the fact that your vendor has been acquired is not usually welcome news. Although there are times when an acquisition benefits customers (via increased R&D, for example, or more comprehensive support), it can take a year or more before it becomes clear whether the deal is going to have positive or negative ramifications for the acquired company’s customer base.