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Merger & Acquisition

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Mergers & Acquisitions (M&A), Joint ventures (JVs), and Divestitures often entail the use of shared systems where data segregation is crucial. These systems contain sensitive information that underpin competitive strategies, critical initiatives, and compliance measures. Inadequate handling or merging of this data can lead to breaches of partnership agreements, loss of IP, leakage of confidential information, and regulatory non-compliance. Effective data segregation is not just a technical necessity, but a strategic imperative to safeguard business integrity. 

Safeguarding Data in Joint Ventures, Mergers & Acquisitions, Divestitures, and Sanctions

Explore the challenges faced by joint ventures, mergers and acquisitions, divestitures, and companies under sanctions when it comes to safeguarding data during structural changes

Audit and Compliance

Mitigate risk and simplify compliance with comprehensive visibility into the location, use and distribution of material, nonpublic private, and PII

NextLabs Rights Protection Tool

Discover how companies ensure secure, compliant data access by classifying and encrypting data, enabling the definition of policies based on data classifications

Challenges

Data Sharing

Enterprises are required to share data to maintain competitiveness, yet they must also uphold data privacy. This balancing act is essential to reduce the time and costs involved in establishing and maintaining disparate systems.

Data Segregation

During divestitures, it is crucial to maintain a separation of data and employees between the spinoff and the parent company. This segregation ensures regulatory compliance and operational clarity during the transition.

IT Change Gap

Data of the acquired company needto be integrated into the parent company’s systemsbut the process creates an IT change gapMisaligned security protocols and infrastructures can increase attack surface and cybersecurity risk.

Outsourcing and Offshoring

Some A&D companies are hesitant to leverage outsourcing or offshoring due to the lack of technology to address concerns about inconsistent or inadequate global data protection regulations, leading to higher costs and reduced competitiveness. However, to stay competitive in the global market, there is a growing interest in outsourcing and offshoring to improve efficiency and lower costs. Sharing proprietary information with external entities increases the risk of unauthorized access or disclosure, highlighting the need for a data-centric security approach to protect data regardless of its location. 

Approach to Overcome Challenges

To overcome the challenges surrounding data sharing, data segregation, and integrating data acquisitions during joint ventures, M&A, and divestitures, organizations need to implement data segregation controls and strict access controls to prevent unauthorized access. A proactive approach to data security must contain the following elements: 

Robust Data-Security Policies

Robust data security policies can effectively navigate the intricacies of data sharing, segregation, and integration within JVs, mergers and acquisitions. Policies facilitate the secure exchange of information on a need-to-know basis and ensure clear delineation between parent and spinoff entities.

Data-Centric Security

A data-centric security approach ensures that data is persistently protected throughout its lifecycle, from creation to disposal. With data-centric security controls such as data encryption, access controls, and data classification, enterprises can ensure data security throughout all stages of the JV, merger and acquisition processes.

Continuous Monitoring & Response

On top of preventative measures, continuous monitoring is crucial for detecting and responding to security incidents, especially during the IT transformation in M&As. Enterprises must have real-time visibility into their data access activity to identify and respond to potential threats.  

Compliance Auditing

Compliance audits should cover data security policies, data access controls, data handling procedures, and employee training. By regularly auditing their data security practices, organizations can identify and address vulnerabilities in their security controls.

NextLabs Solution

CloudAz Centralized Policy Platform

CloudAz applies the zero trust principles to secure access and protect data across silos using attribute-based policies. CloudAz secures resources by eliminating implicit trust and verifying every stage of a digital interaction. This reduces the risk of cyber-attacks and external adversaries in this sector where national security and proprietary technologies are of prime importance.   

SkyDRM Digital Rights Management

Many A&D sensitive technologies and designs are stored in PLM or CAD applications, underscoring the need to protect data in PLM and CAD. SkyDRM enables seamless global sharing of valuable intellectual property from PLM applications, such as Siemens Teamcenter and Bentley ProjectWise, with real-time access and usage controls. Furthermore, it can protect the rights of CAD files, such as AutoCAD and PTC Creo, ensuring organizations share critical information securely with third parties, including offshore, outsourced, and supply chain partners. 

Data Access Enforcer (DAE) Data-Level Security Controls

DAE enforces “need-to-know” data access at runtime using fine-grained attribute-based policies. DAE provides dynamic data masking and segregation capabilities compatible with cross-domain policies. By dynamically segregating data based on policies, data can only be viewed by authorized users with permitted access. The content can also be modified according to attribute-based policies with data masking, and with format preserving encryption (FPE) capabilities, confidential information such as export controlled data can be protected even if shared with unauthorized users.  

Application Enforcer

In the A&D industry, valuable information is often shared internally or externally with vendors and contractors via various applications such as SharePoint and SAP. NextLabs’ Application Enforcer for SharePoint automates information controls by identifying, classifying, and persistently protecting data uploaded to SharePoint, even after it leaves the application. This supports a collaborative culture and governance process that enables secure sharing of information with external parties. NextLabs’ Application Enforcer for SAP ERP enforces real-time segregation of duties policies to prevent single individuals from controlling all process phases or transactions, safeguarding sensitive SAP data and meeting compliance needs.  

CloudAz Report Server

CloudAz simplifies audit processes with centralized logging and reporting of all data access activity and authorization decisions. Reports also notify project managers and team members whenever a user tries to export classified data outside of the export-regulated project collaboration locations. Centralized visibility enables organizations to prevent non-compliance activities and maintain comprehensive reporting for audit and compliance purposes. 

Challenges

Data Sharing

Enterprises are required to share data to maintain competitiveness, yet they must also uphold data privacy. This balancing act is essential to reduce the time and costs involved in establishing and maintaining disparate systems.

Risk in Construction JVs

Due to their monetary value, JVs in the construction sector hold high data security risks, which has led the UK government to publish a guide to data security for JVs on infrastructure projects. 

Data Segregation

During divestitures, it is crucial to maintain a separation of data and employees between the spinoff and the parent company. This segregation ensures regulatory compliance and operational clarity during the transition.

Anticompetitive Practices

Failure to segregate data that is competitive in nature can result in collusion and anticompetitive behavior, antitrust lawsuits, and noncompliance.

IT Change Gap

Data of the acquired company needs to be integrated into the parent company’s systems, but the process creates an IT change gap. Misaligned security protocols and infrastructures can increase attack surface and cybersecurity risk.

Data Breach Statistics in M&As

IBM reported that one in three executives surveyed has experienced data breaches that can be attributed to M&A activity during integration.

Approach to Overcome Challenges

To overcome the challenges surrounding data sharing, data segregation, and integrating data acquisitions during joint ventures, M&A, and divestitures, organizations need to implement data segregation controls and strict access controls to prevent unauthorized access. A proactive approach to data security must contain the following elements: 

Robust Data-Security Policies

Robust data security policies can effectively navigate the intricacies of data sharing, segregation, and integration within JVs, mergers and acquisitions. Policies facilitate the secure exchange of information on a need-to-know basis and ensure clear delineation between parent and spinoff entities.

Data-Centric Security

A data-centric security approach ensures that data is persistently protected throughout its lifecycle, from creation to disposal. With data-centric security controls such as data encryption, access controls, and data classification, enterprises can ensure data security throughout all stages of the JV, merger and acquisition processes.

Continuous Monitoring & Response

On top of preventative measures, continuous monitoring is crucial for detecting and responding to security incidents, especially during the IT transformation in M&As. Enterprises must have real-time visibility into their data access activity to identify and respond to potential threats.  

Compliance Auditing

Compliance audits should cover data security policies, data access controls, data handling procedures, and employee training. By regularly auditing their data security practices, organizations can identify and address vulnerabilities in their security controls.

Automation & Prevention

By automating the enforcement of data security policies, enterprises can prevent breaches before they happen, lowering compliance costs and data security risks.

NextLabs Solution

Robust Data-Security Policies

NextLabs’ unified policy management platform, Cloud Az, enables companies to create, implement, and enforce comprehensive data security policies. CloudAz allows companies to define Attribute Based Access Control (ABAC) security policies that are evaluated and enforced dynamically at that time of the access request. The policies can apply the regulatory controls applicable to the user, data, and environment in real-time.

Data-Centric Security

NextLabs solutions provide data-centric security controls that protect sensitive data at all times, regardless of its location. These solutions can encrypt data at rest and in transit, control data access based on policies, and apply dynamic data masking to protect sensitive data. Companies can define and enforce granular data access policies based on user roles, locations, and devices.

Continuous Monitoring & Response

CloudAz’s centralized monitoring provides real-time visibility into data activity and events. This allows organizations to monitor data access and data usage to detect potential security incidents. CloudAz can provide alerts based on security policies, enabling rapid response to security incidents.

Compliance Auditing

CloudAz provides centralized auditing and reporting capabilities that enable companies to demonstrate compliance and ensure the integrity of their data security policies. Compliance reports can include data access, data handling, policy enforcement, and insights into potential security gaps.

Automation & Prevention

With dynamic authorization and ABAC, the NextLabs platform automates the enforcement of data access policies, improving data security by reflecting changes in attribute values immediately and reducing the cost of policy management.

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