EP 80: How to Successfully Transition a Business' Most Overlooked Asset: It’s data. With Mike Butler of CSpring

Transcript

Ed Mysogland:
Well, welcome to the show, Mike.

Mike Butler:
Thanks Ed, appreciate it.

Ed Mysogland:
I'm glad to have you and and before you came on, I was giving I was given the audience a an overview of you and Seespring but I'm not certain I really did it justice. So can you just talk at the high level and then we'll we'll jump into some questions.

Mike Butler:
Yeah, absolutely. So C-Spring is a data consulting firm headquartered in Carmel, Indiana. It's been around since 1996 under different names. But we're working with both public and private sector clients. Our customers usually come to us because they want to do something around decision making. They want to do something around automation, something in that where also we deliver analytic solutions then to help them save time, money, and any frustration on that part.

Ed Mysogland:
I get you. And therein lies the point of our conversation because getting that data from point A to point B in a business sale is, I'm not really certain, everyone understands just the risk associated with that that is such a huge part of the value that you're buying. I think only, I'm trying to figure out whether or not it's more important, important or the data is more important. You know, so, so we can get into that. But I'm going to lead off with with an excerpt from the from from the the periodical chief executive. So it reads with technology plane such a critical role in organization success and failure one might think, think it would be of chief concern for M&A due diligence, but it turns out that conducted by chief executive and Elliott Davis found that only 9% believe that the acquisition targets tech capabilities is a critical driver of M&A while 21% said technology had little to do with deal-making and and I find it astounding what but you're in it what what's your thoughts on that

Mike Butler:
Well, so the business side of me is like, yeah, it shouldn't have a material impact, but the reality is there's so much about it that can create a problem in the deal. So a really good example would be if the company that you're buying has had a cyber breach and they don't know about it and you're buying something for its brand or you're buying something for its reputation or something like that, you could take on that business, realize they've had a cyber breach and maybe it's in your policy, you have to tell people that, and that as your company, not the

Ed Mysogland:
Yeah.

Mike Butler:
company you just bought. And so it's an interesting problem that shows up. But the quote makes sense. I've done a number of these. And usually technology's job is to try to figure out how to find a way. And then there's just situations where it's complicated. And I do think it's something you want to keep in mind in your due diligence process and try to figure

Ed Mysogland:
Yeah.

Mike Butler:
it out.

Ed Mysogland:
Yeah. And I follow on I follow a little bit on the on the cyber side, but on the data side, I

Mike Butler:
Yeah.

Ed Mysogland:
find it hard to believe that people aren't like, that is such an important component of what you're buying is, especially if it's, you know, a synergistic buy where

Mike Butler:
Yeah.

Ed Mysogland:
you have one party that's buying either market share, or you know, what whatever their whatever the synergy is, I would think that they would be all over, you know, data integrity and how are we

Mike Butler:
Yeah.

Ed Mysogland:
gonna get it from point A to point B?

Mike Butler:
Yeah, and so like if you were, yeah, if you're buying a company and you're like, you're buying, sometimes you're buying a customer list or you're, you're expanding into a market or something like that. Um, I was, I was reading about, uh, JP Morgan Chase had just bought a company that had falsified about 70, 70%

Ed Mysogland:
Oh,

Mike Butler:
of the

Ed Mysogland:
dang

Mike Butler:
data

Ed Mysogland:
it.

Mike Butler:
they had bought in this acquisition. Um, and they were buying, it was basically a firm that had a bunch of marketing capabilities. They were trying to attract, you know, a younger generation. Um, and so the challenge is because they didn't really do their due diligence, up front, they didn't realize that most of what they were buying was actually junk. And so they way overpaid for it.

Ed Mysogland:
So, well, I'm certain either there was some sort of vehicle to, you know, I'm certain there was some sort of recourse, but that

Mike Butler:
Yeah,

Ed Mysogland:
that lead

Mike Butler:
I'm

Ed Mysogland:
that

Mike Butler:
sure.

Ed Mysogland:
leads, that leads to the question, how do you, if I'm a buyer, and I, and I'm walking in, how do I, if I'm a, if I'm a buyer, I want to know about the data, if I'm

Mike Butler:
Yeah.

Ed Mysogland:
a seller, I'm like, Yeah, you know what, why don't we wait a little bit until we're further down the road? But how do you, how do you gap because that I have to assume that's a real, you know, I understand both sides, but how, how can you give, I guess the question is how do you provide some sort of assurance on data integrity from the sell side and give enough information that the buyer is willing to take the next step and move toward the, you know, closing the deal.

Mike Butler:
Yeah, that's a really hard one, because every organization is a little different how they interpret quality, how they interpret what they need to do. So from a buyer perspective, it's always good to know the data inventories that are out there, what you're really buying, challenge the quality of what you're buying, I think is really important. From a seller perspective, I think you really do have to be ready to address some of these challenges. So before, you might have just said, just gonna sell, it's not really gonna matter. But these days, it really does matter. Sometimes people are buying you for those digital assets more than anything.

Ed Mysogland:
Sure.

Mike Butler:
And those digital assets, that's data, that's information, it's things like that.

Ed Mysogland:
Right?

Mike Butler:
So you do have to be ready to, I usually tell people, and part of the process is to create an inventory of what's out there, an inventory of what's a part of

Ed Mysogland:
Alright.

Mike Butler:
the stale, and then essentially going through and coming up with a way you're gonna evaluate that. And so like the example of JPMorgan Chase, didn't evaluate the quality of the data. And I think it's a really good example of, as the buyer, you want to make sure you've got enough levers in place that you can try to figure out what's the value of what you're buying and what are you going to be able to do with it. I had a conversation with a CPA the other day about valuation of data within your organization. And

Ed Mysogland:
Right?

Mike Butler:
it is a little difficult. It's different if you're a data company, where if you're like Google, that's what you are, versus a company where and you're going to use it for some kind of monetization effort. And it's difficult. It's

Ed Mysogland:
Yeah.

Mike Butler:
a hard process.

Ed Mysogland:
So you and I keep talking about data and I'm probably getting ahead of myself. What? Let's let's define what data is in this world.

Mike Butler:
Yeah, so there's, I like to say there's data and there's information. So data is just like, just raw stuff. It's just things you've measured, information about your clients, stuff that's stored in applications. Could be stuff that's stored in your Google Sheets or your OneDrive or it doesn't matter what it is. But data is just everything associated with that. And it's also, people tend to think of it as digital. It's also all your paper records and things like that. It's everything you've got. tends to be something that we've done with that data, where we've created a report, or we've created analysis, or we've done something with it. So financial reports are a really good example. The raw transactions in your ledger, that's just data. And then when we take those transactions, we roll them up and we create like a P&L statement or something like that, that's information. We can now make some decisions from it and do something with it.

Ed Mysogland:
So is the value in the data or the value in the information?

Mike Butler:
It's in the data because

Ed Mysogland:
Okay?

Mike Butler:
it flows from left to right. It starts with data,

Ed Mysogland:
Oh, okay,

Mike Butler:
and then we

Ed Mysogland:
I

Mike Butler:
flow

Ed Mysogland:
get it.

Mike Butler:
into information from there.

Ed Mysogland:
I get it. So, so I know you've been part of a number of acquisitions. And, and, and that's what, you know, I was so fortunate that, that, that Emma had, had brought us together. And one of the things that, that I wanted to talk to you about is, you know, what are the challenges associated with trying to get, you know, get the data collect, you time of sale, you know, there's so much going on. How do you, how do you do that? I can tell you when we, we merged a company into, into our, our practice and it, and this is 15 years ago and we still are getting haunted by

Mike Butler:
Mm-hmm.

Ed Mysogland:
some of the idiot moves we made, um, as it related to the data and the day and who, who's database one, who's process one, who's,

Mike Butler:
Yep.

Ed Mysogland:
so I guess that's what, what I wanted to is what are some of the challenges that you see, you know, as part of a sale?

Mike Butler:
Yeah, there's a few. I'll go, I'll hit a couple. There's a lot. Well,

Ed Mysogland:
It

Mike Butler:
the

Ed Mysogland:
depends.

Mike Butler:
one you just talked about is actually like my number one is when you're involved in a sale and if it's a merger of equals and you're trying to decide, okay, who's system, who's process, who's what? That making those decisions and making explicitly and knowing like the pros and cons of what you're gonna do.

Ed Mysogland:
Yep.

Mike Butler:
A lot of times people buy, like when you, we would run into these situations where you would buy Oh, they have a better CRM. Let's just move to theirs. Well, the problem with that is you have processes in place within your organization of how you're using your existing CRM. And unless there was a plan to already move to that CRM, and you're just going to use it to jump start, it's usually a bad idea to take in processes and technology from a company you're acquiring and try to force fit your current processes on it. It's usually better to run an integration or a transform, a digital transformation project or something like that. to do some of that. Anyway, so that first inventory, making those decisions, knowing the implications of those decisions, that's my old enterprise architecture days. Those are the things

Ed Mysogland:
Yeah.

Mike Butler:
that we would have to model out. And then you get these other challenges that start to occur. So let's say you make those decisions. Well, now you have some other problems. I've been a part of acquisitions where we actually made the assumption that everything was digital form, and it wasn't. It was in paper formats. There are companies, and there are actually several in Indie, they can do transformation of data from paper to digital, but guess what? It costs per page, per word, per things like that. So there's a huge cost component that shows up if you've got things that aren't. The second thing that I think is really complicated is how you merge that data. So at this point, we make the assumption that let's say we've got it, we know we're gonna move like from one, I don't know, let's say we have Salesforce and we're gonna move it into Microsoft Dynamics, maybe that's what you're using. The problem you run into is how are you even going to do that? Like, is it even possible? What was the quality of the data that was tracked in the acquired system?

Ed Mysogland:
Yeah.

Mike Butler:
And it's a big process. I usually tell people, you're probably not going to do it with all. Some of that data you can just archive. There's some techniques for that. You can archive that data, use it later if you want. Some of that data you have to get immediately into your systems, like on day

Ed Mysogland:
right?

Mike Butler:
one or day five or whatever that turns into. And then the last thing, and there's so many, but these are like the ones I wanted to talk to you, the last thing that a lot of people don't think about is sometimes the size of the data or the application or something like that. There either aren't interfaces into it, the data is so big or something like that it's very difficult,

Ed Mysogland:
Yeah.

Mike Butler:
timely to move it, so you can't actually get it done in day one or something like that. It might take a week to just move the data around to get it into a state where you can load it. and we used to do mock runs with this stuff. We'd test everything and make sure we could actually do it in the speed we thought we could do it. But you have to model through all that, and you have to figure out, okay, how am I gonna load this data? Can I move it in the time? What's the business need? And there's a number of things you have to do. So I guess the real answer is there's a lot of challenges that show up when you're trying to move data around.

Ed Mysogland:
Well, you know, and the in the I say the funny thing, but it's it's really not funny. And we and we paid the tuition on it is, you know, everybody just assumes, all right, you have two day, let's just say databases, you have two databases, you export all your data, you put it into Excel, you you you look for duplicates or whatever you do submerging, and then, whoever database you're going to go with, you just re upload it. And I can tell you, from experience, that is that

Mike Butler:
That's

Ed Mysogland:
absolutely

Mike Butler:
not.

Ed Mysogland:
does not And the funny thing is, the and and I hope you can talk about how to help people find people like you to do this, like, because we, I mean, we did a pretty, we did pretty good due diligence on who, you know, we were getting the same information from multiple people. But at the end of the day, I mean, it was, this was not the way to handle the merging of data. So I, you know, I'm jumping around here, but a little bit about how to get how to find people like you and yeah, that's it. How to find people

Mike Butler:
Yeah.

Ed Mysogland:
like you to do this kind of work and what is the process associated with doing it.

Mike Butler:
Yeah, yeah, the easiest. So when I was consulting now, but on the other side of the house, I used to go hire consulting firms. A lot of times the companies, like your applications that you wanna merge into, they have experts within those companies. You can call them and you can say, here's what I'm working on. Do you have someone that I can work with that can help me with how I would move data? The larger problem, and you actually hit it, is essentially you have to figure out how to get data out of the system. gap the differences between how you know maybe that system was tracking data with the system you want to merge into. We then have to build and usually this is programmatic you have to build a map essentially I'm going to move this field has to become these two fields in this new system. You write that program you then test and go through that process and then there's a lot of you can do a lot of automated validation but the reality is like people have to look at it at some point and it turns out you usually want the people from the system And then from there, you do the load, if there's a way to load it. Sometimes you have to do, there's like three methods. It's database to database, right? Like you said,

Ed Mysogland:
Alright.

Mike Butler:
pull it out, shove it in Excel, do some stuff, shove it back up into another database.

Ed Mysogland:
Thanks for watching!

Mike Butler:
There's like, sometimes there's like, you can get data out, but there's no real good interface to get it in. You might have a programmatic interface or something like that. And then the last one is, you just have to do it manually. And there's some tools for that. But the way I used to find people was, my vendors, and say, hey, this is what I'm trying to accomplish. Do you know how to do this? Have you done this before? There's this whole field of just data engineering that deals with this. And I got good

Ed Mysogland:
Yeah.

Mike Butler:
at it at the last place I was at because I had spent so much time managing internally all the applications and systems and trying to get all the data together that when we would buy companies, we had the tooling to go out and deal with some of that kind of stuff.

Ed Mysogland:
And what how much time did it take? Because I know I know that's a that's a and I know it's a loaded question, but I do but I know everybody is at least the post merger integration, the

Mike Butler:
Mm-hmm.

Ed Mysogland:
PMI, you know, everybody's trying trying to, to get the deal done, and then start sprinting to toward, you know, the the reason behind the acquisition. And so, you know, how long how long of a of an undertaking? You know, is this?

Mike Butler:
It's material. So it's dependent on the size of the system, the size of the data within the system, and then where you're trying to take it. And

Ed Mysogland:
Okay.

Mike Butler:
I would say that a lot of times what I would do is I would encourage, well, and I would run it, but we would basically inventory applications. We'd inventory everything that existed, and we'd say, OK, here's everything we just bought. Where is it going? What are we doing with it? And there were like three options, essentially. It was this app goes to this app. This app goes into an archive. We're not going to do anything with it. We're just going to store the data in case we need it. And then this app, it's done. We don't, we'll never need it. It has no value, all that. So we do all that. That process takes, you know, a little bit of time for the team to work through. The actual, like gapping, mapping, and then coding all that, there's tools out there to speed it up, but depending on the system, I mean, that can be, that can be weeks to months of work, just prepping all of that.

Ed Mysogland:
Yeah.

Mike Butler:
Again, depending on size,

Ed Mysogland:
No,

Mike Butler:
and

Ed Mysogland:
no,

Mike Butler:
I'm

Ed Mysogland:
sure,

Mike Butler:
generalizing.

Ed Mysogland:
sure.

Mike Butler:
And then the validation, surprisingly, validation's a lot of work. Like making sure you did it correctly, because

Ed Mysogland:
Yeah.

Mike Butler:
I met some really great programmers in my life, but they're not perfect. They do make mistakes, and getting people that know the business and know the context of the data that was in there, because like,

Ed Mysogland:
Alright.

Mike Butler:
let's say I were to do it, I don't know your business, I would make a lot of mistakes and assumptions. You have to then catch those, and then that's, you know, probably an equivalent amount of time and the gapping and mapping and all that kind of stuff, the equivalent amount of time gets spent testing.

Ed Mysogland:
Yeah, you know, the funny thing is that you say that and, and we, you know, we see a lot of professional service firms, you know, where where their book of business is their contact list. And I take that really, really serious because that's that's somebody's living. And going back to to our train wreck of a merger, you know, we, you know, it was six months later, it's like, Hey, that's my client.

Mike Butler:
Yeah.

Ed Mysogland:
And, you know, and as as it validation. You know, it's hard to when you have thousands and thousands of contacts in your database. It's, it's hard to validate, I have to imagine it's really hard to, to do that. Right?

Mike Butler:
Yeah.

Ed Mysogland:
I mean, or, I mean, I don't understand what data, I understand what data validation is. I don't understand how it gets done.

Mike Butler:
Yeah, and so some of it you do programmatically, right? So you'd say, I don't know what you said. Let's say your name and address. Ed

Ed Mysogland:
Okay.

Mike Butler:
at this address shows up in this system and in this system. So some of that we try to do programmatically. So your quality question you asked earlier, this is where this starts to come in. So let's say, or actually my name's really good example. So Mike or Michael. Sometimes

Ed Mysogland:
Oh, sure.

Mike Butler:
maybe I'm a client of both companies. I'm stored different names in each one.

Ed Mysogland:
Yeah.

Mike Butler:
My address is the same. So the question becomes, is that two different? people or is that one person? You start to

Ed Mysogland:
you

Mike Butler:
get into these challenges with how to actually deal with that. And so it's more complicated than I think people realize. And so sometimes you have like unique identifiers like social security number or something like that you might have in some industries or we call

Ed Mysogland:
Sure,

Mike Butler:
it PII,

Ed Mysogland:
sure.

Mike Butler:
personally identifiable information. The reality is a lot of times with a lot of business you don't have that and so you're doing a lot of address matching and name matching and trying to figure out like

Ed Mysogland:
I get

Mike Butler:
do

Ed Mysogland:
it.

Mike Butler:
you have common customer records? Can you merge these? Can you not merge these? And you make some decisions. And like you said, like I've seen situations where those have bombed because the decisions we made were wrong. A mailing goes out or a communication

Ed Mysogland:
All right.

Mike Butler:
goes out and suddenly customers are calling you saying like, why did you send me two different quotes on this thing that you made for me? These

Ed Mysogland:
Right,

Mike Butler:
look like two different numbers. So

Ed Mysogland:
right.

Mike Butler:
it's challenging.

Ed Mysogland:
No. 100% and which leads me to my next question of how do you determine whose system is superior? Like for example,

Mike Butler:
Yeah.

Ed Mysogland:
if my target is superior to my system, there's something about, you know what, I'm the guy writing the check, I'm going to force feed you into my system. Do you do you get into? Yeah, I'm looking at both systems and this

Mike Butler:
Mm-hmm.

Ed Mysogland:
is why it's superior to that.

Mike Butler:
Yeah, you can do application assessments. And then what I challenge people with is, which system do you actually have the ability to migrate into? Are you buying it? So if you're doing the acquisition and part of the acquisition is you want that system that was part of the deal and you want to move

Ed Mysogland:
Sure.

Mike Butler:
to it, then I'd say it's part of your strategy. Like, it makes total sense. Move into it. Let's figure out how to do it. If it's not, sometimes what I encourage is, hey, if timeline is really important to you, if you're like, yeah, I want this all in like two weeks. I want to, I want when legal close happens and I own it, I want this done in two weeks. What

Ed Mysogland:
Hmm.

Mike Butler:
I generally encourage there is minimize the amount of change possible, which means you don't, because the thing people don't think about in that is that's probably definitely possible, right? You can move the other way. Do you have the time to retrain your staff, your back office operations, all that kind of stuff, to move from one system to another? Or during an acquisition, do you need to completed state and then you can talk about maybe migrating that new software later or something like that. So it's really I think it's really dependent on the strategy. I do have strategy conversations with people and that kind of stuff is what are you buying for? How important is it to you? And you know do you want to potentially do you want to spend more money because if you're buying a smaller company and they don't have the maybe they don't have the technical expertise so they don't have the the data expertise in-house you know we've done that we'll come in and we'll provide that service but it's a lot of through when we do that.

Ed Mysogland:
So is it the appropriate time to basically re retool data and

Mike Butler:
I'm going to go ahead and turn it off.

Ed Mysogland:
the handling the data at acquisition or does that create. I'm trying what I'm trying to piece together

Mike Butler:
Mm-hmm.

Ed Mysogland:
is can if I'm a buyer I buy in you know I make no changes I kind of I kind of get my feet under me figure out where all the moving parts are and where the fires are. I suppose I could be running two simultaneous systems. How does see spring or how do you guys come in and and then just say all right we're going to dump this together and and and now we're going to we're going to design this the way it should be both the both of your systems are inferior to what what two thousand twenty three technology can provide you I mean I know you guys do that but

Mike Butler:
Yeah.

Ed Mysogland:
how how would that look

Mike Butler:
Yeah, so let's say you called me and you said, hey, I just did this acquisition. I've got these two CRMs, and I need to figure out what to do. You're right. And there's three decisions, essentially, that happen. So you can stay on your CRM, and we talk about the implications

Ed Mysogland:
Mm-hmm.

Mike Butler:
of that. You can move to the new company CRM. Or, well, actually, there's four. You can leave them both on their own CRMs, and I'll talk about why that's important in a second. Or you can move to a completely new one, field it, build your own, whatever. And what we'll do is we talk through each one of those, pros and cons, what we're trying to accomplish, business goals, all that kind of stuff. The reason, and you'd say like, well, wait a minute, Mike, you're talking about data, and why would you not want to migrate the data? Because generally I would say always

Ed Mysogland:
Right.

Mike Butler:
pick one place. The only time I've ran into where I would recommend you don't is if you are buying the business and your plan is short term to divest it later and you're going to sell it again. Sometimes I would make the argument. separate and we can we can do on the back end though there's a there's a technique called a data hub where we can actually build a way to at least feed information between those systems so that there's some

Ed Mysogland:
Sure.

Mike Butler:
updates occurring

Ed Mysogland:
I

Mike Butler:
but

Ed Mysogland:
got

Mike Butler:
the

Ed Mysogland:
it.

Mike Butler:
other ones we talk through you know what are the what are the opportunities what do you want to accomplish what's what's the cost to accomplish those things because sometimes it's a price point thing and you're saying now I want to do the simplest thing whatever but let's let's say you bought two you you're on a very antiquated CRM and the company bought on a really and part of your plan is we're gonna do some digital transformation, we're gonna make this way more digital, we're gonna automate more things like that, we wanna move on to, I don't pick

Ed Mysogland:
Yeah,

Mike Butler:
one,

Ed Mysogland:
sure.

Mike Butler:
Salesforce. We have that conversation and then what we do is we build those models in terms of how we're gonna move data and generally though we'll move one system, make sure it all works and then move the other and we'll do the one that's the easiest. So sometimes it's the company that you've integrated or you've bought and

Ed Mysogland:
Yep.

Mike Butler:
you're working on the integration, we'll move them first, make sure it works and then you move the main company later. So there's a lot of different models. it and we do do a lot of strategy and decision-making associated with it.

Ed Mysogland:
Do you do any, do you do any due diligence on the target? Like for example, I'm a buyer and I'm saying, all right, here's a ABC company I'm looking at, you know, do you, do you guys ever go in and do some preliminary due diligence before, but you know, for on behalf of the buyer to figure out, you know, this is, this is what you're looking at as far as getting it from point A to point B.

Mike Butler:
We haven't, honestly. I've been on due diligence teams, though, and put together plans like that. So it wouldn't be hard for us to do. But what I would actually do, so if you called me and you said, hey, Mike, I'm thinking about buying this company, but I'm buying them for their customer list and some technology they have and some of these types of things, is there any way you could help me understand how complicated this is gonna be? We do have that capability. A lot of times what we'll look at, we'll wanna get a little bit of information around them, It helps us kind of give you like a essentially like a maturity level of where they're at as an organization. We can then tell you from a complexity perspective what's going to happen. And then I would do, we have a high level framework for data quality assessment. I would run that assessment on the data you find critical. Not all of it, but a piece of it.

Ed Mysogland:
Well, I'll tell you, so many of the businesses that we see, and we've done about 2200 deals, and I'm telling you that this whole data thing, I mean, this is so low on

Mike Butler:
Yeah.

Ed Mysogland:
the totem pole, and it's totally surprising to me that it is. And so I was trying to formulate the appropriate question on if I'm a seller and I'm trying trying to prepare. All right. So, so what are what are what data standards and quality control and processes? What, what am I trying to, to give to the buyer that makes your, you know, someone like your jobs easier? Or how do I pass that, that data due diligence? You know what I'm saying?

Mike Butler:
Yeah, I do. Yeah, so like standards and that approach.

Ed Mysogland:
Yeah.

Mike Butler:
So for us, what I would be looking for is, so I'd be looking for like an inventory of all your, because you have to think from a seller perspective, if you can show you have some of this stuff, you might be able to increase your sale point, right? You might be able to

Ed Mysogland:
Yeah,

Mike Butler:
say, like, I have better

Ed Mysogland:
sure.

Mike Butler:
customer data. I have more of this. So we look for inventories of data. Like, do you know your applications? You know your data sets, all that kind of stuff. And then we look to say, OK, do you Policies or standards or what what processes are you following internally to maintain data to work with data? It gets a little different to if we start to see things like PII or PHI data We'll start to ask do you have controls around that like

Ed Mysogland:
What

Mike Butler:
is

Ed Mysogland:
does

Mike Butler:
it?

Ed Mysogland:
that mean? What

Mike Butler:
So

Ed Mysogland:
is PHI in?

Mike Butler:
yeah, so PII was like personally identifiable information. So social

Ed Mysogland:
Oh, right,

Mike Butler:
security

Ed Mysogland:
right.

Mike Butler:
numbers

Ed Mysogland:
Yeah. Uh-huh.

Mike Butler:
PHI would be health care data

Ed Mysogland:
Got it.

Mike Butler:
And if you're buying a company that has you know, maybe you're buying a company that has some of that kind of data We definitely want to know what time of controls because usually there's some kind of regulatory component to that. But there are standards out there, there's nothing that I would just grab and say, here's what we have to compare, but that's where I would go grab a regulatory standard and say, okay, you are a healthcare whatever service provider, you have PHI in your shop, how are you managing that? Because we need to understand that because there's a lot of value in that and if there's data issues or things like that, we're going to have a problem. like how they've dealt with data within their environment, what are they doing with it, what's their culture look like, things like that.

Ed Mysogland:
I got it. So. Who is responsible? I mean, who do you tend to work with on both sides? I mean,

Mike Butler:
Hmm.

Ed Mysogland:
are you working with the business owner? I mean, for the people that we serve, and I know you guys work with some substantially larger companies than, say, that's in our target market, but who do you normally work with?

Mike Butler:
I'm

Ed Mysogland:
there's

Mike Butler:
gonna

Ed Mysogland:
got

Mike Butler:
go.

Ed Mysogland:
to be there's got to be there's got to be somebody at you know that that controls the data

Mike Butler:
Yeah.

Ed Mysogland:
does that make sense so who are those people

Mike Butler:
So we're with all sizes of companies. So smaller, really small companies, few people, stuff like that, it's usually the owner. We're gonna work with the owner directly, and they might have a person that they work with that'll tell us. As the companies go up in size, it actually gets, it's pretty interesting. A lot of times your accounting teams are controlling a lot of that kind of stuff. So if you have,

Ed Mysogland:
No.

Mike Butler:
yeah, yeah, accounting teams actually, they have a lot of the financial data, so a lot of what they're controlling is the movement of if that financial information is gonna come out, where it sits. things like that. If they have a technology team, obviously that's a group we would work with directly. They're usually the gatekeepers of a lot of that kind of stuff. They usually don't know it that well though.

Ed Mysogland:
Yeah.

Mike Butler:
They usually know what it is and how to get it to you and how to give you access, things like that. But a lot of times, yeah, financial teams, IT people, owners in some case, if it's smaller, if it's a larger organization, you start to run into, they have like analytics

Ed Mysogland:
Right.

Mike Butler:
kind of the gatekeepers of some of that. And then sometimes like operational folks and things like that. But again, you're 100% right. It depends on the size and the scale of the organization and it's different people depending on that.

Ed Mysogland:
Yeah, because I mean, I look at, you know, a shop like ours. I mean, it's all break, fix work. I mean, our database breaks and we go find somebody to fix it, you know, rather than than somebody, you know, and, and I, I, the businesses that we, we see there doesn't seem to be any, they're more like me than, than, you know, have somebody on staff that, that kind of that's the

Mike Butler:
Yeah,

Ed Mysogland:
data czar, you know

Mike Butler:
yeah,

Ed Mysogland:
what I'm saying?

Mike Butler:
yeah. And you can do like fractional services with companies too that can become that data czar for you. We do

Ed Mysogland:
Oh.

Mike Butler:
some of that kind of stuff. And sometimes it's not necessary. You do just need to do break fix. And it's a question of

Ed Mysogland:
you

Mike Butler:
if you're thinking about like getting ready for a sale, you're like, you can do in a set, hey, can you come in and just help me with some perspective so when I do my sale, I'm in a better spot to tell them that my customer records are good, my information's

Ed Mysogland:
Oh,

Mike Butler:
in a good spot.

Ed Mysogland:
right. And, and what's prompting this is, you know, we're seeing more and more businesses do quality of earnings reports. All right.

Mike Butler:
Mmm.

Ed Mysogland:
And, and, and

Mike Butler:
Yeah.

Ed Mysogland:
that's a, you know, that's a low level audit, but the same thing I, I think goes with the data. And

Mike Butler:
Yeah.

Ed Mysogland:
I'm, but I'm, but my point is, I'm really surprised that there's not more emphasis on the data. And I, and I guess I'm, I'm curious to know why you think that is. Because I mean, you've seen so many deals. I'm just curious to know why aren't why aren't we, you know, we're looking for customers and customer concentration. But we're not looking at, you know, the the data process, we're not looking at, you know, how how this business actually works, all we're focused on is revenue and earnings, you

Mike Butler:
Yeah.

Ed Mysogland:
know, I'm saying,

Mike Butler:
Yeah. And is it accurate? Right. That's the end.

Ed Mysogland:
right?

Mike Butler:
You're asking yourself that. Yeah. That's I dealt with socks for four controls a lot, which are essentially that is, you

Ed Mysogland:
Mm-hmm.

Mike Butler:
know, how do you know our data, our financials are accurate. And what's interesting in that process is you really do get down into data processes and not the finance, not just the financials, but anything, anything that we call it data lineage, anything that moves from, I don't care, a product you sold up into your income statement.

Ed Mysogland:
Yeah.

Mike Butler:
So a lot of times I think it's really just, it's an education thing. You know, it's not, it's the space, like a lot of people think is a technology space. It's like, ah, it's IT people. They're the ones that work with data. And the reality, I mean, I built my first BI teams with accounting people because they already, accountants already speak data. They just speak

Ed Mysogland:
Yeah.

Mike Butler:
it in the financial terms and they speak business. So it's actually a really good model. But I think it's maturity. I think it's education. I think there's just, like this conversation that you and I are having, which is amazing. People don't have enough of these types of conversations just talking and saying, like, what should I be concerned with? Like, do I need to go learn how to do all this? And it's like, no, you don't need to learn how to do it, but you need to be aware of it. And if you know what's out there and what's possible and how do you make, build confidence? That's a lot of times the control

Ed Mysogland:
Yeah.

Mike Butler:
layers that you're talking about do. How do you build confidence that your financials are accurate and while you do that, because you make sure your data is accurate and whatever's feeding those.

Ed Mysogland:
But as it as it relates to that, if I'm if I'm the business owner, I'm like, OK, you know, there's two schools of thought, you know, why spend the money

Mike Butler:
Hmm?

Ed Mysogland:
before I have to? And if I'm because if the buyers, if the buyer is going to scrutinize my data and scrutinize my tech tech hierarchy and how how it all operates, I'm I'm trying to figure out. And that's where the question is, is it better for the to say, you know, I'm gonna call Seespring and here's what we're going to do. We're going to figure out, you know, kind of give an overview of what we have.

Mike Butler:
Mm-hmm.

Ed Mysogland:
Does that make more sense? Or does it make more sense to say, look, you know, I know I'm getting ready to get a, you know, technological colonoscopy and it's, you know, and that's just the way it works, you know.

Mike Butler:
Yeah.

Ed Mysogland:
So, which is superior? providing this is what I have as, as opposed to the buyer coming in and elongating the due diligence process.

Mike Butler:
I think that's more, you just hit it. Like, if you've got that ready to go, it's like a, it's just, here we go. Like, we can start the deal, we can start having the conversation. If you get a buyer, though, that becomes, again, it's about trust, really concerned with, hey, your financials, like, where's this data coming from? Like, how did you build it? And you're like, well, I have the system, and I just do stuff, and I'm, I don't know how they enter anything or how anything gets in there. That's, you start to have a confidence problem, and at that point, how

Ed Mysogland:
Right.

Mike Butler:
you're gonna get confident. And a lot of times, you know, maybe they're doing a financial audit, but at some level, sometimes what they're doing is they're actually doing a data audit. They're looking through that data and how it's getting in there and what's happening and things like that. So I'm a fan of, I mean, I agree, it's actually a price point. It depends on your situation and the type of industry you're in and a lot of different things. But I'm generally a fan of do the stuff upfront to help some people sell their businesses. Do it upfront to sell your business. Make it a little easier. Maybe just do you know an hour or two consulting of just trying to figure out where you're at what you need to do What you can clean up and it just make your sail go a lot faster and a lot cleaner

Ed Mysogland:
I would think so too. So let me ask you, how do you, how would you, I guess, describe the, the, the pros, what you would, what you guys would do, you would come in and, and how you would evaluate how you would scope it. And, you know, and, and certainly, I understand fees are based on, on the scope and breadth of the project. I get that. But can you, can you kind of give an overview of, you know, this is kind of what it would look like for us to do a presale tech audit or data audit.

Mike Butler:
Yeah, we have a model we call the quick start discovery and essentially there's a part of that that we can, that's what we assess and we come in and we talk about the scope, we talk about, okay, what do you want us to look at? Because a lot of times it's that Pareto principle, 20% of the data is 80% of the value and you say that's where I want to spend my time. We scope the engagement, the quick start discovery to look like that and what we do is we go through and we essentially evaluate all that. moving, things like that. We do the same thing if you called me and you say, hey Mike, I want to do a bunch of transformation work, I want to automate more, same concept, we have to look at all the same stuff because data drives all these things. And then from there that gives us kind of a high level kind of write-up and assessment on options, which you can decide to do yourself, you can hire us to take the next steps, or you can just say, all right, I'm good, I'm going to give the buyer this and just tell

Ed Mysogland:
Right.

Mike Butler:
him here's some stuff you're going to clean up.

Ed Mysogland:
So as you as you do that, how confidentiality is so important

Mike Butler:
Mm-hmm.

Ed Mysogland:
in in the pre sale part? How do you get around with hey, why is Mike climbing all over our database? You know,

Mike Butler:
Yeah.

Ed Mysogland:
how do you work around that?

Mike Butler:
So the auditor hat's a really good one. So if

Ed Mysogland:
Okay.

Mike Butler:
we used to use that one, you pretend to be an auditor and you say,

Ed Mysogland:
Sure.

Mike Butler:
ah, we're auditing systems, we're going to give recommendations on enhancements, things like that.

Ed Mysogland:
Okay.

Mike Butler:
And less, and we can do that, we can just say, ah, we're auditing systems for security, for automation capabilities, things like that. Especially when it's, this is a buyer to seller deal, it's the owners usually. I've been a part of public financial companies that are trying to make those decisions,

Ed Mysogland:
Yeah.

Mike Butler:
and we have to sign, and so whenever I'd work with the company that we were going to acquire, we would do that as auditors.

Ed Mysogland:
I get

Mike Butler:
Which,

Ed Mysogland:
it.

Mike Butler:
if you do enough research and you start to look into why is a CTO of a financial company auditing

Ed Mysogland:
Sure.

Mike Butler:
this other financial company, you can start to do the math. But

Ed Mysogland:
Sure.

Mike Butler:
that's what we would do. We would come in and say, you know, we're thinking about doing some work with you guys, we just have to audit where it's at. So C-Spring can do the same thing. We can say, oh, we're just doing a system audit, we're gonna help you with some plans. And that's why the Quickstart Discovery Model because it can kind of move different directions.

Ed Mysogland:
Sure.

Mike Butler:
But yeah, I totally get the confidentiality. You can't go

Ed Mysogland:
Yeah.

Mike Butler:
in and just say, hey, your owner's going

Ed Mysogland:
Yeah.

Mike Butler:
to sell the business.

Ed Mysogland:
Yeah. Well, I'm trying to quantify, you know, I'm a, I'm a value guy. I've, I've always been really, I, one of the things that our firm prides herself on is, you know, when we say, you know, this is probably what the business is going to sell for, we're pretty, we're pretty accurate. And,

Mike Butler:
That's pretty good.

Ed Mysogland:
and well, but, but as I, as I'm talking to you, I'm sitting accurate, but I would love to know how to slice that data piece and say, you know what,

Mike Butler:
Mmm.

Ed Mysogland:
this is, this is the value, you know, we, you know, when, when you sell a business, you have your allocation of purchase price and you know, so much goes to goodwill and this falls into that bucket,

Mike Butler:
Okay.

Ed Mysogland:
but I'm curious to know how, you know, if you can carve out and say, you know what, your data is worth this because we, we sometimes bump into clients saying, you know, I don't, you know, I'm closing the business. sell my my customer list or I want to sell my CRM or whatever. I'm curious to know, is there rules of thumb? Is there? How do you how do you do that? If if you can do it at all? I'm skeptical to say that that's good. That's a hard one. Right?

Mike Butler:
Data valuation is really hard. If you can direct sell data, there's ways to do that. If you have a specific data set you've collected over the years, and there's data exchanges and marketplaces where you can direct sell it, it's pretty straightforward. I can give

Ed Mysogland:
Yeah.

Mike Butler:
you an estimate. If you're using it from a monetization perspective to enhance processes in your company, and augment sale stuff, things like that, it gets really, it's a little pro

Ed Mysogland:
Yeah.

Mike Butler:
forma-ish. And the last one, what gets really hard about right now is like when you're selling your business, do you invest in the front of it and say, hey, if I spend $1,000 on some consulting time just to figure out something, am I going to get a 3x return on that? Or am I just going to spend $1,000 and get

Ed Mysogland:
Alright.

Mike Butler:
$1,000 less? It's really difficult. I would say in data heavy industries, you're probably going to get the return.

Ed Mysogland:
Yeah, I

Mike Butler:
If

Ed Mysogland:
would too.

Mike Butler:
like in industries where like my brother owned gyms and he sold them. When I do his valuations and we talk about that kind of stuff, the only data that's valuable is his member list.

Ed Mysogland:
Right.

Mike Butler:
And he can validate that himself. He doesn't need to hire a consultant to just do a member validation. But if you have a really data heavy industry, and that

Ed Mysogland:
Yeah.

Mike Butler:
data does have a lot of value, there's large customer lists, things like that, knowing how accurate that data is can have some validity and can help your argument when you're negotiating with your buyer. So hard to

Ed Mysogland:
Yeah,

Mike Butler:
put a concrete

Ed Mysogland:
no, no.

Mike Butler:
number on it, though.

Ed Mysogland:
Well, but again, and and I think the goal of us talking was, you know, that this is this is often an overlooked area

Mike Butler:
Yeah.

Ed Mysogland:
of a sale, and it would behoove you, you know, whether you're on the buy side, looking to, you know, understand the data or you're on the sell side, you know, that, you know, how do you prepare? You know, this is part of the preparation of have the runway to do it. This is a really a great thing to to to consider. Um, I know we're bumping up on time. So I want I got two more questions. One

Mike Butler:
year.

Ed Mysogland:
can, can you you know, when we initially talked to you, or you had talked about some of the some of your your war stories, I'm just curious to know what, what's the most complicated one you've gotten into?

Mike Butler:
The most complicated deal that I was ever, probably ever a part of was a federal takeover of a bank in which we found out that we owned the bank, we were going to own the bank. Normally in a normal cycle, you've got about three to six months of planning and finding out before you have what's legal closed and then you go through integration and that's another whatever number of months. We had three days.

Ed Mysogland:
Jeez.

Mike Butler:
We had to run the bank on a Monday morning. There were I was a I don't remember my role back then But I was essentially in charge of IT. There were no No, IT people were left at the company. They'd all quit the Sheriff's and the federal regulators had come in and they'd essentially locked all the people in that building told them they couldn't leave Until they had there was an investigation going on into the CEO

Ed Mysogland:
Sure.

Mike Butler:
So you had a bunch of people that hadn't slept you have armed federal guards and sheriffs

Ed Mysogland:
Thanks for watching!

Mike Butler:
wandering around this building. I had to bring a team in. And so when we're talking about data, the chief accounting officer needed decisions. She had to make them on Monday. We had to figure out how to get access to all this data. We had to figure out how to maintain all their systems, all this kind of stuff. We essentially had three days to do it. It was, I wouldn't even say it was full, it was successful. But personally for me, I learned a bunch of lessons from an architecture

Ed Mysogland:
Yeah.

Mike Butler:
perspective, from a strategy perspective, because I was used to the 12 month runway, the planning

Ed Mysogland:
Sure.

Mike Butler:
and

Ed Mysogland:
Alright.

Mike Butler:
do it. So that was probably the most complicated one I've ever been a part of and probably the most stressful to be honest with. Well,

Ed Mysogland:
Yeah. Yeah.

Mike Butler:
the most stressful from a timeline perspective.

Ed Mysogland:
Yeah. I was gonna say I heard I heard I saw your lips moving and all I heard was stress.

Mike Butler:
Yeah, it was. I lived in the basement of that

Ed Mysogland:
Oh.

Mike Butler:
bank for a while

Ed Mysogland:
Ah.

Mike Butler:
and it was, you know, the stuff we would hear and trying to find a password to something because all these people had left

Ed Mysogland:
Sure.

Mike Butler:
was nightmarish. Actually, we built, it was the early mid 2000s, we built a data mart, a data warehouse in like three days and we'd never

Ed Mysogland:
Oh.

Mike Butler:
done it that fast before. Usually that's months of planning and work. I was all excited because by Wednesday I was able show people we can start making right decisions because there's some things that happen when the

Ed Mysogland:
Sure.

Mike Butler:
Fed takes over. And the only thing that I got told by the executive team at the time was they were like, man, we really needed this all on Monday. And I was like, oh my gosh, we just pulled off a miracle. So I did actually, before I left,

Ed Mysogland:
Okay.

Mike Butler:
I put in the architecture and the structures, if you know, for that bank anyway, that ever happens again, they have the tooling to go deal with that day one.

Ed Mysogland:
Good for

Mike Butler:
So,

Ed Mysogland:
you. That's awesome.

Mike Butler:
yeah.

Ed Mysogland:
All right, last question I asked us of every single guest. So if you have one piece of advice to give our listeners that would have the most immediate impact on their business, what would it be?

Mike Butler:
Ah, so I'll lean into data, because it's what I do.

Ed Mysogland:
Yeah, I was hoping you would.

Mike Butler:
Definitely, it's gonna be a data, it's gonna be data. So, what I like to tell people is, this is the chief data officer to me, is your data is monetized, or can be monetized, and realize that. So that doesn't necessarily mean you're gonna sell it directly, it means you can use it to create value within your company in some way. So, but to do that, and to create outcomes from it. I really tell people you have to treat your data like you would treat your financial assets. What I mean by that is you need to know where it is, you need to know what you're using it for, and you know the state it's in. And if you know those

Ed Mysogland:
Okay.

Mike Butler:
things and you're treating it like you treat your money, there's a lot of stuff you can do with it.

Ed Mysogland:
Got it. All right, my friend. Well, what's the best way we can connect with you in C-Spring?

Mike Butler:
LinkedIn is a great way to find me. I'm super responsive on LinkedIn or you can actually just email me at C spring Which I think we'll have in the in the show notes

Ed Mysogland:
Yeah, it'll be in the notes. Well, Mike, I've got a minute to spare.

Mike Butler:
It was

Ed Mysogland:
I

Mike Butler:
great,

Ed Mysogland:
sure,

Mike Butler:
Ed. You were

Ed Mysogland:
yeah.

Mike Butler:
a great, incredible research, incredible,

Ed Mysogland:
Well,

Mike Butler:
incredible. It was a lot

Ed Mysogland:
well,

Mike Butler:
of fun.