A Data Prenup Makes Changing DMS Vendors Easier

In 2011, long before we worried about ransomware taking down our businesses for weeks or months at a time as happened in July 2024, I sat down with one of the “C”s at Asbury Auto Group, the fifth largest car dealership group in the country and discussed their decision to close the data department. You see I was the manager of the data team and we were archiving all the data from all the various ERP systems the company had.
The company had just made the decision to go all in with ADP, the predecessor to CDK for their ERP and document management solutions. They also used e-lead for CRM solutions. At the recommendations of outside consultants, they had decided to eliminate their own data center storage. The savings would be huge they told the board. There would be no need to expand storage, a $500,000 bill, and the company could eliminate the data team as well as the IT Systems team, huge. Afterall, with this solution, there is no need for Asbury to host their own data, they can just pull it from ADP or e-Leads as they need it.
And so, I asked the question that no one dared to ask. “What about the divorce?”
The “C” that I was having lunch with poo poo’d me as we sipped iced tea. Why there was no need to think about such things I was told. I replied that despite what you might believe today, these are the things we should consider today, so we don’t have issues in the future.
It is 13 years later, and Asbury is suing CDK, who bought e-Leads along the line, to get access to their data so they can convert to another vendor. This is not a standard ransom ware attack. This is a corporation holding another corporations lifeblood hostage so they will not transition to another vendor.
This is all about a corporate divorce. Something that is risk management 101. Why didn’t the Board of Directors ask the question of the C Suite that the Manager of Data Solutions asked at the time, “What about the divorce?”
As Finance professionals are you asking that question today when you sign up for next ERP, CRM or Document Management System? Who owns the data? Even if it is you, can you retrieve it? Do you have a backup plan?
Offline storage is cheap and the ability to back up your own data to cover your company in the event of a ransomware attack or a corporate ransom attack is well worth the price.
You may love your cloud based vendor today but when that contract is expiring…
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