8 | Acquisition International, May 2025 Creating Collaborative Business Outcomes: Why Tech and Finance Leaders Should Unite During the M&A Process n any competitive marketplace there are lots of drivers for companies to merge and acquire each other. Sometimes it’s about expanding market reach by tapping into markets that a competitor has better footings in, or it could be about being better positioned to succeed against bigger competitors. The benefits are very often easy to explain, from cost savings and removing duplicate teams, processes or capabilities to driving economies of scale associated with higher production rates. But the stakes are high and none of these benefits are guaranteed. All businesses are unique – even franchises and chains – because of the people, the customers, geography, laws, timing and all manner of other constraints, meaning the process of merging businesses is not at all straightforward. It’s easy to get caught in the trap of believing that if two companies work in closely related fields, use technology from the same vendors and follow the same legal requirements for accounting and financial practices, that merging their operations should be straight forward. Unfortunately, nothing could be further from the truth. M&A teams will be formed on both sides, and external advisors will be brought in to help with the process, but very often people’s eyes are firmly fixed on the commercial prize – the upside, the potential, the excitement. Integrating processes and systems is very often given a back seat in the process. It’s something that rears its head after the deal is done, and that’s where the uncomfortable truths start to appear: those systems from the same vendor have been configured completely differently by both companies, and the processes they support are totally incompatible. At this point, the costs of integration can easily skyrocket because we’re no longer talking about reconfiguring some systems or tweaking some processes, we’re talking about complete and fundamental change to how one or both organisations operate. And that was never part of the acquisition plan! This sounds almost too absurd to be true, but it happens more often than many would like to admit. Technical and operational due diligence are some of the easiest cans to kick down the road, but the impact of getting it wrong can be massive. The level of risk being ignored can be huge and it can mean the difference between being able to recognise those commercial benefits or not. That’s exactly what happened following a $10 billion deal which saw Goldcorp Inc acquired by Newmont Mining Corp. The newly formed Newmont Corporation became one of the world’s largest gold producers. But SAP Insights reports that the acquisition was soon beset with problems, including multiple duplicate and different IT systems that somehow had to be combined, as well as varying cybersecurity policies which increased exposure to risk for the new company. An early tech focus What if things were different? What if the M&A processes brought technology leaders to the table at the earliest opportunity, to work in partnership with the rest of the deal team? This would enable them to undertake a thorough assessment of the existing technology resources across both companies, including all of the policies and processes, the hardware and software used by both, and the skills of the people within each department. While it takes more time, it’s time well spent. In many cases these are some of the biggest transactions companies will ever do – far bigger than any individual client deal or property purchase, so using tools like targeted PoCs to identify fundamental issues with compatibility of systems as early in the deal as possible will pay dividends. Being able to assess the work involved in creating unified cyber security policies, training plans for staff who will need to use new technology, how to rationalise and consolidate cloud and on-premise technologies – these are all critically important to successful integration. Ultimately it’s about being realistic, honest and responsible about what is achievable and what the costs are likely to be. And those assessments need to be given the weight and importance they deserve in the deal making process. It’s a concept supported by the BCS, the Chartered Institute for IT, which states: “In order for the merger to be a success, IT leadership needs to be involved earlier in the M&A journey to better equip organisations in realising success earlier and at a lower cost.” When tech becomes a stumbling block We don’t have to look very far to find examples of M&A deals falling apart quite dramatically. And it’s not just about financial penalties – there can be serious regulatory, reputational and even political impact when things go wrong. When Banco Sabadell bought TSB, customer bank records were moved on to a new system – a project costing £450 million which was expected to save £160 million a year. But the process was rushed and the technical due diligence was largely skipped. The result was customers locked out of their online accounts for days unable to pay their bills, not to mention being able to see other customers’ accounts. These issues cost TSB Chief Executive By David Tyler, Founder and Director of Outlier Technology I
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