1. The role of technology in value creation (and destruction) in M&A

The investment committee approved the deal on a $35M synergy story. Procurement consolidation, sales cross-sell, and a “simple” IT rationalization line that looked like a rounding error.

Day 120 after close, the teams still couldn’t run a single customer list across the combined company. The sales orgs were on two CRMs, two identity stacks, and two ways of defining “active customer.” The analytics team built a daily spreadsheet bridge. Cross-sell slipped a year. Churn ticked up. The synergy wasn’t wrong. The timetable was.

In M&A, technology rarely kills value in a dramatic way. It kills value by setting the speed limit: how fast you can separate, how fast you can integrate, how fast you can change pricing, and how fast you can take cost out without breaking operations.

The primary decision is simple and often left implicit: will technology be treated as a value workstream with explicit gates, or as an implementation detail after close? The answer determines whether the first year is “capture the thesis” or “keep the lights on.”

Technology is the deal’s timing mechanism

Most deal models assume value moves on an org chart. Consolidate teams, renegotiate vendors, roll out best practices, and the savings arrive.

In reality, value moves on systems:

• You can’t take procurement savings if you can’t consolidate vendor master data and approval flows.
• You can’t cross-sell if account ownership and pricing rules live in two disconnected CRMs.
• You can’t exit a TSA if the parent controls your identity, network, or ERP access.
• You can’t rationalize apps if critical integrations are tribal knowledge and nobody owns the interfaces.

This is why “IT synergy” is usually the wrong label. The real question is: which parts of the business case are gated by technology, and when do those gates open?

Build a tech value bridge (before you build a plan)

Best teams do one thing early that changes the arc of the deal: they translate the investment thesis into a small number of technology outcomes with dates attached. Not architecture diagrams. Outcomes.

Think of it as a bridge with three layers:

1. Value thesis (what the deal must deliver): cost-out, working capital, revenue synergies, faster product launches, improved service levels.
2. Business levers (how the value shows up): procurement compliance, integrated sales coverage, unified pricing, consolidated close, standardized operations.
3. Technology gates (what must be true to pull the levers): identity and access model, data definitions, core system boundaries, interface inventory, cutover approach, cyber controls.

If you can’t draw a straight line from “$X of value” to “this system change by this date,” you don’t have a tech plan. You have a task list.

A simple way to do it in diligence

In a 60–90 minute working session with the deal lead, finance lead, and IT lead, force three outputs:

1. Top 5 value levers and their timing. Not “synergies.” The actual programs: vendor consolidation, SKU rationalization, cross-sell, plant consolidation, pricing harmonization.
2. For each lever, the technology gating item. Example: “cross-sell requires a unified customer ID and a shared quoting workflow.”
3. A gate date and a fallback plan. Example: “If customer ID unification isn’t ready by Day 100, we run a manual quoting bridge for the top 50 accounts and keep the rest separate.”

This is where teams get honest. If the business case assumes integrated pricing in six months, but the combined company runs three ERPs and two CPQ tools, you either fund the bridge or change the value timing. There is no third option.

Where technology destroys value (and how it happens)

Technology-driven value leakage is not “the integration was hard.” It’s usually one of a few repeatable mechanisms.

Pattern 1: The model counts gross synergies and ignores offsets

The business case promises $12M of run-rate IT savings: retire duplicate tools, consolidate vendors, move to one platform.

Then the offsets arrive:

• The business adds new SaaS to paper over process gaps during integration.
• “Temporary” contractors become permanent because nobody has time to rebuild integrations properly.
• Two “sunset” systems stay live because the business can’t stomach retraining or data cleanup.

The math still works on paper. The net doesn’t show up in EBITDA.

What good looks like: model offsets explicitly. For every savings line, ask “what cost are we adding to make this safe?” If you don’t name offsets in the plan, they will appear later as “run the business” spend with no owner.

Pattern 2: The TSA becomes a value trap

TSAs are meant to protect Day-1 continuity. They often become the default operating model because exiting requires capability, data, and systems the buyer doesn’t yet have.

Two triggers tell you the TSA is becoming a trap:

• The deal team treats the TSA end date as a schedule, not a readiness gate.
• “We’ll figure it out post-close” shows up on anything tied to identity, ERP access, or shared reporting.

What good looks like: design TSAs with exit triggers, not just exit dates, and run an exit readiness review at month 3 and month 6. If you’re not materially through data migration testing and process documentation by month 6, you’re not exiting on time.

Pattern 3: Integration efforts target systems, not the value path

Teams often start with the biggest systems because they’re visible: ERP, data center, network.

But the first year value path often runs through smaller things:

• customer and product master data
• quoting and pricing rules
• identity and access entitlements
• reporting definitions for KPI tracking

If those are wrong, the business can’t execute the programs that justify the premium.

What good looks like: sequence work around value gates. If procurement savings are the first-year value driver, vendor master, contract data, and approval flows are Day-100 work. ERP consolidation can be a year-two move.

Decision framework: choose your technology ambition early

Every deal has more technology demand than capacity. The only way to stay out of crisis mode is to choose an explicit ambition level and sequence accordingly.

There are three viable “lanes.” Trying to run all three in parallel is how deals burn cash and miss the thesis.

Lane 1: Stabilize (protect Day-1 and cash)

Choose this lane when operational risk is high:

• Carve-out scope is messy (shared identity, shared networks, shared data).
• The target has fragile operations (high ticket volume, tight SLAs, regulated processes).
• You’re inheriting technical debt that already causes outages.

If/then triggers:

• If Day-1 continuity depends on systems you don’t control, stabilize first and treat separation as a product with its own owner.
• If the TSA is under 9 months and the carve touches shared identity or connectivity, plan a minimum viable stand-up (identity, network, core apps) before you chase synergies.

Lane 2: Integrate (capture first-year synergies)

Choose this lane when value depends on coordination across the combined company:

• cross-sell and coverage models
• procurement compliance and vendor consolidation
• consolidated reporting and performance management

The mistake is confusing “integrate” with “replace.” You can integrate outcomes without forcing a single platform in year one.

If/then triggers:

• If the value case depends on revenue synergy inside 2–3 quarters, prioritize customer master, CRM interoperability, and quoting workflow ahead of core system replacement.
• If you have more than two ERPs and you need consolidated reporting within 12 months, build a reporting layer and process standardization first; avoid full ERP consolidation as a year-one dependency.

Lane 3: Transform (change the cost curve or growth profile)

Choose this lane when the deal thesis includes a technology step-change: platform modernization, data product buildout, ERP replacement to standardize operations, or a major cloud shift.

Transformation can create real value, but it is unforgiving in the first year if Day-1 and basic integration are not stable.

If/then triggers:

• If you can’t articulate “minimum viable Day-1” in one page, you’re not ready to transform.
• If the hold period is short and the value case is mostly cost-out, prioritize integration and rationalization over a multi-year platform rebuild.

What to do in the next two weeks

If you’re diligencing or just signed a deal, a small set of actions will prevent most technology-driven value leakage.

1. Run the tech value bridge workshop (deal lead + finance + IT). Output: top 5 value levers, their technology gates, and gate dates with fallback plans.
2. Quantify the “offsets” up front. For each synergy line, name the spend required to make it safe (data cleanup, integration tooling, security controls, training, temporary duplication). Put an owner on each.
3. Choose the ambition lane and freeze the first 100 days. Stabilize vs integrate vs transform. Write down what you are not doing in the first 100 days.
4. Define Day-1 minimum viable in plain English. “Orders flow, payroll runs, cash posts, customer support sees the right data.” If you can’t say it simply, you can’t test it.
5. Stand up governance that matches the gates. One executive owner for Day-1 continuity, one for value capture. Weekly decisions, not weekly status.

Technology doesn’t “enable” the thesis. It sets the constraints and the timing. Make the constraint explicit early, and the deal team gets to choose the sequence. Leave it implicit, and the sequence will be chosen for you—by outages, TSA extensions, and missed synergy quarters.