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IT Due Diligence Is Fundamental for Post-Merger Synergy

Ignorance is not bliss


Mergers and Acquisitions (M&A) are all about synergy – whether cost savings or strategy support – and information technology (IT) can be instrumental in achieving this. A recent Deloitte study of 31 companies that had participated in significant M&A activity over the last year suggests:

  1. Synergy correlates strongly with the financial success of a merger.
  2. When IT is part of the due diligence process, it has a direct correlation with post-deal synergies.

Mark A. Walsh and Asish Ramchandran, principals with Deloitte Consulting LLP, in their latest point of view, "Ignorance is not bliss – IT due diligence is fundamental for post-merger synergy," discuss why IT due diligence is elemental for post-merger synergy. It prompts the early identification of potential synergies, empowers business executives to take advantage of the important role IT plays in realizing these synergies and supports the collaboration of business leadership and IT in determining an effective integration strategy. Without IT due diligence, certain risks — such as integration barriers, long lead times, deal-breaking costs and contract noncompliance — are not likely to be identified.

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