The Hidden Cost of Overlooking Tech in M&A: Lessons Learned

The Hidden Cost of Overlooking Tech in M&A: Lessons Learned

From the mid-90s to today, I’ve been on both sides of hundreds of technology assessments, audits, security reviews, and M&A activities. These 'due diligence' processes are rarely fun—they’re tedious, disruptive, and exhausting. But they are critical when approached with the right focus, at the right time, for the right reasons.

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One of the most financially impactful aspects of M&A—depending on the business—can be the state of the technology function in both the buyer and the seller.

Why Tech Due Diligence Matters

Typically, and understandably, the emphasis is placed solely on financials, while technology is treated as an afterthought. The result? Long-term technical debt, integration nightmares, frustrated teams (on both sides), and worst of all, missed synergies that could have driven value.

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I once witnessed a business acquiring another who failed to budget a single cent for network integration or merging Microsoft 365, which was not going to be a trivial exercise. The deal was already struggling from day one.

The Risks of Neglecting Tech in M&A

Without proper planning and budgeting for technology integration, you risk:

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- Operational chaos: Misaligned networks, tools, and systems.

- Data vulnerabilities: Increased exposure to breaches.

- Lost productivity: Disengaged teams trying to work in fragmented systems.

- Financial surprises: Unplanned costs that hit months—or years—after the deal closes.

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Trust me, no one wins when technology is ignored. Whether you’re buying or selling, the consequences are real and expensive.

Eyes Wide Open - The Smart Way to Approach Tech in M&A

Failing to take tech due diligence seriously—or ignoring its findings—can set you up for long-term failure. Yes, addressing these issues upfront may impact the buy or sell price, but it’s far better to plan for the costs than to pretend they don’t exist.

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Here’s the hard truth - systemic problems don’t get better with time.

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If technology is a core differentiator in the business, this becomes even more critical.

Lessons from the Trenches

Over the years, I’ve learned what to look for and how to prepare. The key takeaway? Prevention is always better than cure. From email and network integrations to strategic alignment of the technology functions, planning from day zero makes all the difference.

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Don’t let overlooked tech issues derail your deal. Success comes from a clear, informed plan that embraces reality—not wishful thinking.