WRAL Tech Wire

Cutting Edge Study Documents M&A Cost Savings Through Tech Integration

A new study by Cutting Edge Information shows that a first year cost savings of 30-50 percent can be achieved through "clearly implemented" IT integration.

When IT integration exceeds the time expected, the study finds that overlapping costs erode the merger's originally promised earning potential. A clear-cut IT plan is essential for any M&A initiative, the firm concludes in its report.

According to Cutting Edge, companies that are cognizant of the potential cost damages IT can create on M&A initiatives, while focusing on speed and reliability can maximize their earnings.

The 138-page report, "Accelerate M&A Success: A Guide to Post-Merger Integration," contains more than 250 metrics and features practices from more than 80 companies, including Pfizer, HP, Cisco, IBM, GE and Exxon-Mobil. It overviews five key success factors to help guide M&A deals.

"Many mergers and acquisitions in recent years have been a huge failure," says Cutting Edge CEO Jason Richardson. "Too often, consolidating companies have only focused on how their financials match up, and neglect to inspect all other crucial aspects."

The report also includes a due diligence checklist to help guide M&A deals. The checklist helps companies in understand their target, the industry and potential partnerships that may exist after an M&A deal, Cutting Edge says.

The metrics and practices showcased in the report are in the areas such as corporate goals and needs, prospective partners, due diligence, deal closing, technology integration, and sales and marketing.

Cutting Edge: www.cuttingedgeinfo.com