Architecting Mergers and Acquisitions: The Critical Role of Technology in M&A

At the highest levels of corporate strategies, mergers and acquisitions (M&A) empower companies to scale, adapt, and strengthen their market presence to deliver financial and operational objectives. Technology leaders, especially Enterprise Architects, have shifted from observers to key participants driving, evaluating, recommending and steering organisational integration.

Delivering an M&A is one of the most high-stakes technology roles. McKinsey advises that the average M&A deal for upper-mid to larger transactions (over $25M) was $440-650M in 2024 (excluding Megadeals over $10B). Risks include integration challenges, regulatory hurdles, cultural differences, unexpected costs and understated value.

A “parent” company recognises an opportunity – growth, market share, synergies, diversification, talent, product, economics, legal etc – and identifies a target company to meet this opportunity. Enterprise Architects provide a unique perspective and play a critical role in both supporting the Executive and Board in their Go/No Go decision for the acquisition, but also in architecting the integration, to fulfil the objectives of the merger.

This blog explores the end-to-end process of an M&A through the technological lens of Enterprise Architecture.

Confidential Due Diligence

Once an opportunity has been identified and an M&A leadership team is in place, the “due diligence” process commences. This involves a detailed discovery of the Target Company, to evaluate the risks, opportunities and costs associated with the M&A. The aim is to make a recommendation to proceed with the acquisition or not.

Anyone involved in the M&A must commit to a confidential approach, usually formalised under an NDA (non-disclosure agreement). Sensitive corporate information is shared and all parties must be respectful of the implications to customers, suppliers and employees, as well as shareholders, markets and regulations. Documentation is usually shared across a secure, controlled repository.

Through the due diligence process, the M&A team have the opportunity to engage with the Target Company’s leadership team to share information, understand decisions and explore areas of interest. Due diligence primarily audits finances, legal, commercial, operational, HR, Tax, ESG; however, with the intrinsic relationship between business and technology, technical due diligence is also non-negotiable.

As such, the M&A leadership team must include Technology specialists, most appropriately led by Enterprise Architects, with support from cyber specialists.

Technology Scope of the M&A

The deliverable product from the technical due diligence is a Red Flag Report. This provides a summary of the discovery, risks, costs, and recommendations.

This will consider the approach across:

• Technology Strategy: Vision and strategy of function, organisation role, governance, principles, roadmaps.

• IT Infrastructure: Hardware, networking, cloud usage, data centres, scalability, and reliability.

• Application & Systems Architecture: Review core applications, databases, integrations, custom and third-party solutions.

• Data Strategy and Management: How sensitive data is stored, processed, protected, and the company’s compliance with relevant data standards and regulations. How data is used for reporting, automation and AI posture.

• Cybersecurity: Security posture, compliance with regulations (such as GDPR, HIPAA), security protocols, encryption, and past incidents.

  • Network & Endpoint Testing - resilience and exposure of the target’s IT network infrastructure and devices

  • Software vulnerability scanning - Scanning for known vulnerabilities that could be exploited, unpatched systems, insecure dependencies, and outdated libraries

  • Threat intelligence – independent evaluations of threats and security posture, often including penetration testing.

• Technical Debt: Assessment of legacy systems, code quality, and overdue upgrades.

• Software Licensing & Intellectual Property: Validity of licenses, use of open-source components, software ownership, patent and trademark status, and any ongoing IP disputes.

• Governance & Processes: IT management and development processes, change management, DevOps practices, and technical roadmaps.

• Technology Operating Model: Skills and structure of the technical team, retention risks, key personnel, and cultural fit.

• Integration Complexity: How easily the target's technology stack can be integrated post-acquisition, and the potential costs.

• Budget, Spend, Projects: Analysis of technology budgets, capital vs. operating expenditures, vendor contracts, and cost optimisation opportunities.

Providing a Recommendation

Across the various areas that the Technology team must explore, M&A Targets differ significantly in their due diligence maturity and engagement. Navigating the organisation and process, the Enterprise Architect’s task is:

• Executive Engagement

• Information gathering

• Analysis and interpretation

• Summarise and present findings

  
  

A pragmatic approach is required, balancing between uncovering a level of technical detail to provide assurance and identifying the risk/opportunity in the Red Flag Report. Time, access and commercial sensitivities constrain the level of detail that can be explored. At this stage, the primary intent is to identify risks, not conduct a full technical analysis.

Consider the Future State

As early reports from different workstreams filter through, it becomes apparent whether the deal is realistic or not. Strategic, commercial, financial and legal stakeholders in the M&A leadership team will make recommendations based on the corporate alignment and future projections. While financial and legal leaders assess strategic alignment, the Red Flag Report exposes architectural realities – the technical considerations that shape post-deal operations.

The next step is to understand the world post-M&A. How will the businesses integrate? What will be the leadership structure? What are the key operating models? What are the future technology platforms? At this stage, the future state landscape is conceptual; however, recording the rationale behind early decisions can have significant implications at the point of implementation.

Quantifying the costs of integration

With a viewpoint around the future state landscape, the Enterprise Architect can identify the platforms, transformations and work packages that deliver the intended outcomes. This includes all activities to manage and mitigate risk, as well as provide an operable environment in the future state.

Private Equities seem to be increasingly interested in M&A to drive value through digital transformation, process optimisation and AI. From my experience developing business cases, this strategy can unlock a 30-50% growth; an opportunity that is actively being leveraged across both vertical and diversified portfolios.

Regardless of deal type, the Integration Roadmap and Budget, alongside the risks summary within the Red Flag Report, serve as an anchor for the Executive and Board’s decision making.

Once a decision has been made

Following a decision to progress the M&A, the corporate and legal team will seek to close the deal: finalising legal terms and conditions, regulatory filings, and preparing for the legal transfer of ownership (Day 0). Operational transition begins as defined as Day 1 activities. From a technological perspective, this closing phase leading up to Day 1, is a period to prepare for execution.

Maintaining business operations through the transition of ownership is imperative to achieving M&A objectives. Technology platforms, automated processes, identity & access, communication & collaboration tools must operate on Day 1. The Enterprise Architect is then responsible for presenting the solutions and transformations required for Day 1 operations and planning integration activity.

Technology Transition Tasks

Across the early days of ownership and operational transition, Enterprise Architects will deliver architecture and roadmaps, detailing the technology work packages required to enable critical capabilities, change operational processes due to the M&A, resolve issues raised in the Red Flag Report, and support a smooth transition.

I have often seen the following technology deliverables prioritised:

Solutions	Description	Timescale*
Due Diligence enablement	Secure document repository and communication channels to support the DD phase	M&A kick-off
Collaboration and Communication	Enable stakeholders across organisations to engage (e.g. email, Teams) and securely share documentation (e.g. SharePoint, identity & access management).	Pre-closing
Technology portfolio management	Analysis and architectural repository of the technology portfolio included within the M&A	Day 0
Transition Service Agreement (TSA)	Support arrangements in place for operational continuity (if operational solutions are not included in M&A, e.g. carve out)	Day 0
Cutover tasks	As identified: update system access, change email domains, transition user credentials, synchronise Active Directory/SSO, and security solutions.	Day 1
Network integrations and connectivity	Deliver connectivity requirements as identified	Day 1
Devices	Uplift or replace devices to ensure ongoing operations	Day 1
Technology operations and governance	Policy, governance and operational procedures are in place and communicated.	Day 1
Transition plan	Architecture and roadmaps to support technological transformations required for the integrated businesses to operate.	Post-Day 1
M365 data migrations	Migration of SharePoint/Teams and OneDrive accounts, updating licensing and policy.	Day 1 – Month 1
ERP, CRM, HCM	Business process alignment and platform migration, integrated reporting, and platform uplifts to meet business requirements	Week 1 –   6 months (approx.)
Cyber uplift	Identity management, endpoint protection, intrusion detection, SOC, resilience plans	6 months
Integrated portfolio management and transitions	Enable efficient and managed enterprise through decisions on keep, retire, and merge. Supporting change management.	6 months +
Decommissioning management	Depreciation of technology licensing and support contracts, data archiving and compliance management	6 months +
Operational integrations	Migrations, integrations and automations required to enable post-M&A (target state) operating model	12 months +
Harmonised data and insights	Integrated data models and reporting solutions for the Target State organisation	12 months +
Prepare for long-term technology and M&A goals	Address long-term goals for the organisation to maximise benefits and deliver the goals of the M&A.	12 months +

*Note, these timescales are illustrative towards priorities that I have seen; however, each M&A will work with timescales that meet business objectives, and these tasks are rarely “big bang” on a single day.

Delivery of the Technology Transformation

By this stage, the Enterprise Architect will have completed a robust level of analysis and architecture design, alongside transition planning, budget management, and programme mobilisation. At this point, the technology scope is akin to any other technology transformation – where technology, process, and operational changes need to be coordinated with stakeholders, to enable the defined target state.

The technology leadership team – including the executive owner (e.g. CIO/CTO), programme manager, and Enterprise Architect – must collaborate with domain owners, engineers, systems integrators, platform vendors and a host of other stakeholders to deliver the transformations.

Additionally, it should not be forgotten that the technology transformation occurs alongside a wider portfolio of change from the M&A. Legal, financial, HR, and corporate teams will be implementing changes – some requiring input from technology, others with major implications to the technology plans. Overall coordination of the M&A programme will take priority over specific technology tasks.  Regular reporting and reviewing of progress will be essential to ensure that the architectural blueprint reflects business priorities.

Conclusions

The M&A process is often quick and intensive with sensitivity on both sides: strategic and legal imperatives from the buying side are coupled with solutions, value and culture from the selling side. Decisions made throughout the M&A process can have significant ramifications to the future organisation and its operations.

In my experience, the M&A process is the ideal time for the technology leadership team to meet and understand the stakeholders’ needs; identify strategies and requirements for the business; and plan the integration requirements. It is also a great opportunity throughout this process for the leadership teams to meet, collaborate and bond to form successful partnerships for future engagement beyond the M&A activities.

TechArch2Ops recommended approach for the technology scope of the M&A ensures:

• Digital operating landscape of the M&A is considered, with strategic imperatives recognised

• Risks, opportunities have been identified and presented in the Red Flag Report

• The technology landscape is understood, and a broad, high-level analysis is captured

• Implications of the architecture are captured, supporting the M&A leadership team with a recommendation to proceed.

• Post-M&A target state organisation and strategy are identified

• Integration and transition tasks are scoped, budgeted and planned

• Readiness for business integration and achieving the M&A strategic targets.

By defining a clear technology scope and achieving acceptance criteria, technology has been fully considered and managed through the M&A. Yet, from an organisational point of view, this is where the work really starts – delivering seamless business integrations, enabling better value for customers, and operating in a new business model. Technology leadership is the engine that powers this journey, supporting the M&A from Architecture to Operations.