7th February 2025

We're continuing to observe massive consolidation across the Technology Service Provider (TSP) landscape, which shows no signs of slowing down in the year ahead.

If you're a TSP with inorganic growth plans for 2025, you’ll likely grapple with a few common challenges. These are our top 5 and our view on how to overcome them.

M&A may be fundamental to a buy-and-build growth strategy or simply an opportunistic move when you come across the right 'fit'. Whatever your strategic intent, it can play havoc operationally, particularly in the immediate post-transaction phase. Costs can quickly spiral, but most importantly, it slows you down.

In periods of intense change, few things become more crucial than speed. You need to integrate and establish control quickly, proactively drive growth and efficiencies at pace, and then sustain that control in preparation for the next. Quick decisions amidst a period of chaos.

What can slow you down?

1 – Data & Tech Stack Integration

Integrating disparate IT systems, data platforms, and cybersecurity protocols is a non-trivial activity often underestimated in M&A planning, holding back the realisation of value.

This is not about getting everything done quickly, it’s about establishing control quickly. Leaders need the big picture – visibility across the whole – from which to execute a top-down and structured technical integration through time.

2 - Portfolio Rationalisation

This varies greatly with scale, but the consolidation of offerings from different businesses is never neat and tidy. We see overlapping service catalogues, conflicting SLAs, misaligned expertise, for example, so the objective is to get on top of this quickly.

Prioritise growth momentum and base portfolio decisions on optimising the top line. Drive an aggressive cross-sell plan to evaluate high-performing and highly complementing services and identify what offerings are redundant or incompatible. Rationalisation decisions are then grounded by strategic evidence.

3 - Customer Retention and Experience

This is a time of substantial internal change and disruption, which inevitably increases the risk of customer impact. Either the basics of PR and communications are executed badly, or the quality of delivery and relationships dip. It’s the latter that ultimately translates into churn or inhibits growth.

Now is the time to double down on customer success. Focus on minimising disruption to service delivery and strengthening customer relationships. Navigating a merger seamlessly in the eyes of existing customers will protect revenue and lay the path for successful cross-sell growth.

4 – Cost Synergy Realisation

Any M&A business case will assume cost benefits when bringing two businesses together. It’s not uncommon, in order to bolster the deal economics, to see those overestimated. This places extra pressure on leadership to act quickly in realising demonstrable efficiencies and savings.

Implement disciplined cost management, focusing first on the areas offering the most synergy potential, such as general and administrative expenses. Thereafter, you’ll need clarity on how costs translate to business value, enabling you to sustain financial health but also justify investment for growth.

5 – Cultural Integration

Successfully merging teams and values is vital to avoid resistance, misalignment, and employee turnover, which can all erode operational efficiency and get in the way of value creation.

Ensure clear communication and proactive engagement throughout the integration period. The change management process matters – measure and track it like any top priority project, with the objective of preserving company culture and retaining top talent.  

Boost M&A Value Creation with Decision Intelligence

M&A remains a crucial strategy for TSPs to drive value creation and stay competitive. Provided the numbers work, it's an effective way to build new capability and expand reach.

The challenge is realising the opportunities in the fastest and most cost-efficient way – made possible by leveraging the right technology. Quickly establish control, streamline and accelerate post-merge integration, save precious time and money, and create a platform from which future high-stakes decisions can be made.

To find out how decision intelligence can supercharge your growth journey, talk to one of our experts today.