Gartner Research

Tech Go-to-Market: Critical Success Factors for M&A (Part 2) — Algorithms and Methods for Informing Due Diligence

Published: 28 February 2017

ID: G00315659

Analyst(s): Lars Van Dam

Summary

M&A activity is at unprecedented levels, although aggregate success remains unsurprisingly low. Applying algorithms for analysis enables technology business unit leaders to unlock insights, identifying success factors and increasing the odds of deal value realization.

Table Of Contents

Introduction

Analysis

  • Current M&A Activity
  • Step 1 — Establish a Team With Blended Skills to Tackle the Art and Science of Due Diligence, Using the Deal Theory as a Starting Point
    • Alignment on Due Diligence Goals, Skills and Philosophy
  • Step 2 — Investigate Risks and Synergies Using a Specific Methodology That Starts With Deal Drivers and Integration Type
    • Deal Drivers
    • Prioritize Due Diligence Activities to Address the Most Critical Aspects
    • Track Estimated Probabilities of Synergies, Risks and Inhibitors
    • Lay the Groundwork for Successful Integration
    • Perspectives on Hidden Synergies and Contrarian Views
  • Step 3 — Apply Due Diligence Algorithms to Estimate Expected Outcomes and Determine Critical Success Factors
    • Example Usage of Gartner's Due Diligence Matrix
    • An Algorithm Informs Executive Decision Making
    • Algorithm Extension — Many Success Factors Depend on Others Working Out
    • Applying Data Science for More Accurate Due Diligence Algorithms
    • Artificial Intelligence for Objectivity, Speed and Incorporation of New Data
    • Range of Possible Outcomes and Success Factors for the Integration Phase
    • Synthesizing the Analysis and Telling the Story to the Deal Committee
    • Playbacks Before Meeting With the Deal Committee

Summary

Gartner Recommended Reading

©2020 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates. This publication may not be reproduced or distributed in any form without Gartner’s prior written permission. It consists of the opinions of Gartner’s research organization, which should not be construed as statements of fact. While the information contained in this publication has been obtained from sources believed to be reliable, Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner research may address legal and financial issues, Gartner does not provide legal or investment advice and its research should not be construed or used as such. Your access and use of this publication are governed by Gartner’s Usage Policy. Gartner prides itself on its reputation for independence and objectivity. Its research is produced independently by its research organization without input or influence from any third party. For further information, see Guiding Principles on Independence and Objectivity.

Already have a Gartner Account?

Become a client

Learn how to access this content as a Gartner client.