Would you make a business decision if it had less than a 50/50 chance of success? That’s the reality of mergers and acquisitions. A decade-long study ending in 2022 found that only 43% of deals succeeded in creating shareholder value. Companies outperformed peers by 13% total shareholder value (TSR) leading up to the deal and actually lost 7% in the two years that followed.
It’s an intricate dance that Tangoe knows well (we celebrated our own successful merger with MOBI in 2021), and one where we work closely with companies to master a particularly tricky step: IT cost management. Whether it’s a merger, acquisition, or divestiture, technology costs multiply in the background across mobility, cloud, and telecom. IT expense management (ITEM), also known as Technology Expense Management (TEM), is essential for preventing cost spirals and surfacing savings that make the deal even stronger.
The organizations we work with beat the odds – and you can, too. This playbook explores the financial synergies at stake, the biggest IT leaks draining value, and exactly how to stack the numbers in your favor.
How IT Waste Derails the Payoff You Expect
Leaders expect three big outcomes from a deal: savings, growth, and strength. Here’s how those synergies play out, and how IT expense management keeps them on track.
Cost synergies
This is the first thing most executives look for (and their No. 1 concern, according to Deloitte). When two businesses come together, there’s usually overlap. With divestitures, the challenge is separating cleanly. Without deep visibility into IT costs, both scenarios stall. This is where ITEM shines brightest: transforming data into visibility and control so you can identify and eliminate waste, start consolidating vendors, better negotiate rates, and more.
Revenue synergies
When two businesses merge, the opportunity is to sell more together than they could separately. With divestitures, each entity relies on clean system separation to keep revenue flowing. ITEM plays an indirect (albeit still important) role by removing the IT barriers preventing revenue growth: consolidating systems faster, breaking down data silos, and ensuring technology supports momentum instead of slowing it down.
Capital synergies
In a merger or acquisition, two new companies work to free up capital that was previously tied down. In a divestiture, the divested unit works to stand on its own financially. IT is one of the leakiest areas, which is why ITEM plays a huge role in whether dollars materialize or slip away.
Costs to Inspect Across Your Technology Ecosystem
Mobility: Devices, Carriers, and Rate Plans Grow Overnight
Mergers create duplicate devices and carriers while divestitures create contract entanglements. Without deep visibility into usage and costs, mobility spend slips into the abyss. So where do you start? Inventory management.
- Aggregate all data. Create a comprehensive list of every detail tied to every device to bring all mobile services and assets into a known state. If you need help, Tangoe breaks down mobile inventorying step by step with all the details you need to account for in this guide.
- Flag duplicates. This single source of truth gives you the visibility that sparks those “aha” moments: redundancies that need to be cut, what needs to move with the divested unit, etc.
- Track ownership. The scope of info is massive, and you can’t afford to have anything floating around without someone responsible for it. Each area needs a clearly defined owner or group.
- Match to contracts. Compare every device and line against carrier invoices to spot gaps, overlaps, or charges that don’t belong.
Without a continuous approach, none of the steps above matter. New devices, contracts, and users creep in the moment you look away. To keep every device and dollar accounted for, your inventory has to be treated like a living system – one that’s updated in real-time versus a spreadsheet you set and forget.
Cloud: SaaS Overlap, Shadow IT, and Redundant Contracts
Companies already waste roughly 30% of cloud resources. During a merger or acquisition, that number can easily double or triple. It’s no walk in the park for parent companies, either.
In M&As, it’s about spotting redundant apps, overlapping infrastructure, and consolidation opportunities before renewals lock in. In divestitures, it’s about separating licenses and costs cleanly so neither side is on the hook for what it doesn’t use.
IT expense management delivers the visibility needed in both scenarios.
A platform like Tangoe One creates a real-time, connected view of usage, contracts, and spend across the entire cloud estate. You’ll see exactly what’s happening across your cloud environment during the transition so you can match usage to contracts, decide which tools win, build a unified renewal calendar, and ensure the new environment is cleanly separated.
Tangoe One goes further by using AI and automation to take finance and IT teams out of the trenches of manual work.
The system proactively alerts designated leaders to renewals, tracks cloud costs in real-time, and even offers intelligent cost savings recommendations based on data insights. This is a game-changer, especially when it’s all hands-on deck during a major transition.
Another thing to keep in mind is AI. Nearly every company is using it, but few are tracking usage and spend with the rigor it demands. It shows up on the cloud bill, but it behaves very differently from traditional cloud services. Tangoe outlines the key differences to look for and seven steps to keep AI costs from spiraling in this guide.
Telecom: Don’t Get Stuck Paying for Redundant Services
Telecom may not grab headlines, but overlooking it can cost millions. In mergers, you inherit two sets of voice, data, and network contracts that rarely line up. In divestitures, the common theme continues: shared circuits and services don’t divide cleanly, leaving one side paying for what the other side still uses.
Here’s what to do.
- Map every service. Build a single, clean inventory that ties each circuit/line item to a real place and a real owner.
- Identify redundancy. Find any services that are overlapping or unnecessary.
- Check contract terms. Terms dictate when you can consolidate without penalties and how you can legally move or assign services. It’s where avoidable costs hide, and providers are counting on you missing the fine print. Double check term dates, auto-renew windows, early termination fees, minimum revenue/spend commitments, porting/assignment rights, and notice periods.
- Renegotiate contracts: In the case of M&As, use your new scale to negotiate with fewer providers at better rates. For divestitures, work to unwind existing commitments so each side isn’t paying for capacity it no longer needs.
Without a clear inventory, contracts with staggered end dates can keep you locked into redundant services for years. You can refer to the same guide we linked above for step-by-step guidance on inventorying telecom assets.
How Tangoe Secures Deal Synergies & Savings
- AI-powered automation: From service mapping and invoice reconciliation to inventory syncing and cost tracking, Tangoe One automates at every turn and provides a single pane view of spend, usage, and ownership across mobility, cloud, and telecom. It’s how we turn technology expense management into a strategic lever, helping companies bring clarity to complex transitions and maintain control long after the deal is done.
- Experts who support you: From deciding which systems stay or go to contract negotiation, Tangoe’s team of 60+ ITEM experts have guided hundreds of mergers and divestitures and save companies +$250M each year. Learn more about Tangoe’s technology consulting and advisory services.
- A FinOps-certified platform: Tangoe One is FinOps-certified, meaning it meets the FinOps Foundation’s standards for visibility, accountability, and optimization of cloud costs – including governing AI spend (a quickly growing financial challenge). The platform extends those same principles to mobility and telecom, providing a proven, unified system for managing the financial side of IT end-to-end. See how Tangoe doubles cloud savings potential in line with FinOps.
- One platform for all IT expenses: A single, streamlined view of mobility, cloud, and telecom provide complete IT clarity when you need it most. An instant, unified picture of spend, usage, and ownership allow for fast, confident decisions that keep integrations and separations on track.
- Real-time visibility: Proactivity is the name of the game. Tangoe supports thousands of integrations and deep cloud data ingestion, turning fragmented data into real-time insights you can act on to continuously optimize, save, and keep deal value strong.
In the high-stakes world of mergers, acquisitions, and divestitures, we’ve seen firsthand how IT costs can make or break the deal. Talk to Tangoe about making IT costs one less thing to worry about.