The SaaS Tool Consolidation Checklist for Mergers and Acquisitions

In today's fast-paced business world, mergers and acquisitions (M&A) are common occurrences. One of the most critical aspects of these processes is the consolidation of SaaS tools between the merging companies. Both organizations often have overlapping software solutions, redundant licenses, and varying levels of adoption. A structured approach to SaaS tool consolidation ensures a seamless transition, cost savings, and optimal efficiency. In this article, we’ll outline a strategic approach to SaaS tool consolidation and provide a comprehensive checklist for companies undergoing mergers and acquisitions (M&A) and commercial due diligence (CDD).

Why Tool Consolidation Matters

Tool consolidation is crucial both for the seller and the acquirer for several reasons:

Cost Optimization: Eliminating redundant tools can significantly lower software expenses.

Operational Efficiency: Unify systems and centralize data to streamline workflows and reduce duplicate work.

Security & Compliance: Ensure compliance with industry regulations and improve cybersecurity posture.

User Experience & Collaboration: Standardize software usage across teams to reduce friction for employees.

The SaaS Tool Consolidation Checklist

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Free template:

To help you streamline your SaaS tool consolidation process, we’ve created a Google Sheets template that allows you to track every step of this checklist. This template makes it easy to document redundancies, compare costs, track contract renewals, and ensure a smooth transition. You can customize it to fit your company’s needs and collaborate with your team in real time.

✅ 1. Create a list of all SaaS tools used across both companies.

To audit the existing SaaS stack of both companies, first gather a complete list of SaaS tools used by both companies.

Gather insights on tool usage, licensing, and ownership.

Shadow IT: Also identify unauthorized tools that employees use outside of official IT procurement.

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Pro tip: With a SaaS Tool Insights platform like beams, you can generate such a list automatically in 1 minute.

✅ 2. Evaluate Business Needs to Define a Unified SaaS strategy.

Identify key business functions of the newly merged company and map their SaaS requirements.

Determine must-have tool categories, tools and features vs. nice-to-have functionalities.

Factor in future growth, scalability, and long-term business objectives.

✅ 3. Analyze usage and redundancies in the SaaS stack.

Identify duplicate tools or tools with overlapping functionalities.

Evaluate user adoption, effectiveness, and dependencies of each tool. Potentially gather feedback from key users on usability and performance.

Identify tools with low adoption or underutilized features that may not justify their cost.

✅ 4. Review contracts, renewals, and costs.

Review subscription costs, contract terms, and renewal dates.

Identify opportunities for cost savings through terminating unnecessary licenses and consolidating contracts.

Where possible, negotiate with vendors for better pricing based on volume.

✅ 5. Evaluate security, compliance, and data privacy policies.

Ensure all tools comply with industry regulations (GDPR, SOC2, ISO 27001, HIPAA).

Evaluate encryption, authentication, and data residency requirements.

Identify potential security risks when consolidating tools or migrating data.

✅ 6. Assess integrations and compatibility with business systems.

Ensure seamless integration with core platforms (ERP, CRM, HRIS, BI tools, etc.).

Identify potential API or data migration challenges.

Prioritize tools that enhance interoperability and automation capabilities.

✅ 7. Finalize tool selection & decommission unnecessary tools

Decide which tools to keep, consolidate, or replace based on findings from previous steps (based on business needs, user adoption, cost, and integration capabilities)

Cancel redundant contracts and update vendor agreements.

✅ 8. Develop a transition and migration plan.

Define a phased migration plan with clear milestones and realistic deadlines.

Establish data migration and offboarding processes before decommissioning tools to ensure integrity and avoid data loss.

Engage with vendors early to ensure smooth transitions, including API access for migration and training resources for employees.

✅ 9. Communicate changes to all stakeholders.

Develop a clear communication plan for employees, leadership, and vendors.

Provide guidance on how changes will impact workflows and responsibilities.

Ensure leadership support for adoption and change management.

✅ 10. Train employees on new tools and processes.

Provide training and onboarding for new tools.

Define tool owners or champions responsible for ongoing enablement.

Create self-service knowledge bases and FAQs for common issues.

✅ 11. Monitor adoption and make adjustments as needed.

Track user adoption, performance, and ROI of the consolidated tech stack.

Gather feedback and iterate on improvements.

Set up regular audits to ensure the SaaS stack remains efficient and cost-effective.

Conclusion

SaaS tool consolidation is a crucial part of any M&A and due diligence process. By taking a structured approach and following this checklist and adhering to best practices, companies can create a more efficient, cost-effective, and collaborative work environment. Remember, the goal is not just to reduce the number of tools, but to create a cohesive ecosystem that drives business growth and innovation.

For deeper insights and analytics on your SaaS stack during an M&A process, consider leveraging a SaaS tool usage insights platform to streamline decision-making and maximize efficiency.

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Free template: