The Dangers of Relying on Spreadsheets for M&A Project Management

M&A is a team sport requiring precision, clarity and collaboration - all of which are difficult to achieve when teams rely on spreadsheets. Without real-time visibility into project progress, decision making can't keep pace with the fast-changing nature of an M&A transaction. This leads to communication breakdowns that put success at risk. Surely a better solution is needed when so much is at stake.  

Without immediate visibility into the important details of an M&A deal, teams risk being left in the dark. Unreported progress or missed deadlines can lead to major confusion and errors that may cost a team dearly. Spreadsheets are often inadequate for real-time tracking too - they don't offer enough oversight to spot red flags and keep everyone on track.

Excel was released in 1985. If you’ve not watched the release advert you really should – it’s four minutes well spent. Humour aside, there are numerous reasons why spreadsheet solutions such as Excel are no longer suitable when it comes to managing M&A deals. 

Lack of real-time visibility causing team members to work with outdated information

One of the major drawbacks of using spreadsheets for M&A project management is the lack of real-time visibility. Without this feature, team members may not be aware of changes made by others in the same document, leading them to work with outdated information. Or,  team members may be working on the same part of a project without realising it, leading to duplicated efforts. As a result, valuable time and resources are wasted, leading to delays – potentially impacting the success of the M&A deal. Additionally, since team members may be working with different versions of the same document, it can be challenging to reconcile the data and make informed, data-driven decisions.

Missed opportunities due to last-minute scrambling to meet deadlines

It can be extremely difficult to keep track of deadlines and to monitor progress when using spreadsheets for M&A project management. This can lead to missed opportunities and last-minute scrambling to meet deadlines. Teams may find themselves rushing to complete tasks at the last minute or even missing important milestones because they lack a clear view of what is needed to be done and when. And then there is the issue of spending hours copying Excel charts into PowerPoint. Sound familiar?! If so, see here. 

Inconsistent formatting leading to errors and misinterpretation of data

The use of spreadsheets for managing M&A deals can result in inconsistent formatting, which can lead to errors and misinterpretation of data. Spreadsheets are often prone to manual errors such as incorrect formulas, incorrect data entry and incorrect formatting. This can cause confusion and misunderstandings, especially if different team members are responsible for different sections of the spreadsheet. Additionally, spreadsheets can be challenging to maintain and update over time, especially as more data is added by different team members. 

Limited collaboration capabilities, hindering teamwork and communication

The limited collaboration capabilities of spreadsheets can significantly hinder teamwork and communication. Team members may be working on their own versions of the spreadsheet and lack a centralised location to access the most up-to-date information. Furthermore, spreadsheets lack many of the key features needed for successful project tracking and management, including project dependencies, a built-in RAID log and the ability to attach documents to tasks, etc. 

Inadequate security measures, exposing sensitive information to potential breaches

The use of spreadsheets for M&A management also comes with inadequate security measures, which can lead to highly sensitive information being exposed to potential data breaches. This is a major concern for organisations handling confidential information such as financial data, trade secrets and personal information. Spreadsheets are not designed with enterprise-level security in mind, and the lack of control over who has access to the data, sharing passwords, as well as the ease of copying and sharing the information, can increase the risk of data theft or unauthorised access. This can have serious consequences for organisations and individuals working within M&A, including loss of reputation, financial damage and legal penalties. It's therefore crucial to have proper security measures in place when dealing with sensitive information, which is why an increasing number of organisations are upgrading to a dedicated M&A platform with robust security features such as bank grade security and ISO 27001 certification.

Limited scalability, making it difficult to manage larger deals and multiple stakeholders 

Spreadsheets are a widely used tool for data management and analysis, but their limited scalability can pose a challenge for managing larger deals and those involving multiple stakeholders.

As the size and complexity of a project increase, the manual nature of spreadsheet data management becomes exponentially more cumbersome and prone to errors.

The lack of robust collaboration and organisation features makes it difficult to keep track of multiple versions, assign tasks, and share updates with all parties involved. These limitations can impact the overall efficiency and accuracy of decision-making, making it challenging to scale the use of spreadsheets for larger deals.

So, what’s the alternative to spreadsheets for M&A project management?  

A better option for M&A project management is to use a dedicated M&A platform such as Navima. Navima was designed specifically to help M&A teams collaborate and stay organised.

Here a few reasons to consider Navima:

• See all the moving parts of an M&A deal in one place, making it easy to stay on top of deadlines, track progress, and make updates as needed.
• Real-time visibility into who is making changes and when, allowing team members to work together more effectively and stay on top of updates via real-time dashboards and reports.
• Assign roles and create a workflow structure, so everyone knows what they should be working on and when. This helps to prevent confusion and ensure everyone is working towards the same goal.
• Track key elements such as due dates, status, and priority.
• Set dependencies and switch between multiple M&A projects easily.

Takeaway

Spreadsheets are a convenient option for tracking basic tasks (I use Excel for my all manner of daily admin lists) but they don't offer the key features that are essential for successful M&A project management. And while spreadsheets have their place in certain situations – for instance, they can be great for keeping track of figures and for financial models, etc., – they lack the context and organisational discipline that dedicated M&A software provides.

Here’s a summary of why you need to up your game and move off spreadsheets:

• Lack of real-time visibility causing team members to work with outdated information
• Missed opportunities due to last-minute scrambling to meet deadlines
• Inconsistent formatting leading to errors and misinterpretation of data
• Limited collaboration capabilities, hindering teamwork and communication
• Inadequate security measures, exposing sensitive information to potential breaches
• Limited scalability, making it difficult to manage larger deals and multiple stakeholders

Oh, and Excel was released in 1985.

About the Author

Tom is the CEO of Navima. Prior to Navima, Tom worked at 2 M&A boutiques (leading acquisitions, divestments, strategy and venture projects) and was Head of M&A & Corporate Development for a fast-growth, VC backed SaaS company. Tom has supported companies around the world including Shell, Unilever, Philips and the Big Four with improving their M&A process and leading the development of playbooks.