Excel's Collaboration Limitations Are Hurting Your M&A Deals

Many organizations view M&A as a pivotal element of their inorganic growth, implementing the practice to expand operations, improve product offerings, boost competitiveness, acquire talent, and capture market share. The industry is ripe for change and innovation, yet despite M&A’s strategic focus, many companies still use outdated, status-quo tools like Excel for deal lifecycle management.

Functional leads, corporate development, and integration teams need an M&A platform that supports continuous updates and seamless collaboration throughout the transaction lifecycle. Such a tool must allow for real-time data insights, sharing, and planning, making it easier for teams to align, respond to changes, maintain momentum, and close deals successfully.

The Limitations of Excel Spreadsheets

Excel was not purpose-built for M&A, which is inherently complex and requires extensive team coordination. Its inadequate features fail to enhance communication, secure data, identify risks, streamline processes, prevent delays, and meet other deal demands.

Below are a few ways Excel's limitations disrupt communication and workflows, increase the likelihood of human errors, slow deal progress, and complicate decision-making.

1. Design Limitations

Many businesses still consider spreadsheets the standard tool for M&A deal management, but this perception is outdated. Excel has not kept pace with M&A’s evolving needs. Excel’s features are not M&A-optimized, reducing team effectiveness in basic deal operations like due diligence, risk mitigation, integration planning, synergy tracking, and BI reporting. Consequently, this forces employees to create manual processes and workarounds, causing time inefficiencies and increasing the risk of errors. For example:

Excel is not designed to efficiently manage and display the large datasets often involved in M&A transactions.
Excel cannot provide a detailed audit trail for changes made to documents, and files can be easily shared and copied, raising concerns about accuracy and confidentiality.
Narrow integration features make it harder to merge financial, operational, and HR data from disparate sources.
Excel’s basic charting and graphing capabilities are inferior to the sophisticated graphics and reporting capabilities available in specialized BI tools.
Formula errors can lead to inaccurate data analysis, affecting the ability to communicate insights, track deal performance, and generate reports for key stakeholders.

‍2. Messaging Delays

Real-time collaboration is paramount in M&A to quickly address issues, make informed decisions, and sustain deal momentum. The absence of instant notifications when team members make changes in Excel creates communication gaps among stakeholders. This deficiency can significantly slow deal progress as managers are unaware of critical updates or required actions, resulting in missed objectives and an increased risk of deal failure.

3. Version Control Issues

Excel relies heavily on manual, cumbersome data entry that is prone to errors. Consolidating data from multiple spreadsheets, workbooks, and other disparate applications may scatter files and other team communications. Additionally, multiple document versions can exist simultaneously with Excel, making tracking changes and updates difficult. This fragmentation interferes with visibility as there isn’t a single source of truth.

Decentralization contributes to miscommunications, duplicated efforts, and information gaps, jeopardizing the deal's integrity. In an M&A deal, having a single location for data and document storage is essential to ensure all team members can access the most current information.

4. Data Inconsistencies

When multiple team members attempt to update a spreadsheet concurrently, conflicts may emerge, as the overlapping edits can result in overwritten or lost information. Resolving these data discrepancies requires time-consuming reconciliations to maintain accuracy. In the fast-paced environment of M&A, this can lead to flawed analyses and determinations, threatening the entire transaction.

The Advantages of the DealRoom M&A Optimization Platform

DealRoom is a powerful, comprehensive M&A software and Excel alternative that enables effortless coordination throughout the deal lifecycle. The M&A Optimization Platform delivers an end-to-end solution to optimize deal execution and accelerate synergy realization. DealRoom's key benefits for better team collaboration and M&A project management include:

1. Improved Data Accessibility

DealRoom consolidates all deal-related information into a secure pipeline to enhance accessibility. Without the confusion of multiple tools, sources, or file versions, teams will always have access to the most up-to-date information. In addition, DealRoom simplifies data retrieval, empowering stakeholders to act swiftly on opportunities, address challenges, and make timely, well-informed decisions.‍

2. Increased Data Security

DealRoom strengthens data security with robust user permissions and controls. Administrators can regulate access to specific data and set permissions for editing or viewing information, decreasing the likelihood of unauthorized access or data breaches. With stringent authority over document storage, user roles, and permissions, DealRoom mitigates version control conflicts and upholds the integrity and confidentiality of all data.

3. Enhanced Collaboration

With advanced features like automated alerts, tagging, and real-time update synchronization, DealRoom facilitates effective deal coordination. These capabilities boost collaboration and encourage teamwork by keeping everyone informed and aligned as stakeholders assign or complete tasks in real time. DealRoom empowers teams to stay agile, productive, and responsive as they advance through each deal phase.

4. Integrated Communication Tools

DealRoom can integrate communication tools like Microsoft Outlook and Slack within its system to optimize pipeline visibility and collaboration. By incorporating these plug-in features into the platform, DealRoom creates a unified space to share documents, track email attachments or discussions, and deliver task updates. This minimizes communication gaps and boosts transparency, ensuring consistent contact throughout the transaction.

5. Advanced BI Reporting

DealRoom offers cutting-edge synergy tracking and BI reporting capabilities that deliver valuable insights into pipeline performance. By automating data capture and analysis, DealRoom eliminates the need for manual report creation and distribution. This enables stakeholders to monitor synergy realization progress, identify potential bottlenecks, and make timely, data-driven decisions with DealRoom’s real-time insights and findings. Teams can optimize their resources, prioritize tasks, and maximize efficiency in reaching their original deal objectives.

6. Continuous Innovation

Unlike Excel, DealRoom is continuously updated to meet user demands and anticipate future trends. Customer feedback is integral to its optimization process, and DealRoom can even customize certain features and templates to suit specific business needs.

Insights from M&A Teams Who Ditched Excel

"I wouldn't go back to spreadsheets. I don't know how we would manage deals without DealRoom." – Jason Thomas, CEO of Raincatcher

Like many M&A firms, Raincatcher struggled to manage its data rooms through spreadsheets and email. Operating across multiple tools and platforms slowed operations and increased the possibility of mistakes. Additionally, communications splintered as manually tracking documents and responses during due diligence interfered with the firm's efficiency, and security concerns arose, highlighting a need for individualized access and permissions.

Recognizing these disparities, they sought a platform to serve as their single source of truth and streamline their M&A operations. They found DealRoom to be among the few capable of managing the complexities of the complete deal lifecycle, with data room storage, centralized communications, enhanced security, pipeline tracking, customer support, and more.

“DealRoom makes it so easy to collaborate.” – Nicole Markowski, Manager and Corporate Development at Wipfli LLP.

The Wipfli team struggled to work cross-functionally as there was no standardized project management tool across all its departments, resulting in poor visibility around deal tasks. Wipfli relied on Excel to track prospects and ShareFile for task management, which created obstacles in retrieving specific documents and gave little foresight into assignments coming down the pipeline. Executing multiple deals per year, a change was needed to streamline functions for greater efficiency.

After experimenting with solutions, DealRoom appealed to the Wipfli team as the most user-friendly option, offering the necessary features to ensure optimal deal success. The platform improved reporting and task management transparency, simplifying the process and allowing more time for proactive deal sourcing.

Final Thoughts

Real-time collaboration is vital in M&A to keep teams aligned, make informed decisions, and drive deal success. Excel may be the standard M&A collaboration tool, but its limitations restrict team coordination and operational performance, causing important deal details to be overlooked.

DealRoom offers a robust, end-to-end M&A Optimization Platform that addresses these drawbacks by delivering enhanced collaboration features, robust data protection, and task management capabilities. By adopting the platform, your team can move beyond Excel's inadequate features to streamline your M&A strategy, enhance teamwork, and improve overall efficiency throughout the transaction lifecycle.

Ready to transform your M&A processes? Schedule a demo today and experience the benefits of DealRoom’s M&A Optimization Platform.