Opening Paragraph:

In most healthcare mergers, IT is treated like office furniture: necessary, expensive, and ultimately negotiable. It’s assigned a number on a spreadsheet, buried under real estate, labor, and legal fees. But that mindset is more than outdated—it’s dangerous. The failure to treat IT as a strategic investment is one of the primary reasons so many post-merger integrations stall, bleed money, or outright fail. In an industry where every second of downtime affects patient care, and every breach risks millions in penalties, IT should not be budgeted as overhead—it should be prioritized as infrastructure.

The Misconception: IT as a Cost Center

Historically, healthcare organizations have underinvested in IT. Even in high-performing systems, IT budgets average just 3 to 5 percent of overall operating costs, compared to 7 percent or more in other industries with similar regulatory complexity (Gartner, 2022). During a merger, when leaders are looking to cut redundancies and protect margins, IT is often first on the chopping block.

But this view fails to account for the role IT plays in:

• Enabling seamless clinical operations
• Ensuring security and compliance
• Reducing overhead through automation
• Supporting long-term growth through interoperability

When IT is seen only as an expense, organizations end up with fragmented systems, duplicate licensing, and integration delays—each of which carries hidden costs and long-term consequences.

1. Strategic IT Planning Prevents Post-Merger Chaos

According to KPMG, healthcare organizations lose between $300,000 and $500,000 per month in
unrealized synergies when IT integration is delayed (KPMG, 2021). That includes costs associated with

According to KPMG, healthcare organizations lose between $300,000 and $500,000 per month in unrealized synergies when IT integration is delayed (KPMG, 2021). That includes costs associated with:

• Maintaining duplicate infrastructure
• Staffing parallel support teams
• Slower operational consolidation
• Delayed ROI from the merger

A merger is not the time to underinvest. It is the time to architect the digital future of the combined entity. Organizations that prioritize IT planning early dramatically reduce transition costs and shorten time-to-value.

2. Centralized IT Unlocks Efficiency at Scale

One of the most immediate benefits of treating IT as an investment is operational efficiency. A unified, well-funded IT strategy can reduce costs across departments through:

• Automated provisioning and deprovisioning
• Standardized identity and access management (IAM)
• Consolidated infrastructure and licensing agreements
• Reduced help desk ticket volume

For example, organizations that adopt modern IAM platforms with self-service password reset capabilities can reduce help desk call volume by 20 to 30 percent, saving $70 per employee per year in support costs (Okta, 2022).

Centralizing systems like Active Directory (AD) not only streamlines access control but also reduces server load, licensing duplication, and maintenance overhead. Gartner reports that consolidated identity platforms reduce IT operational costs by up to 25 percent in the first year post-merger (Gartner, 2022).

3. Better IT = Better Security and Compliance

Cybersecurity is not just a cost of doing business—it’s a cost multiplier when ignored. Healthcare remains the most expensive industry for data breaches, with an average cost of $10.93 million per incident (IBM, 2023). Fragmented systems increase the number of attack vectors, orphaned accounts, and misaligned policies.

When identity governance is poorly managed, breaches are not only more likely—they’re harder to detect and more expensive to contain.

A well-funded IT strategy during M&A ensures:

• Consistent role-based access control
• Automated deprovisioning of former employees
• Centralized auditing and logging
• Modern multi-factor authentication (MFA)

These capabilities drastically reduce security risk and simplify compliance with HIPAA, HITRUST, and GDPR standards.

Organizations with mature IAM and security frameworks experience 60 percent fewer identity-related incidents and reduce breach response costs by over $1 million (Ponemon Institute, 2023).

4. IT Investment Accelerates Workforce Integration

Most healthcare M&A plans emphasize clinical integration and cultural alignment. But without the right technology in place, even the best people and processes falter.

Identity delays can prevent new team members from accessing critical systems, while inconsistent workflows cause operational drag. A centralized IT strategy speeds up:

• Onboarding of clinical and administrative staff
• Access to critical platforms (EHRs, scheduling, imaging)
• Unified communications and collaboration tools
• Training and policy standardization

Speed matters. The sooner people are fully integrated into shared systems, the sooner your new organization can operate as one.

5. The Real ROI of IT in M&A: Speed, Safety, and Scalability

When viewed through the right lens, IT offers not just savings—but multipliers.

• Every dollar spent consolidating identity and access reduces long-term licensing, staffing, and compliance costs.
• Every integration decision made during M&A sets the tone for how future growth is managed.
• Every system consolidated today becomes a foundation for scalable expansion tomorrow.

IDC research shows that healthcare organizations with centralized IT governance see 30 to 40 percent faster integration timelines post-merger, enabling them to recognize ROI from M&A activity sooner and more fully (IDC, 2023).

When IT is budgeted as a cost, it becomes a constraint. When IT is funded as a strategy, it becomes a catalyst.

Conclusion: The IT Budget Isn’t Overhead. It’s Infrastructure.

In healthcare M&A, IT is often the last to be considered and the first to be constrained. That’s backwards.

Whether it’s through tighter security, lower overhead, or faster integration, the most successful mergers treat IT as foundational—not transactional. They align IT spending with business objectives, clinical priorities, and long-term strategy.

As M&A activity accelerates across the healthcare landscape, the question is not whether to invest in IT—it’s whether your organization can afford not to.

Sources:

• Gartner, 2022. “Benchmarking IT Budgets in Healthcare.”
• IBM Security, 2023. “Cost of a Data Breach Report.”
• Ponemon Institute, 2023. “Identity Governance and Its Role in Healthcare Security.”
• Okta, 2022. “Business Value of Identity Consolidation in Healthcare.”
• KPMG, 2021. “Post-Merger IT Integration in Healthcare.”
• IDC, 2023. “Driving ROI Through IT Modernization in Healthcare M&A.”