The Risks in Making IT Integration an Afterthought in M&A
Most M&A playbooks still position IT as a post-close workstream. Systems will be rationalized later. Security tools will be consolidated eventually. Identity will be addressed once business operations stabilize. This sequencing is backwards, particularly in regulated industries.
In healthcare and pharma, IT is not a utility layer. It is the backbone of clinical operations, research and development, manufacturing systems, supply chain integrity, patient engagement, and regulatory reporting. Identity systems govern who can access protected health information, clinical trial data, intellectual property, and financial systems. Delaying integration of these controls creates a window where access is excessive, poorly governed, and difficult to audit.
Industry breach data consistently shows that compromised credentials remain the dominant attack vector. Ransomware groups target healthcare organizations precisely because identity sprawl, legacy authentication models, and fragmented governance are common. An acquisition accelerates all three risks at once.
The Cost of Missing Initial Integration
The most damaging M&A cybersecurity failures rarely stem from exotic exploits. They result from basic integration gaps that were never closed.
Duplicate identity systems persist longer than planned. Users accumulate accounts across both organizations. Access rights are granted broadly to keep the business moving. Deprovisioning logic breaks down because no single authority owns identity lifecycle decisions. Auditors struggle to trace who had access to what and when.
In healthcare, this translates directly into compliance exposure. Protected health information may be accessible by users who no longer have a legitimate treatment, payment, or operations role. Research data governed by contractual or regulatory restrictions may be exposed across organizational boundaries. Manufacturing and quality systems may inherit users without validated training records or role justification.
The regulatory consequences are not theoretical. HIPAA enforcement actions routinely cite failures in access control, audit logging, and identity governance. The Office for Civil Rights has been explicit that reasonable safeguards include role-based access, timely termination of access, and auditable controls. During M&A, organizations often violate these expectations unintentionally by prioritizing speed over structure.
The operational impact is equally severe. When an incident occurs, and in a fragmented identity environment it eventually will, incident response teams cannot answer basic questions quickly. Who accessed this system. Which identities were inherited from the acquired entity. What permissions were in effect at the time. Delay compounds damage. Regulators notice. Plaintiffs notice. The board notices.
Cybersecurity Is Not a Perimeter Problem
A persistent misconception in executive discussions is that cybersecurity strength is defined by perimeter controls. Firewalls, endpoint tools, and network monitoring are important, but they do not define trust in a modern enterprise. Identity does.
Healthcare and pharmaceutical environments are no longer bounded networks. Cloud platforms, SaaS applications, research partners, contract manufacturers, and remote clinicians dissolve the perimeter entirely. In an M&A scenario, this collapse is immediate. Two sets of vendors, two clouds, two identity stacks, and two governance models are suddenly intertwined.
Identity is the control plane that determines whether this complexity becomes manageable or dangerous. Authentication methods, authorization models, privilege assignment, and identity lifecycle governance must be designed deliberately. Without this, organizations rely on implicit trust and static permissions that adversaries exploit easily.
Modern security frameworks emphasize zero trust principles for a reason. Every user, human or machine, must be authenticated strongly. Every access request must be evaluated based on role, context, and risk. Every action must be logged and auditable. These principles are impossible to enforce retroactively if identity integration is deferred.
Identity Integration Is the Hard Part
Executives often assume identity integration is a technical exercise. Migrate directories. Sync users. Standardize authentication. In reality, identity integration is a business and risk exercise that happens to use technology.
Each organization brings its own definition of roles, entitlements, and segregation of duties. Clinical roles do not map cleanly across systems. Research access may be governed by grant terms or regulatory submissions. Manufacturing access may be tied to validated processes and quality systems. Simply merging directories without rationalizing these differences creates toxic combinations of access.
This is where many integrations fail quietly. To avoid disruption, teams grant access broadly. Temporary exceptions become permanent. Governance committees are deferred. Audit findings accumulate. The organization becomes less secure than either predecessor entity.
Identity integration must start with a clear operating model. Who owns identity decisions post-close. How are roles defined and approved. How is least privilege enforced across clinical, research, and corporate systems. How are machine identities governed as workloads migrate and integrate. These are executive questions, not implementation details.
Compliance Is About Capability, Not Checklists
HIPAA, FDA regulations, GxP requirements, and international privacy laws all intersect in healthcare and pharmaceutical M&A. Compliance is often framed as a documentation exercise. Policies are updated. Risk assessments are performed. Training is delivered.
This approach misses the point. Regulators care about demonstrated capability. Can the organization enforce appropriate access controls. Can it prove those controls were in place. Can it detect and respond to misuse. Can it show that changes introduced by the acquisition did not weaken safeguards.
When multiple compliance-focused systems are in play, such as electronic health records, clinical trial management systems, manufacturing execution systems, and financial platforms, the risk multiplies. Each system may enforce access differently. During integration, identity becomes the only practical layer where consistent control and auditing can be applied.
Failure here leads to a common and dangerous outcome. Each system is technically compliant in isolation, but the integrated environment is not defensible. Auditors increasingly recognize this gap. So do plaintiffs’ attorneys.
The Role of Experienced Consulting Partners
Executives are right to focus on the business rationale of a deal. They are not wrong to delegate execution. But delegation without expertise is abdication and can lead to failure.
Healthcare and pharmaceutical M&A demands advisors who understand more than integration timelines and system migrations. It requires practitioners who have lived through regulatory scrutiny, incident response, and post-merger audits. Professionals who understand how identity, security, compliance, and business operations intersect under pressure.
The difference is visible immediately. Experienced teams insist on early identity strategy. They push governance decisions into the deal timeline. They challenge assumptions about temporary access. They design integration plans that assume breach scenarios, not best-case outcomes. They understand where regulators look first and how adversaries exploit transitional states.
This is not academic rigor. It is risk reduction based on lived experience of dealing with a number of situations that identify gaps that are often overlooked.
A Final Warning to Executive Leadership
M&A in healthcare and pharmaceuticals is accelerating and based on recent analysis by Gartner, is going to have its biggest year ever in 2026. Regulators are not lowering expectations to accommodate integration complexity. Plaintiffs are not sympathetic to excuses about transitional states. So missteps are not an option and getting it right straight out of the gate is paramount.
Organizations that treat IT, identity, and cybersecurity as secondary concerns in M&A are not saving money. They are deferring risk until it becomes public, expensive, and personal. Breaches during or after acquisitions are not anomalies. They are predictable outcomes of structural neglect.
The executives who succeed in this environment are those who recognize that technology integration is business risk management. Identity is not an IT subsystem. It is the enforcement mechanism for trust, safety, and compliance. Getting it right the first time is not optional.
It is the difference between realizing deal value and becoming a case study others learn from.
And in healthcare and pharmaceuticals, being the cautionary tale is a position no board can afford and neither can the investors.
