Integration Budgets: Choose Agility Over Accuracy

If you’re designing an integration budget and aiming to get it right the first time, pause. A “first-time-right” integration budget looks neat on paper, but deals are living things: assumptions shift, realities surface, and execution models change. Treat a due diligence budget as a starting point — not a fixed outcome — and you’ll avoid one of the most damaging traps in integrations: confusing precision for preparedness.

From experience, four areas demand leadership attention if a budget is to survive real-world execution.

1. Stop chasing the “right-first-time” myth

Deals are inherently dynamic. Target-state assumptions, TSA hypotheses and the business’s approach to delivering synergies evolve from pre-sign through to post-TSA exit. Building a highly detailed “final” budget in diligence can create a false baseline that everyone then polices against. That behavior stalls decision-making and encourages needless debates about numbers rather than progress on the ground. Instead: accept uncertainty early, be explicit about assumptions, and use the initial budget as a directional plan that will be refined as facts emerge.

2. Set up robust budget governance with clear checkpoints

Budget flexibility needs structure. A strong review-and-approval framework is the backbone that lets budgets flex without stalling execution. In carve-outs that usually means a dedicated approval path separate from BAU so decisions can be made quickly and with the right accountability. Useful checkpoints include:

• Due diligence: high-level assumptions only.

• Post-signing: update based on Buyer × Seller × Target discoveries.

• Pre-closing: refine using vendor quotes and firmed vendor commitments.

• Post-close: translate into capacity plans tied to TSA exit milestones.

Make those moments explicit, make owners accountable for reconciling assumptions, and align approvals to delivery triggers (not arbitrary dates).

3. Explicitly plan for backfill and interim capacity

This is one of the most underestimated and high-risk areas in integration budgeting. Adequate backfill is critical to protecting BAU while integration is delivered. Pro-tip - Budget and contract for interim support from the outset for the full TSA duration, including possible extensions. This is not sandbagging; it is being realistic about delivery risk in carve-outs

4. Retain contingency even when the budget feels “final”

As execution progresses, risk does not disappear — it concentrates.
Unexpected events will happen. In one transaction, a critical IT vendor faced a cyber incident mid-TSA exit, forcing us to onboard an alternative vendor at a higher cost. Contingency wasn’t a nice-to-have; it saved the plan.

Designing an integration budget that survives execution is less about nailing a single “right” number and more about building governance, realism and breathing room into the plan.