What are the key performance indicators to track during deal execution?

1 Time to close

Time to close is the number of days it takes to complete a deal from the signing of the letter of intent (LOI) to the closing of the transaction. It reflects the speed and effectiveness of the deal execution process, as well as the complexity and risks of the deal. A shorter time to close can reduce uncertainty, costs, and disruptions, while a longer time to close can increase the chances of deal failure, leakage, or renegotiation. You should track the time to close against the expected timeline and the industry benchmarks, and identify the sources of delay and how to mitigate them.

2 Deal value

Deal value is the amount of money involved in a transaction, including the purchase price, fees, expenses, and any contingent payments. It represents the economic impact and attractiveness of the deal, as well as the return on investment for the parties involved. You should track the deal value against the initial offer and the valuation assumptions, and assess how it changes due to negotiation, due diligence, market conditions, or deal structure. You should also compare the deal value to the historical and peer transactions, and evaluate the value creation or destruction potential of the deal.

3 Synergy realization

Synergy realization is the extent to which the expected benefits of combining two or more entities are achieved in terms of revenue growth, cost savings, or operational improvements. It indicates the strategic rationale and performance of the deal, as well as the quality and speed of the integration process. You should track the synergy realization against the synergy targets and the integration plan, and measure the actual versus projected synergies over time. You should also identify the key drivers and enablers of synergy realization, and address any gaps or challenges that may hinder it.

6 Best practices

Best practices are the proven methods or standards that can improve the quality and efficiency of the deal execution process. They may include using a deal team, a project plan, a data room, a checklist, a playbook, or a scorecard. They may also involve following a structured and disciplined approach, leveraging technology and tools, engaging experts and advisors, communicating clearly and frequently, and learning from past experiences. You should track the best practices using a self-assessment, a benchmarking, or a review, and identify the strengths and weaknesses of your deal execution process. You should also adopt and implement the best practices that can enhance your deal execution capabilities.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?