What Is a TSA?

Credit unions are seeing a lot of merger and acquisition (M&A) activity these days and the term you hear a lot after signing is “TSA”, a Transition Service Agreement.

The TSA is a contract where the seller keeps providing certain services to the buyer for a set period after close. It is a temporary bridge so the business can keep running while the buyer stands up its own systems and teams.

Typical TSA services include:

• Finance and accounting
• HR and payroll
• IT infrastructure, security, and help desk
• Supply chain and logistics support

Without a Transition Service Agreement (TSA), the buyer might legally own the business on Day 1 but not be able to operate it.

What a TSA Is Really For

On paper, a TSA lists services, service levels, and pricing.
In practice, it exists to:

1. Keep customers and employees stable during the transition
2. Buy time for separation and integration work
3. Make clear who does what, and until when

If any of those fail, both sides feel it in disruption and unexpected cost.

Where TSAs Go Wrong

Most TSA issues are execution issues, not legal ones:

• Services are vaguely defined, so nobody agrees what “support” really includes
• Exit timelines are set to match the deal story, not the actual work
• No clear owner for TSA exit, so extensions and fees pile up
• Dependencies in IT, cybersecurity, data, and operations are discovered late

Once that happens, the TSA becomes a cost trap instead of a bridge.

The Role of Strategy Execution in a TSA

A TSA is not just a contract to file away. It is a strategic program that needs to be delivered.

A PMO with a strong Strategy Execution Framework will:

• Turn TSA language into concrete workstreams, milestones, and cutovers
• Make TSA exit dates visible and tracked like any other critical deliverable
• Coordinate IT, HR, finance, operations, and vendors across both sides
• Give leadership a clear view of “what must be true” to exit on time

Without that structure, TSA work competes with everything else and usually loses.

One Question to Ask

If you are in a deal that includes a TSA, ask:
Who from each side owns delivering the TSA, not just negotiating it?

If the answer is unclear or split across too many people, you likely have a gap.
That gap is where delay, extra fees, and lost deal value usually show up.