ICT/Systems due diligence on both sides of the takeover or merger …
Due diligence is one of the most time consuming and critical steps in the purchase of a business. We work on both sides of the fence, carrying out ICT/Systems due diligence for purchasers and assisting businesses that wish to sell to avoid difficulties in responding to the requests presented to them by their buyers.
Based on our experience, one of the areas that buyers are most interested in is the target’s information technology systems, processes and culture. Buyers more than ever want to ensure that, after the acquisition, the IT systems will be operating optimally, and that procedures are documented and followed, or will want to an assessment of the work required and cost involved in modifying or replacing the target’s systems.
We have worked on takeovers and mergers from the buyer’s side, auditing and scrutinising the target’s systems and have often found ourselves working with business owners who have no idea if their IT staff has documented anything, much less the crucial things like system backups and software security.
When you will most need systems due diligence
Businesses are most likely to experience a problematic due diligence if they have:
- a sophisticated web presence
- developed customized software that is business critical
- multiple ‘legacy’ systems operating independently throughout the business
- antiquated or inaccurate financial and managerial reports
- complex inter-company transactions that require consolidation or de-consolidation of financial reports
- multiple software systems that are required to interface with each other
- intellectual property rights on the technology they are using
- recently reduced their IT budget in order to show more profitability
- out of date IT systems or are using software that is no longer supported
- undocumented IT procedures
If you are a seller and any of these issues affect your business you need to be proactive and take steps today to prepare your IT systems and staff for scrutiny. If you are a prospective buyer then you are likely to benefit from assistance from IT due diligence consultants experienced in business transformation and in IT and its associated issues.
For a discussion of how we might smooth your merger or takeover call us on 01386 421747 or fill in our convenient contact form.