As one of the most complex events in a company’s lifecycle, a merger or acquisition demands careful integration planning. The inability to effectively integrate the technology infrastructure and applications of the two entities can lead to duplication in expenditures, conflicting processes, and inconsistent and ineffective systems.
We can help you proactively plan and implement post-merger integration activities. We offer a full suite of capabilities-from IT due diligence through integration planning, change management and implementation support -to help your business rapidly realize planned synergies, drive significant cost savings, and establish a strong basis for accelerated growth.
Due Diligence Assessment
A due diligence assessment of an organization’s IT function is often required by investors, as part of a merger or acquisition. It may also be required from time to time by the owners of a business, to ensure a better understanding of the opportunities, costs, and risks involved in the IT function. In either case, there are benefits to having a specialized and independent third party perform the assessment.
Our IT due diligence consulting service evaluates the current state of the organization’s systems, infrastructure, people and processes, identifies opportunities for cost savings, assesses risks, and outlines scenarios for future systems.
Our assessments can be selectively tailored according to your needs and may include:
IT Applications Portfolio
The business applications that the organization utilizes in support of business processes. These commonly include ERP, CRM, HCM, business intelligence, and a wide variety of industry-specific systems. What application systems are installed, and what shape are they in? Are they suitable for a company of this size, in this industry? If they are packaged systems, how well are they supported by existing staff or vendors? Are users satisfied? What system development projects are underway? What is the status? Should they continue? What should be done to ensure successful implementation?
The technical architecture of hardware, operating systems, databases, end-user computing platforms, communications, and facilities. This also includes use of newer cloud platforms to replace on-premises IT infrastructure and systems. What IT hardware or lease obligations are on the books? What network infrastructure is in place? Who are the service providers? What problems or issues are there? Are there any issues with software license transfer when corporate ownership changes? What is the market or liquidation value of certain equipment?
IT Organizational Assessment
What is the size and skill level of the existing IT staff? How does IT headcount and staff mix compare to others in this industry? Who are the key resources, who need to be retained? What actions should be taken to mitigate the risk of loss of these key personnel?
IT Process Evaluation
What are the current processes for applications development, IT operations, disaster recovery, IT security, and cost management? What IT management best practices should be implemented? Are IT systems adequately secured against intrusion or known vulnerabilities? Is there a disaster recovery plan? Are backup/recovery procedures implemented and tested? In regulated industries (e.g. life sciences), are there risks of non-compliance?
How do overall IT spending and staffing levels compare with others in this industry? Should this company be spending more, or less, on IT?
Opportunities for cost savings
Are there opportunities for data center or server consolidation to create value or improve performance? What maintenance, telecom, and service contracts are in place? Are rates competitive? Is there unneeded or unused coverage? Can certain IT capabilities be more cost-effectively performed by outsourcing? If outsourcing is currently in place, can certain functions be more cost-effectively delivered internally?
During a merger or acquisition, an effective IT due diligence process can minimize risk, improve the odds of success, and increase the value of the deal. Our structured methodology allows us to deliver an IT due diligence within short deadlines and our independence from technology vendors gives us an unbiased perspective that is essential.
Based on our assessment of the current IT capabilities at the target company, we can assess whether the IT infrastructure is scalable to support its anticipated growth. Our IT consultants can also identify corrective actions needed to fix current problems and outline future scenarios for IT. Future scenarios could include expanding, upgrading, or replacing certain systems, integrating IT operations with a new corporate parent or other division, outsourcing some or all of the IT function, or adopting a new enterprise IT architecture.
For further information on how we can help ensure a successful integration and minimize adverse impacts to the business, see our Execution Services.