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.
Clearly then, the responsibility for IT due diligence should be assigned to a consulting firm that has both the specialized expertise as well as the independence to ensure that the job is done right.
Our IT due diligence consulting service evaluates the current state of the organization’s IT systems, IT infrastructure, people and processes, identifies opportunities for cost savings, assesses risks, and outlines scenarios for future systems. Our IT due diligence assessment covers the following areas:
Current State of IT Capabilities: existing IT systems assessment, and IT infrastructure assessment, an IT organizational review, and an IT process evaluation.
Information technology today is a critical function in most organizations. IT is not only a supporting function, helping to automate routine tasks and promoting process efficiency: It has also become embedded in the products and services of many companies. Even organizations that do not consider themselves “high tech” are now using IT as a core element of their products and services.
Yet, in many companies, IT is only managed as a technical group. The IT systems, IT organization, and IT processes may be designed well from a technical perspective, but poorly aligned from a business perspective. This can be the result of changes in business direction, sudden or long-term growth, or competitive challenges that create dissonance between what the business needs and what IT is providing.
A complete IT strategy includes the following, which can be selectively tailored according to your needs:
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. Scenario planning can be done as part of the initial IT assessment, or as a follow-on project in more depth.
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. The same considerations also apply when we perform an IT assessment for internal purposes.
In some cases, IT organizations may have a cost structure that is higher than necessary. In other cases, the organization may be underspending relative to its industry peers.
Our sister IT research firm, JT Solutions, gives us practical data for benchmarking a company’s IT spending and preparing a useful economic analysis. Our structured methodology allows us to deliver an IT due diligence within short deadlines. And our strict independence from technology vendors gives us an unbiased perspective that is essential, whether for investor due diligence or for an internal assessment.