Today, almost every company is a technology company to some extent, and those which are not typically have unlocked potential that a new investor can expedite through considered upgrades. IT and tech are an increasingly central component of business operations, and systems could cause significant problems for an organisation as it scales. As a result, during the M&A process, buyers conduct an in-depth examination of an asset’s IT systems, policies and processes to determine if they are appropriate to the growth ambitions.
At onefourzero, we balance a thorough IT and tech due diligence process with summarised, clear, actionable outputs for private equity firms and portfolio companies that identify opportunities and risks.
Onefourzero’s IT Due Diligence Process
Our IT diligence process starts with a combination of documentation review, outside-in analysis and interviews with key managers and IT decision-makers.
Using the information gathered via each of these strands, we will assess the asset’s IT architecture and infrastructure, software choices, cybersecurity measures and risk / compliance management practices.
Red flag rating system and action-focused recommendations
We communicate our assessment to clients using a red flag rating system, which ranks all of these factors based on general best practice and sector-specific considerations. Green signals that no action is required, orange signals that there is improvement potential during value creation (which we will also detail for the team or appropriate 3rd party provider to action) and red means that material remediation is required prior to any investment.
Key observations
Alongside the red flag ratings, we will outline key observations and findings and rank them by urgency. For example, we will determine whether your firm is using well-architected solutions and a flexible, scalable design allowing for expansion. Additionally, we will determine whether key person risk exists and suggest that your firm put a formal succession plan in place to avoid future problems.
Why Commission Onefourzero IT Due Diligence?
We’re experienced
Since our inception in 2014, we’ve worked with dozens of prestigious clients, including private equity firms and global brands. Our past clients include Morgan Stanley, Equistone, Key Capital Partners, Bain Capital, Livingbridge and many more.
We’re not just consumer-orientated
Over the years, we’ve worked across a wide range of sectors, developing specialisms outside of consumer. For example, our team of expert consultants have worked with companies across the globe from the education, industrial, pharmaceutical and healthcare industries.
We help to identify potential deal-breakers early
Our IT due diligence will help your firm identify potential deal-breakers early during the deal process. Of course, deal-breakers vary by organisation. For example, organisations looking to acquire assets may walk away from the deal if the asset’s IT capabilities are limited or flawed. But the advice dispensed in our reports allows others to spot diamonds in need of just a little polishing. Commissioning onefourzero to conduct IT due diligence will allow organisations to feel safe knowing that IT systems and processes are in good condition.
In Summary
A thorough investigation of an asset’s IT and Tech architecture, processes, and stack is essential during the M&A process. IT and tech due diligence has moved from what some may have viewed as a box-ticking exercise. Now, it is an essential that gives organisations peace of mind that an asset is in good working order and can scale with the broader investment.
Onefourzero conducts IT due diligence for organisations in multiple sectors, including but not limited to finance, retail, business services, energy, telecoms, healthcare, education, travel, industrials, and dining and entertainment. To learn more about our IT due diligence service, please get in touch.
