Make IT a Partner in Successful M&A Due Diligence
Get IT involved in the M&A process pre-close to help ensure post-close success.
RETIRED CONTENT
Please note that the content on this page is retired. This content is not maintained and may contain information or links that are out of date.Lack of IT involvement early in an M&A transaction results in:
- Lack of alignment between IT & M&A business goals
- Ineffective integration planning and execution
- Poor risk identification and mitigation
- Inaccurate budgeting resulting in underestimated integration costs
Getting IT involved early in an M&A transaction results in:
- Greater alignment between IT and the business
- Quicker, more informed decision making
- Effective risk management
- Faster and smoother post-M&A integration
- IT being positioned as an innovation driver
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Module 1: Launch Due Diligence
The Purpose
- Determining IT’s current capability to support an M&A transaction.
- Identifying the goals and objectives the business has for the M&A.
- Gaining the buy-in of the M&A team and executive management for IT’s involvement with M&A due diligence.
Key Benefits Achieved
- Capability for IT to successfully support the business throughout the M&A transaction determined.
- M&A business goals and objectives identified.
- IT due diligence team selected.
- Gaining buy-in for IT’s involvement in M&A due diligence.
| Activities: | Outputs: | |
|---|---|---|
| 1.1 | Complete & review M&A health check |
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| 1.2 | Gain executive buy-in for IT involvement in M&A due diligence |
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| 1.3 | Identify M&A business goals and objectives |
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| 1.4 | Assemble the IT due diligence team |
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| 1.5 | Define success metrics |
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Module 2: Gather Information
The Purpose
- Taking a structured due diligence approach that properly evaluates the current state of each organization involved in the M&A transaction.
- Retrieving critical information from the target organization to help determine the attractiveness of the M&A target.
- Examining the needs of each organization based on analysis of application and data, infrastructure, IT people, and IT processes at each organization.
Key Benefits Achieved
- A clear understanding of the steps that are involved with gathering information on both the target organization and the buying organization.
- Recognition of the various methods of collecting information from the target, the iterative nature of the collection and documentation process, and the format in which information should be recorded.
- Understanding the considerations that need to be made when looking at the current state of each organization.
| Activities: | Outputs: | |
|---|---|---|
| 2.1 | Determine the business capabilities of the target organization |
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| 2.2 | Prepare a list of questions for the target organization |
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| 2.3 | Create a strategy for on-site discovery |
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| 2.4 | Retrieve or create a business capability map for the buying organization |
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| 2.5 | Identify the master data domain, data sources and system of record at the buying organization |
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| 2.6 | Retrieve (or create) an applications inventory and map to business capabilities at the buying organization |
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| 2.7 | Identify and consider infrastructure at the buying organization |
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| 2.8 | Identify and examine important IT processes at each organization |
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| 2.9 | Retrieve (or create) an IT organizational chart and examine the current IT staff at the buying organization |
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Module 3: Perform Analysis
The Purpose
- Understanding how the business sees the resultant capabilities in the newly formed organization and determining the best way to support them.
- Selecting a target technology environment that is aligned with the business objectives for the M&A.
- Identifying gaps, redundancies, and initiatives for each business domain, and selecting the appropriate IT integration strategies to achieve the target technology environment.
Key Benefits Achieved
- Identification of the ideal post-M&A target technology environment.
- Recognition of the key considerations when determining the appropriate combination of IT integration strategies.
- Vision of the IT organizational design for the resultant enterprise.
| Activities: | Outputs: | |
|---|---|---|
| 3.1 | Define the resultant enterprise capability map |
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| 3.2 | Select the target technology environment |
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| 3.3 | Analyze data and application gaps and redundancies, then determine the IT integration strategies |
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| 3.4 | Identify the resultant enterprise’s infrastructure needs |
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| 3.5 | Identify IT process gaps and redundancies |
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| 3.6 | Identify IT people needs and redundancies |
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Module 4: Estimate Costs
The Purpose
- Developing assumptions to estimate the remaining capital and operating costs that have not yet been reflected in the integration budget.
- Preparing the IT Due Diligence Report for final submission to the M&A team.
Key Benefits Achieved
- Recognition of how to create an IT integration budget for the M&A transaction during due diligence.
| Activities: | Outputs: | |
|---|---|---|
| 4.1 | Develop assumptions to close remaining M&A gaps |
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| 4.2 | Finalize IT investment costs and synergies |
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| 4.3 | Finalize the IT Due Diligence Report |
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