5 – Technology Due Diligence

Well-run companies leverage technology for competitive advantage and efficiency. A technology-savvy company uses technology to delight customers, adapt to markets in agile ways, make powerful decisions with data, and use automation for efficiency. A strong technology program is a significant asset for a company, but a weak technology program can be a drag on a company, and pose a big challenge for an acquisition.

The list of challenges in IT are many: Commercial systems may be poorly implemented. Custom systems may be poorly developed. Software licenses may be overly expensive. The lease on the data center may be ending. A key company system may be losing vendor support. Information security may present risks…

Downeast consultants have performed over 40 technical due diligences over the past seven years, supporting deals valued at over $15b. We have provided deal teams with information on technology contributes to the value of an acquisition, as well as developed IT plans to enable post-acquisition success. Downeast uses a proven approach and framework to uncover acquisition technology weaknesses, assess impact and plan for future technology success.

Our approach and deliverables are geared toward deal insight and preparation:

  • A clearly structured approach for data requests, management interviews, outside-in exploration, collaboration and reporting to collect and feed timely information to the acquisition
  • Daily (or more often) updates for the deal team as technology information is understood through calls, emails or secure collaborative site
  • Assessment of key material IT risks with estimates of deal value impact and mitigation cost
  • Assessment of strength of IT functional areas and implications for future revenues, profitability and operations

We provide insight into the following IT areas:

IT leadership and organization

IT data centers, cloud, other infrastructure and support

IT systems that serve customers and operations, including custom systems and technical debt

Company data and analytics

IT licenses and contracts

IT vendor use and arrangements

SG&A systems and support

Cybersecurity

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