How IT Assessments Can Reduce M&A Risks

How IT Assessments Can Reduce M&A Risks

The purchase or sale of a company is one of the most critical decisions an organization will make. There were so many criterias to take into consideration. You can reduce them by including technology assessments in M&A due-diligence investigations. IT assessments are required for all potential target companies. They should review their financial statements and business plans. Organizations also need to conduct IT assessments. This assesses the systems critical to the success of an organization: hardware, security software, documentation, processes, and productivity enablements. This helps companies identify cyber risk and points out opportunities for the acquiring organization to increase its value.

These are three areas companies should focus on during this assessment process.

Network Infrastructure

First, organizations must assess the company’s infrastructure. A technology consultant usually performs a network infrastructure assessment. It should include evaluations of the network’s design, security, and supporting systems. This information is critical because it will help organizations identify the business processes that should be evaluated to assess future threats or opportunities.

Companies should ensure that they know any internet connectivity issues during a network infrastructure evaluation. A second internet line is an excellent option for online businesses that use applications and programs. Business continuity is essential, especially in a company’s complete transfer.

Organizations need to evaluate internet services, such as ISP and WiFi. Employees who rely on their mobile devices for work can reap the benefits of WiFi. However, employees might have difficulty staying connected if this service is down. Employees may also have problems with their ISP and on-premise servers. Employees without active servers cannot access files stored on their computers, send emails, or access social media platforms. This is just one example where technology systems can impact the overall company evaluation.

Organizations should also assess the network structure within the target company. This will enable them to decide what resources should be moved or left behind as part of an acquisition.

Cybersecurity and Data Protection

Data protection and security are two other important factors organizations need to consider when evaluating potential acquisition targets. This is especially true when personal information (PI) or intellectual property (IP) is involved. Due diligence must ensure that IP and PI are protected to prevent breaches.

While an organization may conduct a vulnerability analysis to help understand security issues, it must also ensure that all systems and applications involved in the assessment are secure. If there are vulnerabilities, they should be identified to ensure that the system can be used during M&A due diligence.

There are many ways to safeguard data during M&A deals. A data protection plan is one way to ensure that personal data is protected during M&A transactions. It should identify who is responsible for implementing and enforcing the policy. The encryption method is another way to secure data. It transforms data into an unreadable format making it difficult for unauthorized persons to access it.

All organizations should implement a data breach response plan. This will ensure that your organization is prepared for any breach that might occur. This includes minimizing the effects of the breach, identifying the affected information, and taking steps that will prevent future violations.

These steps are crucial to ensure that a cyberattack does not cancel the M&A deal.

Technology-Enabled Productivity

It is difficult to understand precisely what you are getting into when purchasing a company. Technology can be an essential factor in productivity.

It’s crucial to consider whether the IT infrastructure they use is up-to-date when evaluating productivity enablements based on technology in M&A deals. It includes backups, which tools they use, and their current systems. This can be the difference between working seamlessly or being slowed down by technology problems. People often find ways to work around technical issues, which breaks the process and causes time wastage.

Depending on the reason for the acquisition, you’ll want to determine which resources will need to be moved or left behind to facilitate the smooth merging of technology.

Additionally, understanding technology contracts play a crucial role in helping companies understand third-party suppliers, customers, and partners. Post-acquisition, it is essential to understand what resources can and cannot be cut, adjusted, or increased and what vendors and providers can be consolidated.


An assessment of the IT infrastructure at a target company can help companies understand their current situation and potential opportunities and challenges. They will be better prepared to acquire if they have more information. Organizations will be better prepared for the challenges and opportunities associated with IT infrastructure when ready to make an M & M&A offer.

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Adam Collins
Adam writes about technology, business and economics. With master's degree in Economics, he's presented six papers in international conferences. As a solivagant in the constant state of fernweh, curiosity is the main weapon in his arsenal.

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