Understanding a target organization’s IT capability is now more important than ever in any acquisition due diligence process. With technology playing a bigger and more crucial role in business operations—facilitating remote work and enhancing digital experiences such as e-commerce, data and analytics, and business process automation—it is imperative to scope out the technology needs and investment requirements early on, and understand whether a target entity’s proprietary IT is real and can live up to its promise.

Wavestone has assisted numerous private equities and strategic buyers evaluate the technology and IT processes of potential acquisition targets. We appreciate the complexity of the process, which is why our advisory engagements are led by senior consultants as opposed to junior resources.

Strategic Value Creation

Most IT due diligence efforts in M&As are narrowly scoped, but Wavestone’s approach takes an in-depth look at how the target company’s current and future enterprise technology assets and resources create unique value and enable profitable growth. It offers a holistic view of the opportunities and the risks to define value driver initiatives and develop a practical value creation strategy that reflect the company’s competitive advantage from the start of the deal process.

Methodology

A typical Wavestone IT due diligence engagement is built on a three-point framework that will offer clear visibility into the target’s digital readiness: discovery, analysis and assessment, and recommendations.

 

Each engagement is tailored to the needs of the acquiring company. Our experienced consultants are comfortable working at an intense pace and operating as part of a broader due diligence team, often collaborating with other organizations in developing more holistic assessments that will answer important questions such as:

  1. Thesis and product evaluation: Can the product scale? Is it built to contemporary standards?
  2. Platform: Is the platform designed to innovate with additional features, partners, and workflow integrations?
  3. Back office: Does the organization have sufficient backbone and enablement to support the future strategy?
  4. Integration or merger: What are the challenges and costs to integrate this business into an existing business?
  5. Organization, people, and processes: Does the organization have the right people, organization structure, and processes to meet future strategy?
  6. Cyber risks: Does the organization properly protect customer data?
  7. Opportunities, financial model, and roadmap: What are the opportunities by area of business? What is the financial model to support investments? What is the recommended path forward?

All assessment information is presented back in a RAG (red, amber, green) reporting format with supporting commentary and recommendation to ensure risks and opportunities are known.

Our due diligence assessment comprises of the following dimensions:

 

Strategy Brief

Improving IT Due Diligence In M&As

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Featured Expert


  • Featured Expert - Bob Casale

    Bob Casale

    Managing Director

    • Bob Casale is a Fortune 100 C-suite executive with an exceptional record of IT innovation and achievement.
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