IT Due Diligence

IT savings typically represent up to 30 per cent of M&A synergies enabling economies of scale. If the systems and their support processes are not scalable, it will not be possible to meet the targets in the business plan? Similarly, IT accounts for up to 50 per cent of total M&A integration project costs. Unless you understand the strengths, costs, liabilities, risks and weaknesses of IT, your business will under perform. Indeed, there is a risk that your operation will evaporate as a result of a single disaster.

MorganDoyle's IT due diligence service asks the right questions of IT and telecoms to evaluate their likely effect on business futures. The questions are not always obvious and the answers can be enlightening in unexpected ways. For example:

	How scalable is your existing technology? What capacity planning has been performed? What are the limits in terms of customer numbers, transactions, etc and do these support the numbers in the business plan?
	Are the IT & telecoms applications, systems and infrastructure robust & resilient? What disaster recovery business continuity plans are in place? When were they last tested? What is the Recovery Time Objective and what would the business impact be if it were down for that long?
	Operational Support: What plans, procedures and organisation is in place to support the products in service, e.g. service assurance, monitoring, fault reporting, helpdesk?
	How well is IT organised and managed? How well aligned is it with the business/how well does it interact with business decision making? What are the current IT team capabilities? Is it stable in terms of staff turnover? Is it dependent on any single, critical individual, e.g. the chief architect? How are new systems designed, built and tested - what are the processes for this?
	Quality Assurance: Are there standards, processes and procedures covering the significant areas of development? Are the procedures commensurate with the scale of the operation; are they documented and followed in practice? Is change control in place?
	What significant third-party relationships exist, e.g. for external support? What SLAs are in place? What liabilities exist e.g. penalties in termination clauses?
	Where systems are to be merged between companies: Will IT systems merge technically, including even ‘simple’ issues such as merging customer data? How well documented are bespoke systems and processes? What will the costs of conversion be and how will the transition be managed? Will the IT departments merge successfully and will there be effective information and technology transfer?

Finally, MorganDoyle understands that time is of the essence in making investment decisions and windows of opportunity do not remain open for long. Accordingly, MorganDoyle typically completes an assignment within 10 working days of it being commissioned.