IT Checklist for a Successful Mergers and Acquisitions

An IT due diligence checklist is a helpful tool for companies to assess the risks associated with an M&A transaction. If a key element of your business is technology then it’s a great idea to put in place an IT strategy before you make any deal.

Business Evaluation

To ensure that both companies are on the same page:
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- Examine common organizational policies such as the information security policy, the code of conduct, the terms and conditions, and the data classification policy.
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- Identify any holes in security measures, analyze data protection capabilities, and evaluate cyber risk.

- Evaluate past audit and evaluation results and develop improvement plans accordingly.
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- Conduct thorough due diligence and appraisal to create an all-encompassing and complete integration plan.

IT Assessment
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To conduct a complete and comprehensive examination of technological systems:
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- Make a list of all the present IT systems, tools, and apps.

- Examine the systems and solutions for duplication or overlap.

- Determine which systems must be upgraded, integrated, or retired.

- Recognize important workloads.

Contracts and Licensing
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To establish terms for transparency, transferability, and termination:
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- Gather all vendor and other service provider contracts, agreements, and commitments.

- Understand the ownership and rights of software/hardware licenses in order to maintain healthy relationships and assure compliance.

- All internal contracts and obligations made to internal personnel should be reviewed and included in the transition strategy.

- Conduct a thorough third-party risk assessment to quantify the risks of transfer and termination.

Integration of Data
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To ensure accurate and seamless data integration and migration:
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- End-to-end data profiling is performed to understand the quality and quantity of data present.

- A data quality assessment is performed against pre-determined parameters to determine what data needs to be integrated/migrated.

- Revise business expectations in light of integration obstacles and project costs, and select data to be integrated accordingly.

- Understand the importance and necessity of various types of data - both logically to confirm business requirements and physically to facilitate seamless integration/migration.

Network Integration
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To comprehend how networks will be integrated or merged:
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- Determine whether the new entity that emerges from the M&A will continue on separate networks, merge into one of them, or be part of a whole new network that will be formed.

- Understand the benefits, costs, and risks of each of these techniques and select the one that results in the most effective, least disruptive transition strategy.

- Have a solid change management plan in place to guarantee that all changes are tracked, monitored, and documented.

Integration of Systems
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To guarantee that IT systems are carefully and successfully integrated, follow these steps:
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- Create a detailed map of existing IT systems and infrastructure and share it with other executives.
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- Make an integration plan that details all system integration actions.

- Examine how current IT infrastructure is managed and how it might be integrated or outsourced.

- Learn about the scalability of existing systems and develop an acquisition strategy that meets capabilities.

Messages
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To ensure that communications remains an essential component of today's collaborative workforce:
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- Determine which messaging service is currently being used by each organization involved in the M&A transaction.

- Determine whether one of the two communications platforms will be used or if a whole new system will be built.

- Create a transition plan based on the platform chosen to guarantee that employee communication and customer service are not disrupted.
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Cybersecurity
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To ensure that the merger and acquisition results in the highest level of security:
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- Make careful you thoroughly analyze both firms' cybersecurity postures, including data privacy requirements, security measures, and access control systems.

- Examine current IT security rules and audit results in terms of people, procedures, and technology.

- Make a point of classifying all systems and devices, including unaccounted-for platforms and IoT devices.

- Make a list of all vulnerabilities and issues that have been identified depending on the industry, geography, partners, products, and services.

- Look for any previous complaints or lawsuits involving fraud, extortion, or ransom.

Cost Estimation
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Determine all costs involved with IT integration, such as:
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- Implementation/customization/integration/migration of technology

- Legal and consulting fees for mergers and acquisitions

- Costs of debt servicing and rebranding

- Training, assistance, and upkeep


With M&A activity on the rise, there is an increased need for companies to integrate with other businesses. However, many deals fail or are derailed due to poor integration planning or execution. Having a robust IT checklist in place can not only bring two or more companies together, but also maximize synergies and the value they deliver as one entity.

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A cybersecurity risk checklist for mergers and acquisitions

The two parties to the transaction, like other assets,require visibility into the entire liability picture. Make a cyber-aware M&A team. You must ensure that cybersecurity professionals are included in any M&A activity. Consider the following when assembling your team:  

1. This includes the CISO.

2. Establishing a formal cybersecurity risk reporting mechanism  

3. Understanding your company's cybersecurity risk tolerance  

4. Developing metrics to assess target cybersecurity 

 5. Align corporate strategy and cybersecurity risk


Examine the target organization's cybersecurity posture.  

You must first comprehend how the target organization sees security. Understanding your maturity level is a excellent place to start. This entails requesting and reviewing the following:

1. Information about data breaches that is widely available in the public domain, such as news reports or data breach notifications  

2. Risk evaluations for cyber security  

3. Policies, protocols, and procedures for cyber security  

4. Policy on incident response is being reviewed.  

5. New audit reports  Reports of SOC Type I or Type II
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Discovering digital assets.

Organizations should ensure that they have an up-to-date asset inventory that contains the following items as part of the due diligence process:
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1. Every IP address

2. Inventory of users
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3. Networking equipment (routers, switches)

4. Machines, both physical and virtual

5. Providers of cloud services

6. Workstations
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7. Data storage places
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8. Application architecture
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Conduct an independent review.
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You must ensure that the records provided are up to date as part of the process.
The farther you get into discussions, the more certainty you need.
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Although you may not wish to conduct a thorough audit, you should consider the following:
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1. Examining penetration test reports
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2. Hiring a penetration testing company
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3. Search the deep and dark webs for leaked information such as sensitive data or credentials.

4. Network surveillance


Apply financial value.
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After acquiring the data, assess how it affects the whole deal.
The research gives value to your M&A efforts only if the liabilities can be quantified.

Consider potential costs deriving from:
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1. Prior to M&A, previously unknown data leak security vulnerabilities
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2. The requirement for new detection tools
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3. New monitoring tools are required.
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4. The requirement for new investigative tools
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5. Additional personnel
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6. Potential security flaws that may develop during integration


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