What is It Due-Deligence

IT due diligence is the process designed to find a clear and comprehensive picture of the Total Cost of Ownership (TCO) of a company’s IT infrastructure as well as the risk associated with any future mergers or acquisitions.

There are four steps to the IT due diligence process:

  1. Assessment of the company’s standards, inventory, and systems
  2. Assessment of all databases and applications in use
  3. Assessment of current IT support services and vendor operations
  4. Analysis of the IT company’s structure and how it enhances their core business activities.

Why it becomes Critical for VC Investment in Software Products

Take-Over or VC Investment of an established product with existing customers, tech and marketing team is a Risk ridden process. The costs involved are huge.

You have to bridge out so many gaps e.g Cultural,Skills,Dev,Dev-Ops processes etc etc. So a good due diligence is required to validate and rationalize the cost of acquisition.

To identify any risk(s) before hand and devise proper mitigation plan(s) for them.

Steps involved in it

due diligence is a process, and it is important to find a qualified professional to assist with this process. There are four steps to the process of examining a companies IT infrastructure: examining the company’s standards, inventory, and systems; evaluation of all databases and applications in use; assessment of IT support services in place and delivery; and an analysis of the IT company structure in regards to the support of business activities.

IT Due Diligence Checklist

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Post Due-Deligence

After a professional takes you through the process of gathering information in regards to the IT portion of the company in question, you may also want to take the IT due diligence a step further and have a full security analysis performed. 

This will not only look at how the other company works in regards to their IT, but will also help you examine the possible threats to security you may see in the future.  This analysis is an important step as it clearly defines the type of data that needs to be protected, where the data is stored as far as the system set up and how it is currently protected.

Understanding the basics of IT due diligence and the importance of having a professional assessment done prior to a merger or a big contract can help you avoid the headache of finding out that there were underlying IT issues after the fact.  While there are often very different IT procedures in place from company to company, it is important to have a clear picture as to how they can mesh if they need to.

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