IT is often the largest capital and operational expenditure item on the books meaning its value can be a game changer.
- Buyers need confidence that the IT assets supporting the business are up to the task.
- Buyers need a clear view of any IT investment required to maintain the EBIT of the target business and include these costs in their calculations and negotiations.
- Sellers should Identify and deal with IT issues that could affect a transaction to secure the best possible sale price.
- Sellers and buyers both need to minimise the impact of the sale and the transition process on business operations.
WHAT IS DUE DILIGENCE SERVICE?
Due diligence is an investigation or audit of a potential investment or product to confirm all facts, such as reviewing all financial records, plus anything else deemed material. It refers to the care a reasonable person should take before entering into an agreement or a financial transaction with another party. Due diligence can also refer to the investigation a seller does of a buyer; items that may be considered are whether the buyer has adequate resources to complete the purchase, as well as other elements that would affect the acquired entity or the seller after the sale has been completed.
In the investment world, due diligence is performed by companies seeking to make acquisitions, by equity research analysts, by fund managers, broker-dealers, and of course by investors. For individual investors, doing due diligence on a security is voluntary, but recommended. Broker-dealers, however, are legally obligated to conduct due diligence on a security before selling it. This prevents them from being held liable for non-disclosure of pertinent information.
What is the difference between SAM and Due Diligence services?
Software Asset Management (SAM) is an industry best practice that helps to control costs and optimize software investments across organization and throughout all stages of their life-cycles. A fully implemented SAM can help you detect risks, cut costs, improve security and compliance, and anticipate future software needs.
Due diligence takes different forms depending on its purpose: legal, financial and also in other aspects relevant for particular business. As a general rule, due diligence is an investigation of a business or person and is part of a M&A transaction prior to signing a contract, or an act with a certain standard of care.
IT Due Diligence is needed if:
- You want to acquire a business that relies heavily on its IT systems. You’d like to be sure that the IT system is secure, efficient and able to support the business’s future growth.
- You need a clear idea of IT integration costs, capex and potential synergies before buying or investing in a company.
- As a seller or buyer of a carve-out entity, you want to be sure of the impact of the IT carve out in terms of EBIT and capex.
Business essence is data, systems, processes. Due diligence of IT systems has become an important part in business transactions and the purpose of it is to:
- Identify potential synergies (optimization, cost reduction, labour reduction) and risks associated with IT changes.
- Assess compatibility of the existing software agreements and license types. Snapshot of all Hardware and Software.
- Recommendations on mitigation of commercial risks pre- and post- closing, software license and agreement migration scenarios, license procurement improvements, software asset and cost management system implementation plan.
SQUALIO works with the Customer to develop an inventory of the deployed software on investigated company’s computers along with a review of investigated company’s corresponding license documentation and software needs. Part of IT due diligence is to identify possible legal and financial risks associated IT within the investigated company and provide recommendations to reduce them.
Analysis & Result presentation
What will I get in the end of this service?
At the end of the service SQUALIO provides Customer the following deliverables:
Due Diligence Review
Overview consists of the following parts:
- Fulfilled project executive summary;
- Potential Contractual, Administrative or Criminal liabilities;
- Commercial risk overview; Cancellable or renegotiable software license contracts.
- Mitigation of commercial risks pre- and post- closing;
- Software license and agreement migration scenarios;
- License procurement improvements; Software asset and cost management system implementation plan.
Detailed Excel report with license compliance situation, which consists of the following parts.
Developed profile of:
- Hardware & Software asset inventory;
- Licensable software;
- Software installations per computer;
- Computer system specification;
- Server infrastructure specification;
- User and device access licenses;
- License entitlements;
- Effective license position;
- Owned license total value and coverage;
- Missing license position costs.
WHY CHOOSE SQUALIO?
Squalio has extensive experience in performing multiple hundreds of audits representing global vendors and helping customers optimize their agreements, risks and costs for vendors like Microsoft, Oracle, IBM, Autodesk.
The accumulated knowledge in these complex subjects and environments has allowed Squalio to create a unique investigation framework based process, that allows to achieve a highly transparent and argumented results.
Trusted by global customers from banking, education, manufacturing, till oil & gas sectors, Squalio IT Due Diligence service is the outcome of experience, knowledge and skills!