DE  / EN
IT Due Diligence für M&A

The solution for M&A professionals

AUTOMATED IT DUE DILIGENCE

Minimize Risk in M&A transactions using REDFLAG ANALYSIS™


WHAT IS REDFLAG ANALYSIS™?

Acquisitions offer significant opportunities for growth, synergy and enhanced profile.

But also risk!

We are used to dealing with risk. But what about hidden risk?

IT is the leading source of unpredictable cost.

Use REDFLAG ANALYSIS™ for IT Due Diligence to minimize cost in your M&A transactions.

The RED FLAG report highlights strengths and weaknesses in a clear and understandable way.

It is swift and based on longterm practical experience.

REQUEST FOR PROPOSAL


The 5 steps to successful IT Due Diligence

HOW IT WORKS

The IT Due Diligence Process - Initial kickoff meeting
The IT Due Diligence Process - Interviews
The IT Due Diligence Process - Risk calculation
The IT Due Diligence Process - expert interpretation
The IT Due Diligence Process - Final presentation

Step 1INITIAL KICKOFF

The first step in the IT Due Diligence process is the INITIAL KICKOFF. The best practice meeting agenda therefore contains:

INTRODUCTION

A PROCOMM expert explains the concept of the REDFLAG ANALYSIS™ to all participants.

DUTIES AND RESPONSIBILITIES

  • list Project Manager (who is responsible for delivery)
  • list Informants (who will be answering the various categories of questions)
  • list Project Sponsors (who will receive the final report)

PLANNING

  • list Launch date
  • list Questionnaire submission deadline
  • list FINAL REPORT presentation date

QUESTION & ANSWER

The participants’ questions will be answered by a PROCOMM expert. Best results are achieved when all stakeholders have a thorough understanding of the process.

LAUNCH OF PROJECT

Final approval and clearance by the Project Sponsors.

Step 2INTERVIEWS

This is how the interview process is conducted:

PROJECT INITIALIZATION

The project manager creates the new project, generates the logins for the Informants and mails out the REQUESTS FOR INFORMATION.

QUESTIONNAIRES

The informants are guided through the process step by step by the PROCOMM Expert, using the REDFLAG ANALYSIS™ Tool. The informants will receive only the questions relevant to their areas of competence.

COMPLETION

The informants check the OK status in the system after completion of their respective questionnaire.

CALCULATION

Once all questionnaires are completed, the Project Manager initiates the risk analysis calculation, using the REDFLAG ANALYSIS™ Tool.

Step 3CALCULATION

The REDFLAG ANALYSIS™ Tool calculates the ratings and generates the following reports:

  • list SUMMARY SCORE (the aggregated ratings)
  • list REDFLAG REPORT (the rating per category)
  • list RISK CLASSIFICATION REPORT (risk classification monetary/operational/dependency)

The IT Due Diligence Redflag Report

Example RED FLAG REPORT

Read more about how these calculations are performed and WHAT YOU GET.

Step 4EXPERT INTERPRETATION

The PROCOMM expert analyses the findings and compiles the recommendations:

EXPERT RECOMMENDATION REPORT

The PROCOMM expert presents the findings and recommendations in an understandable and realizable form.

Client example: «We recommend replacing the current accounting software solution with a standard package and no further investment to be made in the current custom-built system.»

STRATEGIC IT ASSET REPORT

The report shows assets of the IT landscape with its strategic values. This may highlight competitive advantages regarding processes or operations. The assets identified may also impact corporate value in both ways.

Client example: «The target company operates highly efficient processes, employs highly skilled people and uses well-aligned tools. This organization has the potential to expand its activities to serve other companies.»

Step 5FINAL PRESENTATION

The Project Sponsors discuss the findings and recommendations directly and in person with the experts during FINAL PRESENTATION.

The newly gained insight is aligned with strategic priorities.

The Project Sponsors are now in a strong position to take well-informed decisions and to further develop the company.

REQUEST FOR PROPOSAL


This is what you can expect

WHAT YOU GET

The IT Due Diligence assessment using the REDFLAG ANALYSIS™ method provides all the reports shown below. Strategy can now be formulated based on deep insight.

The risks and opportunities have now been clearly identified – as are the strategic assets.

ASUMMARY SCORE

Shows the summary score of the risks

The IT Due Diligence Summary Report Example: SUMMARY SCORE

BREDFLAG REPORT

Shows areas with potential for improvement.

The IT Due Diligence Redflag Report Example: Percentage of hard fails per category

RISK CLASSIFICATION REPORT

The risks are classified as follows

OPERATIONAL RISK

Operational risk may include negative implications on efficient and reliable process execution. Weaknesses in IT systems can endanger core company operation.

MONETARY RISK

Monetary risk may include the hidden need for investment or replacement of costly IT Systems. These risks may also extend to include expenditure in stabilizing and securing operations.

DEPENDENCY RISK

Potential single points of failure are highlighted in this report. In IT, dependencies on individuals or vendors can have costly consequences.

Example: RISK CLASSIFICATION CHART

EXPERT RECOMMENDATION REPORT

The PROCOMM expert presents the findings and recommendations in an understandable and realizable form.

Client example: «We recommend replacing the current accounting software solution with a standard package and no further investment to be made in the current custom-built system.»


STRATEGIC IT ASSET REPORT

The report shows assets of the IT landscape with its strategic values. This may highlight competitive advantages regarding processes or operations. The assets identified may also impact corporate value in both ways.

Client example: «The target company operates highly efficient processes, employs highly skilled people and uses well-aligned tools. This organization has the potential to expand its activities to serve other companies.»