Information System Review for Business Acquistion

To conduct a thorough assessment of the target company's Information Systems (IS) environment to identify risks, evaluate system performance and security, understand integration challenges, and inform the business acquisition decision.

Before initiating the review, it is essential to clarify the objectives and scope of the engagement. This includes determining the specific systems and business functions to be evaluated, and aligning expectations across the acquiring team, legal counsel, finance, and IT leadership. Initial preparation involves securing nondisclosure agreements and requesting relevant documentation from the target company, such as system architecture diagrams, vendor lists, IT organizational charts, and software licensing information. This groundwork ensures the review is focused, efficient, and aligned with the goals of the acquisition.

The core of the review involves a comprehensive assessment of the target company’s information systems. The IT infrastructure is examined first, including hardware assets, networking equipment, and the use of cloud services, to understand system performance, scalability, and redundancy. The review continues with an evaluation of software and enterprise applications in use—such as ERP, CRM, and finance systems—focusing on licensing compliance, technical debt, and long-term supportability.

Cybersecurity practices are assessed by reviewing existing security controls, incident response history, and regulatory compliance. This helps identify vulnerabilities and assess the organization’s readiness to prevent or respond to data breaches. IT governance is also analyzed to evaluate processes like change management, backup procedures, and access controls.

A critical area is interoperability: how well the systems communicate internally and with external partners. This involves analyzing APIs, data flows, and system dependencies, particularly in anticipation of future integration with the acquirer’s systems. The review also examines data quality, ownership, and management practices, which are essential for reporting and decision-making. Finally, the capabilities and structure of the IT team are reviewed, identifying critical personnel, outsourced service arrangements, and organizational fit with the acquiring company.

Once the technical assessment is complete, a risk profile is developed. This involves identifying areas of concern such as legacy systems, poor cybersecurity hygiene, licensing issues, or reliance on undocumented custom code. These risks are prioritized based on their potential impact on operations or valuation. Where possible, remediation costs are estimated to give the acquirer a clear view of potential hidden liabilities. This step ensures that all identified issues are quantified and factored into financial and operational planning.

Once the technical assessment is complete, a risk profile is developed. This involves identifying areas of concern such as legacy systems, poor cybersecurity hygiene, licensing issues, or reliance on undocumented custom code. These risks are prioritized based on their potential impact on operations or valuation. Where possible, remediation costs are estimated to give the acquirer a clear view of potential hidden liabilities. This step ensures that all identified issues are quantified and factored into financial and operational planning.

Three main deliverables summarize the findings of the review. First is an executive summary highlighting key findings, risks, and strategic recommendations in plain language for stakeholders. A full report provides detailed observations and technical analysis across all review domains. Finally, a risk register and action plan outline next steps, including prioritized tasks, estimated timelines, and a proposed roadmap for remediation or integration. These documents serve as a bridge between technical due diligence and actionable business planning.

After the acquisition, focus shifts to integrating the acquired IT environment into the parent organization. This includes stabilizing systems, retaining essential IT personnel, and executing a phased integration strategy. Redundant systems may be decommissioned, and long-term IT governance structures aligned. These post-deal actions are informed directly by the findings and priorities identified during the IS review.