The document provides an overview of IT due diligence for mergers and acquisitions. It discusses the steps involved, including identifying key issues to evaluate such as technology ownership, quality, expenses, and employees. The due diligence process aims to uncover any issues that could impact a deal and gather needed integration information. The document also includes sample sections of an IT due diligence report and emphasizes the importance of integration planning after a deal is completed.

1. IT Due Diligence Overview
Jim Hoffman
www.ITDueDiligenceGuide.com

2. IT Due Diligence
 Introduction
 Due Diligence: Step by Step
 Four Key Areas
 Other Important Business Issues
 IT Due Diligence Report
 Integration
 Q&A
Copyright © 2015, Alzhan Development LLC. All rights reserved.

3. Introduction
 My background
 20+ IT due diligence transactions
 $50K to $375M USD
 US-based
 Origins of the book
 Real-world approach
Copyright © 2015, Alzhan Development LLC. All rights reserved.

4. Due Diligence: Step by Step
 What is due diligence?
 “The process through which a potential
acquirer evaluates a target company or
its assets for an acquisition.”
 Survey shows increasing importance of IT
due diligence
Copyright © 2015, Alzhan Development LLC. All rights reserved.

5. Due Diligence: Step by Step
 Two broad goals:
 Identify any issues that could impact the
deal
 Gather the information you need for
integration if the deal goes forward
 Strategic goal of the transaction is key
 Integrated acquisition?
 Status quo with new owners?
 Bring the principals on board?
Copyright © 2015, Alzhan Development LLC. All rights reserved.

6. Due Diligence: Step by Step
 Connecting with the Buyer
 Networking
 Unsolicited offers
 Starting the Conversation
 NDA / confidentiality agreement
 Involve an attorney
 Informal Due Diligence
 Big picture
 Broad financial projections / product plans
Copyright © 2015, Alzhan Development LLC. All rights reserved.

7. Connecting with the Buyer
 Letter of Intent
 Outline of the deal
 Price
 Additional advisors
 Pre-Meeting Due Diligence
 Business and technical contacts
 Review of public information and prior due
diligence
 Provide IT due diligence checklist
Copyright © 2015, Alzhan Development LLC. All rights reserved.

8. Starting the Conversation
 The Onsite Visit
 Employee interviews
 Product demos
 Observations from walking around
 Due Diligence Report
 Daily updates
 Structure your notes in report format
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9. Four Key Issues
 Technology Ownership
 Quality
 Expense Identification
 Employees
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10. Four Key Issues: Ownership
 Does it really exist?
 Does it really work?
 Own the rights?
 Source code availability
 Source code review
 What’s in the works?
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11. Four Key Issues: Quality
 Was it built the right way?
 Scalability
 Maintainability - who wrote the code?
 Standard or proprietary technology?
 Documentation
 Security and compliance
 Backup / recovery / business continuity
plans
Copyright © 2015, Alzhan Development LLC. All rights reserved.

12. Four Key Issues: Expense Identification
 Software licensing
 Deferred equipment maintenance or
replacement
 Poor supplier contracts
 Salary structure
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13. Four Key Issues: Employees
 Key employees and flight risks
 Cultural issues
 Bureaucracy
 Hiring strategy
 Development methodologies
 Work environment
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14. Other Key Business Issues
 Software expense capitalization
 Change of control provisions in contracts
 Pending lawsuits
 Customer references
 Key suppliers
 Domain names, social networking
accounts
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15. IT Due Diligence Report
 Sample included with the book
 Due diligence team may have a
standard
 Scoring systems: yes or no?
 Include:
 Technology summary
 Risks and opportunities
 Required expenses
 Overall recommendation
Copyright © 2015, Alzhan Development LLC. All rights reserved.

16. Integration
 Staffing planning
 Achieve anticipated expense reductions
 Head start on developing integration
plan
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17. Free IT Due Diligence Checklist
 125 Questions
 Addresses IT Staff, Products and Services.
Cybersecurity, Network Infrastructure and
More
 http://www.itduediligenceguide.com/it-
due-diligence-checklist/
Copyright © 2015, Alzhan Development LLC. All rights reserved.

18. Q&A Contact Information
 Jim Hoffman
 jhoffman@itduediligenceguide.com
 http://www.ITDueDiligenceGuide.com
 Twitter: @jim_hoffman
 www.linkedin.com/in/itduediligence
Copyright © 2015, Alzhan Development LLC. All rights reserved.