1. Document Your Server & Network Inventory
Key takeaway: Maintain a living inventory of all physical & virtual assets so there are no hidden surprises post-close.
- [ ] Server & Network Inventory: Is there a complete inventory of all on-premise servers, network hardware (switches, routers, firewalls), and their age/warranty status?
- [ ] Performance & Reliability: Are there records of system uptime, performance bottlenecks, or recurring hardware failures?
- [ ] Scalability: Can the current infrastructure support projected business growth, or will immediate capital expenditure be required?
- [ ] Cloud Services: What cloud services (AWS, Azure, etc.) are in use? Review configurations, costs, and security settings.
- [ ] Backup & Disaster Recovery: Is there a documented and regularly tested backup and recovery plan? Where are backups stored, and how quickly can the business be restored?
2. Strengthen Your Cybersecurity & Risk Posture
Key takeaway: A single vulnerability can crater deal value—verify policies and recent test results.
- [ ] Security Policies: Are there formal, written cybersecurity policies in place? Are employees trained on them?
- [ ] Access Control: How are user access rights managed? Is multi-factor authentication (MFA) implemented on critical systems?
- [ ] Vulnerability Management: When was the last vulnerability scan or penetration test performed? Were critical issues remediated? According to the Verizon DBIR 2024, 32% of breaches involve unpatched systems.
- [ ] Endpoint Security: What antivirus/antimalware software is deployed on workstations and servers? Is it centrally managed and up-to-date?
- [ ] Incident History: Has the company experienced any security breaches or major cyber incidents in the past? How were they handled?
3. Rationalize the Software & Application Portfolio
Key takeaway: Map license costs & custom code risks early to avoid expensive technical-debt surprises.
- [ ] Software Licensing: Is all software (Operating Systems, Microsoft Office, industry-specific applications) properly licensed and documented? Are there risks of non-compliance?
- [ ] Proprietary/Custom Software: Does the company rely on custom-built software? Who developed it, and is the source code accessible and documented? This is a major area of potential technical debt.
- [ ] SaaS Subscriptions: Obtain a list of all Software-as-a-Service subscriptions (e.g., Salesforce, Slack, etc.) and their associated costs.
- [ ] Integration Points: How do the core software systems (e.g., ERP, CRM, accounting) connect and share data? Are these integrations stable and well-documented?
4. Evaluate the People & Processes Behind IT
Key takeaway: Talent gaps or over-reliance on single contributors are red flags for post-close execution.
- [ ] IT Team Structure: Who is responsible for IT? Is it an internal team, a single person, or an outsourced Managed IT Services Provider? (If the answer reveals a gap or risk, this is a key area where a strategic partner like Preferred Data can add immediate value).
- [ ] Key Personnel Dependencies: Is critical IT knowledge held by only one or two key individuals ("tribal knowledge")? What is the risk if they depart?
- [ ] Vendor Contracts: Review contracts with all IT vendors, including the MSP, internet service providers, and software providers. Note contract terms, costs, and renewal dates.
Your Strategic Partner in M&A Technology
Navigating IT due diligence requires deep technical expertise and an understanding of the M&A landscape. As your dedicated technology partner, Preferred Data specializes in providing this clarity. We move beyond simple checklists to offer comprehensive Technology Due Diligence services, delivering a detailed report that highlights risks, opportunities, and a strategic roadmap for post-acquisition integration and optimization.
An acquisition is a bet on the future. Let us help you ensure that bet is built on a solid technological foundation. Contact us today to discuss how we can support your next acquisition.
Frequently Asked Questions
- Why is technology due diligence so critical in small & mid-market deals?
Because IT flaws often only surface after the hand-over, impacting EBITDA and integration timelines. - How long does a typical technology due-diligence engagement take?
For SMB acquisitions Preferred Data can complete an assessment in as little as 10 business days. - What does an outsourced MSP like Preferred Data actually deliver during diligence?
A written report covering risks, remediation budget, and a 90-day post-close action plan.
Next Step
Need a partner to execute this? Schedule a free 30-minute consultation → /schedule-meeting.
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