Posted tagged ‘Due Diligence’

Discovery – The Art of Finding Reliable Data

June 13, 2009

There are only two kinds of application engineers: those who say
“Data is the problem” and those who say “Data are the problem.”

The infrastructure team was provided systems discovery information from a variety of sources including internal IT, contractors and key IT support vendors. The team was delighted to see “current-state” systems information. However, the team became concerned about the accuracy of the information because key application end client information was missing. The consolidation team decided to perform first hand verification of all “current-state” data. The program manager consulted with the sr management team and hired contract systems engineers with extensive application and desktop experience to review “current-state” discovery information and verify the information. In many cases, the contract network engineer had to reverse engineer networking equipment and actual protocols to obtain an accurate “current state” data. In addition, acquiring company subject matter experts were engaged to verify and document as-built server and storage system documents. For example, reverse engineering revealed the current state network documentation did not reflect actual configurations and existing routes. In another case, another key subject matter expert identified networking equipment was owned and maintained by telecom provider Sprint instead of by the company. Additional verification revealed remote access equipment had been partially configured and was unusable. The original project had been abandoned by the IT staff short of being fully configured for operations. Application verification and reverse engineering identified software code that had been written with network third party vendor addressing and communications hard coded into the software bypassing the data file inter-exchange through the company data interexchange server.

The verified “current state” was significantly different than the “current state ” provided by vendors and staff.

Lesson learned:

There is no hard-and-fast reliable information source. That would be too easy.

Advertisements

IT Contracts – Due Diligence

October 28, 2008

 

A Slight Misunderstanding

 

In one acquisition, a domestic technology outsourcing company was contracted to provide key IT services through a twelve month transition period.  Upon signature of the acqusition agreement, the integration transition team asked for the IT equipment access credentials.  The outsourced service provider, a well know M&A services leader, refused to provide the credentials.  The problem turned out to be a difference in interpretation of the contract agreements by the IT service provider subcontractors, also well known industry leaders.   The acquired company spent the next four months renegotiating the contract and the subsequent release of equipment access credentials. 

 

A review the transitional services contract revealed vague contract language with no enforceable service level agreements or “exit” clauses.  The acquisition company management team implemented a successful strategy of appointing key staff members to review all service requests and develop direct line relationships with the subcontracting IT service provider to ensure delivery of services.  The acquisition company had several large contracts with the subcontractor and had considerable financial leverage in driving service delivery.

 

Lesson learned:

 

All misunderstandings concerning contract specifications will eventually be resolved.  The best time to do that is before the acquisition agreement is signed. 

 

Tip: Hire dedicated IT contract M&A specialists to review, negotiate and (re) write all IT contracts prior to acquisitions. 

 

https://joetighe.wordpress.com