During mergers and acquisitions, apparently inconsequential technological issues can materially impact the ultimate value of the business. So how can you improve the value of your business by driving up the value of its technology? These five simple tips help you navigate the process, but they don’t address more complex issues, like technical debt, undiscovered software defects, or privacy and security risks. Those issues require a separate evaluation and strategy.
Clean the Garage
When you sell your home, an orderly home and garage make it more tempting, procuring a higher price and better deal than the same house in a disorganized state would.
The same is true of a company’s technological house. All businesses accumulate technology they no longer use or need. Get rid of it. Spend a Friday hanging out with the technology team. Buy a pizza and clean it up. Get rid of old hardware, including printers, laptops, computers, servers, and phones that no longer work. Ditch storage, boxes, manuals, mice, broken monitors, and obscure connectors and cords.
Retain only those items you know you need and will use. If it doesn’t have value today, it won’t have value someday—especially not for new owners who want a streamlined, clean approach to technology.
Eliminate everything but what you know you have a definite need and direct use for. Resist, with great aggression, the notion that “this may have value someday.” It won’t, especially not for your business’ new owners.
Pictures illustrate that which can’t easily be described. If you don’t already have photos or drawings of your technical layout and architecture, now is the time to create them. These drawings communicate technical dependencies and relationships that can help your acquiring team better manage the technological side of your business. Be sure to include the location, names, and other details on the drawings. Use the same names on the drawings that are on your inventory lists.
Note that the drawings don’t have to be professional drawings. Simple diagrams or hand-drawn pictures, as long as they clearly convey accurate information, are perfectly adequate for most businesses.
Take a Technical Inventory
You need to know what you have, and the new owner must know what he or she is getting. You should already have a technical asset inventory. If you don’t, now is the time to create one. The inventory can be in a simple Word or Google Doc, or in an Excel spreadsheet. List software, servers, infrastructure and infrastructure systems, hand-held employee devices, and other key assets.
This list should also clearly explain the purpose of each asset. For example, list the server used for accounting purposes, the router that interfaces with remote offices, etc. Key software and hardware systems should also be listed on the sheet, with explanatory details as necessary. A detailed and current inventory will expedite the process of technical due diligence, and improve the way the acquiring team perceives your business.
Streamline and Manage Policies
Having detailed, effective technological policies communicates much about the operational condition of your business. These policies must be up-to-date, well-written, and organized. They increase compliance and assure the buyer that your organization is valuable and capable. Address passwords and security, software deployment procedures, backup policies, and similar topics. Particularly if your business participates in credit or other financial transactions, inadequate security creates immense risk in the eyes of the acquirer.
Before you begin due diligence, update and review policies and procedures that might be out of date. Document and fill in missing policies, and communicate any left incomplete to the acquirer.
The policies and procedures should be well-organized and in a common location, such as a folder on a company server or a list of Google documents. Every employee must be able to access these policies.
Streamline and Clarify Roles and Responsibilities
Your employees are one of your key assets during M&A. Your HR department must, at a minimum, have a list of staff and their job titles. That list alone, however, will not communicate vital responsibilities or technical expertise.
Your tech team has its own responsibilities and roles. A clear list should communicate which team member is responsible for each role so that the acquirer can easily understand and use your technology. Your list must also list systems itemized in other documents. This offers greater understanding and accessibility.