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Technology audits should involve a full sweep of business unit alignment

Written by corres2

Unfortunately, the technology team was unable to deliver quality financial reporting in a timely manner from their ERP solution. The recommendation was to outsource the helpdesk support and to hire data analysts to clean up the data and make it more accessible and actionable. This reshuffling of budget and resultant improvement in financial reporting led to an immediate, positive impact on cash flow.

The outside insight from a third-party technology provider also gave the IT director some much needed perspective and guidance.  

Workflow Inefficiencies

Technology due diligence can also provide a great deal of information about workflow processes and the way employees do or do not work well together. In one case, an Ashton audit revealed the technology platform was solid, but that there was a significant lack of trust between teams within the company. The lack of trust led to an immense amount of double checking and inefficiencies that accumulated as jobs moved from the order intake phase through to the shipping department. This unexpected insight helped the buyer understand where they would need to focus their immediate attention after the closing. 

Data Protection

Business data in all forms is valuable to you and to your competition: sales lists, marketing campaigns, formulas and related intellectual property – they’re all a form of modern currency. As part of the due diligence process, it’s critical to understand where this data lives and how it is protected: in the cloud? On premises? On company-owned devices or on staff-owned personal devices? How is the data controlled? How do you know if or when it moves?  

Compliance and Regulatory Requirements

Another major shift in focus relates to evolving state-level cybersecurity requirements. In some situations, these are currently voluntary (Ohio Data Protection Act), but in others (California Consumer Privacy Act), some businesses are forced to comply. Adding to this is a push by the insurance industry to require security best practices such as proper firewalls, endpoint security and data access policies prior to granting cyber, general or professional liability insurance. A proper due diligence audit will highlight potential risks and outline steps necessary for remediation. 

A thorough alignment plan will point out specific systems, processes or people which may pose a material risk to ongoing, profitable operations. As an example, we evaluated the technology for a consumer products firm targeted for a roll-up project. The leadership team at the target were unaware of security compliance requirements for several of their contracts, and as a result had none of the required systems or necessary security solutions in place. We provided budget options to the buyers and outlined the solutions required to mitigate the risks and to help them more appropriately value the acquisition based upon the potential risks. 

Shedding light on the technology platform during due diligence reveals far more about a company than just software and hardware. The results provide valuation guidance, staffing recommendations and budget planning to help ensure a smooth, profitable transaction.

Travis Grundke is executive vice president and director of operations at Ashton Solutions.  He can be reached at 216-397-4080 or [email protected]


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