COVID-19 impact
IT due diligence considerations and technology enablement for the future
This point of view on ‘IT due diligence considerations and technology enablement for the future’ is based on insights that Deloitte ToucheTohmatsu India LLP’s Transaction Services team has gained from multiple IT due diligences, IT separation support, and IT post merger integration projects.
The COVID-19 crisis has affected organisations across the globe and in India; several organisations are struggling to maintain a steady top line and manage with lower working capital. Employees’ health and safety is given utmost importance. Reduced travel across sectors meant that organisations have to adopt new ways of working, including WFH, which until now was implemented only in limited pockets.
M&A and fund raising deal activity is currently disrupted. However, once the lockdowns are relaxed and economic activity starts gathering some momentum, deals are likely to gain traction. In this context, the importance of IT diligence will increase. More organisations will be keen to understand the quality of technology that the target has adopted before finalising any deal.
Our interviews were aimed at understanding the impact of COVID-19, and how well organisations were geared to deal with such an emergency situation. The interviews covered eight representatives from the following sectors:
"IT has become the most prominent internal function in the aftermath of COVID-19, with business and other functions expecting IT services and support like never before. IT will truly become the backbone of business in the post COVID-19 period"
quoted one of the CIOs
Some key themes that emerged from the discussions are mentioned below:
Recover: Learn and emerge stronger
Mid-term priorities for CIOs: With chances of continued lockdown and its possible recurrence, CIOs are focused on key KPIs, such as productivity, quality, ramping up minimum essential infrastructure and IT staff (to meet increased demand), and provision of minimum essential IT security.
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Technology enablement will be crucial for growth of any business. M&A and fund raising deals, which often overlook technology diligence or delay it until late in overall M&A process, will be required to give utmost importance to evaluate a particular target’s technology needs and assess the investment required after closing the transaction.
