What software assurance means for M&A

Organizations are becoming increasingly reliant upon software to operate efficiently and remain competitive. If businesses can not build the technology quickly enough, they will instead acquire it.

That is why when it comes to tech acquisitions businesses can no longer buy a black box. The reason being technical interviews and documentation reviews fall short and fail to provide the necessary insights for M&A teams to understand critical software assets.

Transparency into tech investments is a crucial component of transactions, mergers, and acquisitions. Organizations need to analyze the source code, derive fact-based insights, and make informed decisions derived from hard data. They need complete transparency into the application landscape – they need software assurance.

Software assurance empowers organizations to de-risk acquisitions and accelerates value creation. M&A teams can mature their IT Due Diligence process and identify application compatibility, quantify technical debt, and assess the condition of the software. Fact-based analysis can inform valuations and help plan post-merger integrations.

For buyers, the source code of a potential acquisition or partnership can be scanned to validate investment discussions, understand tech alignment, and quantify the quality of a seller’s code. Additionally, they can prepare IT for the technical requirements post-merger and be aware of both the inherent security and legal risks.

For sellers, good quality software can empower leadership to communicate to the market (owners, investors, and partners) with confidence in their capacity to deliver new features on time. When it comes to investment discussions software assurance can shorten the IT due diligence process and increase an organization’s valuation.

Software assurance is a huge step forward for the mergers and acquisition market. It gives buyers and sellers the data-driven insights they need to de-risk tech acquisitions and accelerate value creation.

One of our principal consultants who has helped deliver hundreds of IT DD’s had a recent discussion regarding the merits of organizations who mature their IT DD process and shares a few war stories that helped our clients not only uncover the hidden risks but also the hidden opportunities that seller’s can be even be unaware of.