IT Systems Aren’t Evaluated by Takeover Artists?

Bob Turek — Fri, 21 Dec 2007 10:00:54 +0000

Having been in the technology-enablement-of-business-processes industry for over 20 years I’m still amazed that the value of excellent IT systems and underlying data is not recognized. The latest example of this is in CFO magazine’s article on new software and services that help companies assess the IT assets of acquisition targets. Bruce Richardson of AMR revealed that “IT systems are the last things managers focus on” largely because of the time it takes to evaluate IT assets.

Lack of evaluation leads to lack of understanding that bad underlying data creates information and reports that mislead acquiring companies. I go back to a manufacturing example where bills of material have to be 100% correct in order to use planning technology properly. The reason is that one wrong bill of material can provide wrong planning in many areas. Even after explaining this problem, with examples, people would ask if 95% data accuracy was good enough.

So, it is not only the IT system functionality that must be assessed but the quality of the data going into the systems. The good news is that companies like Patni, Oco and others are developing software solutions to eliminate this “blind spot”. Are you considering an acquisition without evaluating the IT systems and underlying data of your target? Do you have an experience where a bad system or data resulted in misleading evaluation information?