In January of 2016, Bloomberg announced that 2015 was a record year for mergers and acquisitions and that the trend looks to continue into 2016. While the Bloomberg article focuses on large technology companies across the globe, the same market conditions are driving M&A activity in more traditional markets domestically, as well, including manufacturing and distribution. And, as the baby boomers retire over the next 15 years, the trend is likely to continue as many of them will need to find and attract buyers.

While these companies may not be software companies, many of them depend on a variety of software systems to run their businesses–ranging from managing supply chains to controlling factory processes to understanding cost drivers and profitability. If the software fails, it may be just as impossible to deliver product as if a manufacturing line fails.

At DHx Software, we strongly believe that all companies should consider conducting reviews of their software environments and IT systems as part of the standard annual cadence in order to identify risks before they impact business. We also think it’s a good idea to conduct software audits in preparation for selling a company because identifying and limiting risks associated with software is likely to lead to a faster sales process and potentially a more lucrative valuation.

A few key points to consider include:

• Which applications are key to your business and how old are they?
• Who developed those applications and who has the ability to step in if something goes wrong? How capable is this resource?
• Are the applications documented so that new developers can get up to speed quickly?
• What happens to your data if a key system goes down?
• How secure is your system against cyber threats and what happens to your data if you are hacked?
• Are all software licenses current and do you have the right to transfer them to a new owner?

Please let us know if you have questions or would like to have a conversation.