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HUMAN RESOURCES
Human resources
Due diligence scope
Reviewing human resources in a technology due diligence is important for several reasons:
Assessing technical expertise
Evaluating the human resources allows potential investors or acquirers to assess the level of technical expertise within the target company. This includes evaluating the qualifications, skills, and experience of the IT team members. Understanding the expertise of the human resources helps determine if they possess the necessary knowledge and capabilities to support the technology being evaluated and address any technical challenges that may arise.
Organizational structure and roles
Reviewing the human resources provides insights into the organizational structure and roles within the target company's technology operations. This includes understanding reporting lines, team structure, and distribution of responsibilities. Assessing the organizational structure helps potential investors or acquirers evaluate if it is aligned with industry best practices and if there is appropriate delegation of responsibilities and accountability.
Workforce stability and retention
Assessing the infrastructure helps determine if it is capable of scaling and supporting future growth. This includes evaluating factors such as capacity, bandwidth, storage, and processing power. Understanding the scalability of the infrastructure is important to ensure that it can accommodate increased demands as the business expands.
Capacity and workload
Reviewing the human resources helps assess the capacity and workload within the target company's technology operations. This includes understanding the number of IT personnel, their current workload, and their ability to handle the existing and future demands of the technology. Assessing capacity ensures that the human resources has sufficient resources to support the technology's ongoing development, maintenance, and support needs.
Team collaboration and communication
Evaluating the human resources provides insights into their collaboration and communication practices. This includes assessing how well the team works together, their ability to coordinate efforts, and their communication channels. Effective collaboration and communication within the human resources are essential for efficient technology operations and problem-solving.
Knowledge transfer and documentation
Reviewing the human resources helps assess the level of knowledge transfer and documentation practices within the target company. This includes evaluating if there are adequate processes in place to capture and transfer critical technical knowledge, maintain documentation, and ensure continuity of operations. Understanding the knowledge transfer and documentation practices is important to mitigate the risk of losing key knowledge or expertise when there are changes in personnel.
Human resources
High-level scope
IT team composition and skills
Number of full-time IT employees; Outsourced and contracted staff; Their roles and responsibilities within the organization; Their skill sets and technical expertise; Levels of certification and education; Training and professional development programs in place.
Management and leadership
The presence and effectiveness of IT leadership (CIO, CTO, IT Director); The experience and background of IT leadership; The strategy and vision provided by IT leadership.
Performance and morale
Employee satisfaction and morale within the IT team; The average length of tenure for IT employees; The turnover rate within the IT department.
Hiring and onboarding
Recruitment process for new IT professionals; Onboarding process for new employees; Time taken to fill open positions.
Workload
The workload of the IT team; Any signs of burnout or stress within the team; The balance between maintaining existing systems and developing new solutions.
Organizational structure
Reporting lines within the IT team; Collaboration and communication within the team and with other departments.
Budget and compensation
The budget allocated for IT personnel; Salary and benefits packages in comparison with industry standards.
Knowledge management
Documentation of systems and processes; Procedures for sharing knowledge and expertise within the team; Backup for key personnel - are there people who can step in if a key person leaves or is unavailable?
IT culture and innovation
The culture within the IT team; Openness to innovation and new technologies; The adoption of industry best practices.
Succession planning
Plans for replacing key personnel in case of their departure; The pipeline of talent within the IT team.