Today, all companies depend on digital assets to conduct business. Organizations collect and store personal data of users for payment, marketing, and analytics purposes. They also collect sensitive data about their employees and families for payroll and benefits administration. Furthermore, the confidential information, transaction, and trade secrets of a company are contained in electronic records that could seriously impact the business’ value when compromised. That is why cybersecurity must be a crucial component of the due diligence process in business transactions, particularly mergers and acquisitions (M&As)
Breaches, hacks, and other cyber-attacks can severely damage a company’s reputation and even cause it to leave the business scene. To mitigate the risk faced by a modern business, they have to evaluate their possible M&A partner’s cybersecurity due diligence. To get a full picture of the IT security posture of a target firm, it is important to carry out a thorough review. Here are the things that must be considered:
It is important to check if the target company has been previously compromised. An organization that has suffered a cyber-attack may suffer another one in the future unless they take serious steps in addressing the root of the problem. Savvy companies use endpoint monitoring and network monitoring tools to detect a digital breach.
Current Cybersecurity Measures
Even if the target company has never been compromised before, it may still become a victim of a cyber-attack if it does not have proper IT security measures. Solutions like anti-malware, anti-virus, intrusion detection systems, firewalls, encryption software, and log management software can help in keeping confidential data protected. Additionally, it is imperative to ensure the target company is installing the latest security patches and updates regularly.
Dealing with Insider Threats
Insider threats are the main cybersecurity risk factor. Some studies reveal that more than 70% of security breach incidents are caused by insider threats like human error or disgruntled employees. Education programs and trainings are important in lowering the risk of insider threats. For instance, companies should have their employees learning how to recognize a phishing email and avoid plugging in any USB drive they find somewhere else.
Merging IT Security Efforts
Merging two organizations is quite complicated especially in terms of technical issues such as cybersecurity. They may have some overlap when it comes to software and staff members. But, the IT security merger should take place as soon as possible to ensure there are no blind spots during the transition.