While cybersecurity has long been an important component of IT diligence, the increased use of digital platforms, payment methods, and intellectual property (IP) drives a need for deeper assessments of an organization’s readiness to external threats.
Cybersecurity considers all aspects such as internet-facing web applications that may serve as an entry point to the network and other systems, software packages that contain inherent security vulnerabilities, and software development groups that don’t always have secure code development training and tools to meet specific regulatory requirements.
On the infrastructure side, cybersecurity looks at networking devices that could be inadequately configured to protect IT infrastructure, network and systems architecture that could introduce vulnerabilities inadvertently, and servers and workstations that could be susceptible to cyberattacks due to insufficient vulnerability and patching processes.
For a more in-depth look at the role cybersecurity due diligence can play during a transaction, read our article.
From a business perspective, enterprise risk management doesn’t always adequately address cyberthreats. Employees might not be aware of the phishing threats. Incident response and disaster recovery plans might not exist, and aren’t always properly drafted to assist with timely recovery following a security incident or disastrous event. Security organization isn’t always staffed or structured to meet regulatory requirements and address security needs.
All these factors could influence a company’s decision to accept the risk of a target business. Incorporating cybersecurity and IT due diligence learnings into your organization’s structure before the buyer takes ownership could be vitally important.