Why You Should Prioritize Cybersecurity In M&A
Preparing your company’s Cyber security in M&A
Mergers and acquisitions are an important part of doing business, yet many entrepreneurs and corporate professionals who are familiar with the practice of scooping up another company have little to no idea what they’re talking about when it comes to IT security. This is important, as cybersecurity is an often-underdiscussed element of M&A that could ruin your entire investment if you don’t take it into account from the earliest stages.
Many mergers and acquisitions have crumbled in not
because of financial reasons but rather because digital security was considered
too late. Here’s why you should prioritize cybersecurity in M&A.
Cybersecurity
integration should be a key focus
Whenever you’re acquiring a new company, one of the first topics to be discussed is how you intend to merge their operations into your own without totally disrupting one or the other. While most business professionals understand this, they seem to have more difficulty understanding that you must take the exact same approach when it comes to cybersecurity. From the very get-go, officials are both companies need to be concerning themselves with how they intend to merge their digital security operations without even temporarily suspending either of them. Refuse to pay attention to cybersecurity early on, and the enticing company you just scooped up could prove to be nothing more than a serious security liability.
Begin by remembering the importance of due diligence; when you’re
considering acquiring a company, you need to do your homework. Obviously, this
means looking at their financial information and asking yourself which
personnel are essential, but it also entails asking about their current IT
security system. Don’t be afraid to have your cybersecurity experts come up
with a list of important questions which must be addressed by the prospective
accusation before you fork over your hard-earned cash. This is also an
important time to remember that any employees who you dismiss after acquiring a
different company could become security threats the minute they walk out the
front door.
It’s thus imperative to ensure that anybody who was hired by the old company but won’t be brought along to the new one has their access to your business network totally revoked. Forgetting to do this could lead to a nasty instance of revenge, and while that may be illegal, you’ll still be left with an IT fiasco on your hands as you attempt to get to the bottom of things.
Similarly, you should be ensuring that workers who are sticking around will have access to your new network, as locking out your newly-acquired hires is a terrible way to get them started on the right foot in their new workplace.
According to one report, technology acquisition is often one of if not the driving reason that companies acquire other businesses. Despite the fact that getting your hands on proprietary technology is one of the leading causes of M&As, however, almost nobody actually considers the cybersecurity in M&A risks that are associated with such a move.
Assemble your
task force
It’s thus worthwhile for almost every business involved in M&A to assemble a cybersecurity task force that is explicitly charged with smoothly handling the digital transformation that’s soon to occur. Sometimes, this may require bringing in outside experts, even if it’s only a temporary arrangement. While you may balk at the additional costs this strategy entails, it’s almost always worthwhile, as failing to have qualified IT professionals to rely upon when conducing M&A will inevitably lead to a data breach, security hazard, or disgruntled employee messing things up later on down the line.
Experts help but you need more
Don’t think that hiring experts is enough, either, as you’ll also be required to talk to your rank and file workers about the security threats they may inadvertently generate in this time of sudden change. Reviewing common cybersecurity tips could lead your average workers to catch an IT mistake long before it becomes a serious crisis for your company. If you lack the ability to educate them yourself, having an IT-focused seminar wherein current and soon-to-be-acquired workers are reeducated regarding IT basics can be a worthwhile strategy to pursue.
Your task force should be taking specific things into
consideration; what industry are you in, and what specific cybersecurity
threats will you have to deal with as a result of that? If the company you’re
merging with is from another commercial sector, or if you’re acquiring a
foreign company, you could be facing a unique set of cybersecurity issues that
others don’t have to concern themselves with. Finally, it’s of the upmost
importance to carefully manager sensitive consumer data and trade secrets as
the M&A process truly gets underway.
Don’t forget
about your customers
It’s no secret that keeping track of your data is getting harder and harder to do but legally required as Lilenfeld PC would have you know. This is true whether it’s your personal life or your professional career. The same is true when it comes to managing consumer data, especially since so much more of it is being generated these days than ever before.
It’s thus imperative to ensure that the company you’re acquiring has been properly managing sensitive consumer data, as failing to do so could render you liable for mistakes they’ve committed in the past. Always remember that when you scoop up another business, you’re also scooping up the data that they’ve been generating and vacuuming up these past few years.
Get customer content, it’s essential
You may need to obtain consumer consent to use certain private information, for instance, and could face steep fines if you don’t do what’s required. Even keeping hold of sensitive employee medical information after you’ve dismissed someone in the wake of a merger can endanger your company’s reputation and financial wellbeing.
Carrying out regular data audits in the wake of M&A projects is thus incredibly important, so don’t think this is an area where you can cut costs. More than anything else, due diligence and careful preparation will save you. Prioritize cybersecurity from the very get-go whenever you’re consider a merger or acquisition, and your business will avoid the worst possible scenarios that have sunk countless other commercial operators.