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As a buyer, a thorough assessment of a target company’s technological security is crucial to minimizing risk and maximizing your investment. This guide details five essential aspects to examine carefully during your due diligence, along with five negotiation strategies .
1. Access management and identity control internally and at suppliers
Inadequate access control can expose the organization to significant internal and external risks. Carefully evaluate:
– Identity and access management policies and procedures
– The use of multi-factor authentication
– The complete list of vendors with access to data or systems
– Access revocation processes upon employee departure
– The implementation of role-based access control (RBAC)
– The use of privileged access management (PAM) solutions
Important note: Estimate the cost and time required to implement robust access controls if those in place are insufficient .
Tip: The security of the target company also depends on that of its partners. Examine:
- The risk assessment and management processes related to suppliers.
- Suppliers' compliance with security standards.
- The contracts and security clauses with these suppliers .
2. Assessment of the current security infrastructure
An outdated or poorly configured infrastructure can represent a major risk and unexpected post-acquisition costs. Carefully examine:
– The status and configuration of firewalls
– The segmentation and security of internal networks
– The updating and security of servers
– Identity and access management systems.
Important note: Evaluate the potential cost of upgrading the infrastructure if it proves inadequate. These costs must be factored into your purchase offer .
3. Compliance with security and data protection regulations
Non-compliance can lead to significant financial penalties and reputational risks. Carefully verify:
– Compliance with Quebec’s Bill 25 and other applicable regulations
– The existence of adequate data protection policies
– User consent and preference management mechanisms
– Data breach notification processes.
Important note: Estimate the potential costs of achieving compliance if any deficiencies are identified. These costs can be significant and should be negotiated as part of the transaction .
4. Evidence of safety certifications frequently requested by the industry
Just like you, customers and suppliers are concerned about the information shared with you. They will likely ask for proof that you meet the criteria for certifications popular in certain industries, such as SOC in software.
Important note: Estimate the potential costs and time required to obtain these certifications. These costs can be significant and should be negotiated as part of the transaction .
Tip: Customers sometimes agree to sign contracts when they know that the supplier has started the procedures to obtain certification in the following months .
5. Incident Response and Business Continuity Plan
The company’s ability to respond effectively to incidents and maintain operations is crucial. Examine in detail:
– The existence and quality of the incident response plan
– Data breach notification procedures
– Data backup and recovery mechanisms
– The business continuity plan and associated test results
– Staff training on emergency procedures.
Important note: Assess the potential cost of implementing or improving response and continuity plans if they are inadequate .
Tips: Five evaluation and negotiation strategies
To optimize your acquisition, consider the following strategies when negotiating with the seller:
- Independent technology and cybersecurity audit : Insist on conducting a security audit by an independent third party as part of due diligence.
- Conditional clauses : Incorporate clauses into the purchase contract that make the final price conditional on the resolution of specific security issues.
- Transition period : Negotiate a transition period during which the seller remains responsible for certain aspects of technology and security.
- Guarantees and compensation : Obtain specific guarantees regarding security and compensation clauses in case of undisclosed problems.
- Adjustable purchase price : Consider a price adjustment mechanism based on the results of post-acquisition security audits.
Conclusion
A thorough assessment of these five critical aspects of technological security is essential to minimizing risks and optimizing your investment when acquiring a business in Quebec. Each identified weakness represents not only a risk, but also a point of negotiation to adjust the purchase price or obtain additional guarantees.
Don’t hesitate to call on cybersecurity experts to assist you with this critical assessment. Their expertise can help you identify hidden risks and accurately evaluate the potential costs associated with post-acquisition security upgrades.
Secure your investment: Contact Data Next Step, your expert cybersecurity partner, for a comprehensive assessment and strategic advice. Our expertise will guide you through this critical process, ensuring a secure acquisition and maximizing the value of your investment.
