Case Studies

A Securities Firm: IT Due Diligence

Client contact: MD of Private Equity Company
Parkwell staff: 2 consultants

Objectives and project background

A consortium was preparing to invest a substantial sum in a securities firm and therefore required that a due diligence exercise be performed on the target organisations IT infrastructure and resources.

There was a desire to expand the business by increasing the market share and by adding a number of new product lines.  The broking software and associated back office systems constituted the target’s major asset and it was important that these systems provide a robust basis on which to grow the business.

Anticipated benefits

Confirmation that the existing IT platforms were sufficiently scaleable.

Scope and boundaries

We reviewed the following:

  • The architecture of the applications, the majority of which had been developed in-house. This included details of the development tools used and the underlying database technology.
  • The methodologies used in the development of the applications.
  • Whether the existing software can form the basis for further development, such as adding additional product lines.
  • The scalability of the software. This included looking at the possibility of increasing the volume of transactions by a factor of 50.
  • The documentation of the applications and associated back office systems.
  • The functionality provided by the applications.


The intellectual property rights in respect of the applications were out of scope and handled by lawyers.

Deliverables

A report setting out Parkwell’s findings incorporating our conclusions and recommendations.

Project conclusion

The current IT department, infrastructure and software were adequate to operate the business and could support a reasonable increase in business volume of between five and ten times current volumes without significant additional capital investment.

The current hardware and software platform was a suitable base for further expansion and investment to support further increase in volumes.

 

 


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