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As a 20+ year dental IT veteran who has led IT diligence on over 250 practices totaling approximately $1 billion in acquisition value, I’ve seen firsthand the IT pitfalls that can haunt what appeared to be a promising deal. Here’s how to navigate them effectively.

Conduct Thorough IT Diligence
Many practice buyers underestimate the importance of IT diligence. It’s crucial to assess the current state of IT infrastructure before finalizing the purchase. Often, significant investments are needed within the first year to stabilize and upgrade the practice’s IT systems. By identifying these needs early, you can adjust the purchase price to reflect necessary upgrades, avoiding unplanned capital expenditures later.

IT diligence should include a comprehensive review of all hardware and software systems in place, evaluating their current condition and expected lifespan. This process should involve a detailed inventory of servers, workstations, networking equipment, and critical software applications. Moreover, it’s essential to identify any gaps in IT capabilities that could impact the practice’s operations post-acquisition.

Look Beyond Digital Equipment
While advanced digital tools like CBCTs, 3D scanners, and printers are important, they shouldn’t overshadow the evaluation of core IT infrastructure. Practices may have impressive digital equipment but outdated servers, computers, and networking gear. A superficial diligence process that focuses only on digital tools can lead to costly surprises. Ensure a comprehensive assessment that includes all IT components.

An effective evaluation should account for the presence of advanced digital tools and the supporting infrastructure that ensures these tools operate efficiently. For instance, a practice might possess state-of-the-art imaging equipment, but if the network bandwidth and storage solutions are inadequate, the full potential of these tools cannot be realized. It’s crucial to assess the compatibility and integration capabilities of new digital tools with existing IT systems.

Prioritize Cybersecurity
Cybersecurity is often overlooked during acquisitions, but it’s a critical area. Many individual practice breaches go unreported. This results from a lack of understanding of the responsibilities when a security incident occurs. Additionally, most of the dental industry still utilizes small IT providers, which often lack the resources to handle security incidents effectively. An unreported breach or ongoing compromise can become a major financial and reputational liability. Ensure your cybersecurity policies cover incidents that occurred before acquisition and have a robust plan to address potential threats.

A robust cybersecurity assessment should include reviewing current security measures, such as firewalls, antivirus software, and data encryption practices. It’s also essential to evaluate the practice’s compliance with regulatory standards, such as HIPAA, and to identify any vulnerabilities that could be exploited. Implementing regular security audits and training for staff on best practices in cybersecurity can significantly mitigate risks.

Trust but Verify
Leverage the practice’s current IT provider to gather initial data, such as equipment specs, age, operating systems, and software versions. However, it’s essential to verify this information independently. The quality of IT providers varies, and relying too heavily on an unvetted vendor can lead to inaccuracies. A thorough, independent verification process ensures you have a clear and accurate picture of the practice’s IT health.

This verification process should involve cross-checking the provided data with independent audits and assessments. Engaging an external IT consultant or firm to perform a detailed review can provide an objective perspective and uncover potential issues that may have been overlooked. This step ensures that the information used to make acquisition decisions is accurate and reliable.

Addressing these key areas can ensure a smoother acquisition process and set your new dental practice up for long-term success. Investing time and resources in thorough IT diligence upfront can save significant costs and headaches down the road.

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