IT Due Diligence

What Is An IT Due Diligence?

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An IT due diligence is focused on companies that are not software companies and are instead more tech-enabled companies. While the company may still have a software product or a line-of-business tool they build, software building is not their primary core business. There are some overlaps between IT and tech due diligence. The former focuses on technology as an enabler for the business, enterprise architecture, data flow, and LOB tools.

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An IT due diligence is an exploration of a potential company (i.e. target) against a specific investment thesis. This would include the IT infrastructure, processes, data, reporting, LOB tools, and Cybersecurity.

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The goal of IT due diligence is to assess risks that can get in the way of the investment thesis and surface potential surprises. 

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Ultimately, the assessment would advise the investor on whether the thesis is possible or not. In the cases where it is possible, it would identify substantial risks and how to mitigate these.

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An IT due diligence could have three potential outcomes:

• Not a great investment based on the thesis

• Good investment, but risks must be mitigated in value creation

• Great investment and some optimization opportunities exist

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The best IT due diligence would also go above and beyond to explore opportunities to do things better, more efficiently, faster, and with less cost. These would be quantified against value creation levers. This would have a positive effect not only on the investment outcome but also on the EBITDA and exit multiples expansion.

 

Great IT due diligence should also be data-driven with quantifiable benchmarks that feed into the value creation cycle for maximum benefits. It should also identify immediate risks as well as potential future risks with an eye for an exit.

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What Is Inside An IT Due Diligence?

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The IT due diligence process takes a pragmatic and strategic 360 holistic approach. The comprehensive view helps with checks and balances and allows different angles to get a more accurate view. 

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The core IT due diligence includes business strategy, IT strategy, roadmap, team capabilities, ability to execute, LOB tools, productivity tools, data strategy, reporting insights, organization, cybersecurity, and leadership.

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What Makes Us Different?

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Years of execution experience working with investors and companies, and hands-on with teams globally, provide us with a competitive edge.

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Our approach combines humans, machines, and tools. Our team comprises senior technical experts such as CTOs, and CIOs with solid business acumen complimented by proprietary software, industry, and best practices data to help us to deliver the best value for our clients with a pragmatic focus on practical risk mitigation and value creation.

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Diligence packages are tailored based on the target situation, stage, size, revenue, maturity, and, more importantly, the investment strategy and goals. We help you decide which package is best for your situation.

Whether it is a stealth mode that requires an outside-in approach, a competitive deal with limited access and a compressed timeline, or standard due diligence, we offer multiple products ranging from outside-in to full diligence to accommodate your needs.

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We Move Fast And Accommodate Fast-Moving Deals.

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IT Due Diligence Core Offerings

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Outside-In Stealth - IT Due Diligence (~ 1-3 weeks)

An outside-in approach to validate the thesis, confirm interest, and answer specific questions

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When to Consider?

• You have an initial interest in a company and exploring

• You are in discussion with a company, but no commitments on either side

• You need a high-level validation to limit future effort and spend

• You are interested in a minority interest and need a high-level validation

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Extended Report - IT Due Diligence (~ 3-4 weeks)

Full in-depth diligence IT due diligence with full risks and opportunities backlog, mitigations, industry benchmarks, best practices benchmarks, costs optimization opportunities, and a value-creation roadmap

 

When to Consider?

• Do you have an LOI in place or soon to be?

• You are in exclusivity or have a healthy access

• You prefer in-depth risks, opportunities, and value-creation options

• You would like complete documentation of the functional areas in depth

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Standard Report - IT Due Diligence (~ 2-3 weeks)

The scope is identical to the Extended report without a lighter touch on the amount of supporting documentation.

 

Full in-depth diligence IT due diligence with full risks and opportunities backlog, mitigations, industry benchmarks, best practices benchmarks, costs optimization opportunities, and a value creation roadmap

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When to Consider?

• Do you have an LOI in place or soon to be?

• You are in exclusivity or have a healthy access

• You prefer in-depth risks, opportunities, and value-creation options​

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Summary Report - IT Due Diligence (~ 2 weeks)

The scope is identical to the Extended report, with minimal depth in supporting documentation and value-add content.

 

Full in-depth diligence IT due diligence with core risks and opportunities, industry benchmarks, best practices benchmarks, costs optimization opportunities, and a value creation roadmap

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When to Consider?

• Do you have an LOI in place or soon to be?

• You are in exclusivity or have a healthy access

• You prefer in-depth risks and opportunities

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Redflag Report - IT Due Diligence (~ 1-2 weeks)

High-level red flag thesis validation with top risks

 

When to Consider?

• Do you have an LOI in place or soon to be?

• You are in exclusivity or have some or a healthy access

• You have minimal time and need a quick red flag

 

Competitive - IT Due Diligence (~ 3-5 weeks)

Combined standard and stealth diligence. Full in-depth IT due diligence with full risks and opportunities backlog, industry benchmarks, best practices benchmarks, cost optimization opportunities, and a value creation roadmap with extended time to accommodate access challenges. 

 

When to Consider?

• You are in discussion with a private or public company

• You are part of a competitive process with other bidders

• You have limited access or some basic management access