Technical Due Diligence: A Day in the Life of a Consultant

As a consultant specialising in technical due diligence, my role involves thorough assessments of a company’s technology stack, infrastructure, and software systems to help clients make informed decisions about mergers, acquisitions, or investments.

In this article, I’ll provide a glimpse into the daily activities and thought processes involved in performing due diligence that is technical. Through the lens of my diary entries, you’ll see how I assess code quality, security, scalability, and system integrations to uncover potential risks and opportunities for clients.

 

Day 1 – The Initial Meeting

 

·        8:00 AM – I’m gearing up for a new project, and today marks the start of the technical due diligence process for a potential acquisition. The client, a large enterprise looking to acquire a software development firm, wants to ensure the technology stack, codebase, and systems align with their strategic goals. As I walk into the meeting, I’m given a rundown of the company's infrastructure and its current technology landscape.

 

·        9:30 AM – After a brief introduction, we dive into the key goals. The client is particularly concerned about potential scalability issues in the target company’s software architecture. Their team wants to know if there are any major technical flaws that could affect the future integration or development of their systems. This is where the role of due diligence that’s technical becomes clear. It’s not just about identifying existing problems; it’s about ensuring the technology fits long-term business objectives.

 

Day 2 – Assessing the Technology Infrastructure

 

·        9:00 AM – Today, my team and I begin evaluating the core components of the software architecture. The focus is on the scalability, security, and performance of the current system. A thorough review of the codebase is the first step. We’re looking for any red flags, such as poorly written code, security vulnerabilities, or the use of outdated libraries.

 

·        11:00 AM – We also meet with the development team to understand the current tech stack. They’re using a mix of open-source tools and proprietary solutions, and we need to verify that the integrations are robust. Here, the importance of technical due diligence becomes evident.

 

 

Day 3 – Evaluating System Integrations and Dependencies

 

·        10:00 AM – We’re focusing on system integrations today. This is a pivotal technical part of our due diligence process. The target company has built their system to integrate with several third-party platforms, and we need to assess how well these integrations are functioning, and whether there are any dependencies that could cause issues during integration.

 

·        1:00 PM – One of the biggest concerns arises with some of the third-party APIs that the company relies on. If these external services experience downtime or change their terms, it could impact the target company’s operations. This is where a thorough technical analysis during the due diligence phase helps us foresee future problems before they arise.

 

Day 4 – Reviewing Documentation and Final Report

 

·        9:00 AM – We’ve gathered all the technical data we need, and it’s time to compile our findings. The next step is to create a comprehensive report that outlines our findings from the technical process of due diligence. We need to document the system’s strengths, weaknesses, and any potential risks. It’s not just about identifying problems, and recommending improvements.

 

·        11:30 AM – After reviewing all the collected data, we prepare the report for the client. It includes detailed recommendations for any changes or improvements needed, whether that’s upgrading certain components of the technology stack or improving code quality.

 

·        1:00 PM – The final step is to present our findings to the client. The technical due diligence report will be a key part of their decision-making process. If any critical issues have been uncovered, it will be up to them to decide whether they want to proceed with the acquisition or renegotiate the terms.