IT / Technology Due Diligence

Service description

Technology due diligence reviews a target's systems, software and security before you buy it. An expert examines the architecture, code quality, infrastructure, data and cybersecurity practices, vendor and open-source dependencies, and the engineering team. The review shows what the technology can do, what it will cost to fix or integrate, and what could go wrong.

Common industries

Applies to acquirers of software, internet, data-driven and other technology-reliant businesses.

ROI

Reveals the tech debt, key-person, and security risks that affect price and post-close cost — essential when the target is tech-heavy.

Benefit

Assess a target's technology, architecture, security, and team during a deal to surface risks and integration cost.

Why get it

A target's technology can hide costs and risks that its financial statements do not show, such as outdated systems, security weaknesses or reliance on a few key engineers. Knowing these before signing can change the price or the terms.

When you benefit

A one-time engagement during a deal's diligence period, sometimes followed by an integration plan after closing.

What it costs

Typically a project fee.

When you pay

Usually a fixed fee scaled to the size and complexity of the target's technology and the depth of review. Hands-on code or security testing costs more than a document-based review. Integration planning is often quoted separately.

Other costs

Specialist security testing or code analysis tools, legal review of software licenses, and later spending to fix the issues the review finds.

Risks to know

A review depends on how much access the seller allows, and a short deal timeline limits how deeply systems can be tested. Hidden security or licensing problems can become the buyer's after closing. Findings may force a price change or end a deal.

When risks arise

Findings surface during diligence, before the deal closes. Problems that go unfound often appear after closing, as breaches, outages or unplanned rebuilding costs.

The process

The provider requests documentation and interviews the target's technology and security leaders. It reviews architecture, code, infrastructure, data practices and security, and ranks the risks. The buyer receives a written report and uses it to negotiate and to plan integration.

Your commitment

The buyer defines which systems and risks matter most and secures the seller's agreement to give access. It provides the deal timeline and decides how findings will affect price, terms or the integration plan.

Documents to gather

• System architecture diagrams and a list of key applications
• Software licenses, including open-source components
• Recent security assessments and incident history
• Engineering team structure and key vendor contracts

Helpful reading

• Don't Acquire a Company Until You Evaluate Its Data Security — Harvard Business Review
• Cybersecurity Framework — NIST
• Cybersecurity for Small Business — Federal Trade Commission