What is the typical duration for a Technology Due Diligence assessment?
Typically, engagements last from 2 days to several weeks, depending primarily on 4 key factors: 1) the type of assessment, 2) the needs of the client, 3) the size of technology company assets, 4) where the assessment is performed, and 5) responsiveness of the participants. Here is how these factors influence assessment duration.
- Type of Assessment
DDP conducts Preliminary (prior to an offer sheet or letter of intent) assessments or Pre-closing assessments. Preliminary assessments are shorter in duration, since no deal has been established and target companies are unwilling to fully disclose the technology assets or customer base. Two weeks calendar time, and 2-5 days engagement time are required for most preliminary assessments. Pre-closing assessments require more detailed investigation and analysis, often including code reviews and customer reference checks. Pre-closing evaluations usually take three calendar weeks or longer.
- Client Needs
While DDP employs a standardized Technology Due Diligence Methodology (SM), clients require differing levels of investigation and analysis, depending most often upon the value of the investment or acquisition, the cost, and the available time. Evaluations based on demonstrations, architecture and design discussions, process reviews, and key management and staff interviews meet some clients’ needs. Others require complete code reviews, analysis of a company's infrastructure and operations, and customer satisfaction assessments in addition.
- Size of technology company assets
Size issues that determine duration are 1) organization size, 2) number and size of software products, 3) size of customer base, 4) number and size of services offered, 5) data center, network, and infrastructure size and complexity, and 6) number of locations.
- Assessment Location
Assessments performed on location at subject company offices incur travel expenses for the Do Diligence® team. Alternatively, Do Diligence® can perform engagements at its offices. The choice of location depends upon the depth and breadth of the evaluation and the cooperation of the subject company in uploading its confidential materials, including source code, to a secure FTP site provided by Do Diligence®.
- Participant responsiveness
Target company responsiveness is reflected in timeliness in providing needed materials, in responding to questions, and establishing timely interview appointments. Company help in contacting reference customers ahead of time often reduces time needed to gather customer satisfaction information. Target company and client responsiveness in meeting to review draft assessment documents and participate in Do Diligence® Presentations also contribute to reducing assessment duration.
What are the deliverables of a Technology Due Diligence engagement?
Do Diligence® Partners’ delivers a report, in draft and final form, and optionally a management presentation. A draft report is submitted to the engagement sponsor for review and comments prior to delivering the final report. At client request, draft reports are reviewed with the target company to ensure accuracy and completeness. The report assesses technology assets, focusing on strengths, business risks and critical success recommendations, providing a blueprint for immediate actions. Customer satisfaction engagements also focus on customer intentions because a customer could be satisfied but with no intention of continuing use of a product or service. The final report is reviewed with the client and, can be presented to an audience of the client's choice (for example, the Steering Committee, Board of Directors, etc.)
Will Do Diligence® Partners help implement report recommendations?
Yes. We provide Technology Improvement Assistance to help clients implement report recommendations. Examples of our wide range of services include working with management and staff to establish effective processes, defining position descriptions, interviewing and hiring management and staff, temporarily filling executive or line management roles in the technology organization, assisting in the reorganization of a technology group to achieve optimal effectiveness, developing a detailed product or service delivery plan, establishing a quality assurance organization and program, leading product requirements definition and design projects, and reviewing and redesigning an application’s data model.
How are Do Diligence® Partners engagements priced?
Technology Due Diligence engagements are quoted at a fixed price plus expenses, based upon engagement type, client needs, project size, and location. Technology Improvement Assistance engagement prices are based on daily or weekly rates, depending upon the nature of the project.
How much of a client's time is required to complete a Technology Due Diligence engagement?
Client time requirements depend upon the engagement type and duration. Client time is needed up front to help set the ground rules and define each engagement and to review the Statement of Work that defines the project. For long-duration projects, interim reports and/or meetings help to ensure each project meets client needs. We ask that clients review a draft assessment report. The client may optionally participate in a 3-way meeting with the target company and Do Diligence® Partners’ representatives to ensure report accuracy and completeness. A formal presentation to client management and staff may also be required.
What time commitment is required of a target company to complete a Technology Due Diligence engagement?
Target company management and staff time is dependent upon the type and duration of an engagement, but can be substantial. Target company management and staff time is required to collect and remit background materials, work with Do Diligence® Partners to setup and manage interview schedules, participate in demonstrations, interviews, and reviews, respond to questions during analysis and report writing, and, upon client request, review a draft report and participate in a report review meeting with the client and Do Diligence® Partners. Target company interviews are generally held onsite at the target company site, but may be conducted via WebEx or phone.
Who provides engagement services?
Unlike many consultancies who staff engagements with one or two senior and many junior staff, our engagements are staffed only with seasoned industry professionals who have the expertise and know-how that results from years of practical experience. Do Diligence® Partners' principals take direct responsibility for each engagement to ensure the highest quality results and the best value and service to our clients.
Why should I hire Do Diligence® Partners?
This question is best answered by our clients who say they repeatedly engage us because:
- Engagement teams are directed by Do Diligence® Partners Principals or Senior Associates with decades of management, industry, and technology experience.
- Our proven methodology and track record of conducting comprehensive, high value, on-time, and on-target evaluations.
- Our ability to match client requirements with our extensive network of industry experts
- Our ability to meet tight time frames imposed by the competitive financial marketplace or executive management directives.
But, don’t take our word for it. Contact us to receive a list of appropriate references.
How can I check references?
References are available on request. Please contact us directly so we may provide suitable references.
Does Do Diligence® Partners provide services outside North America?
Yes. We have completed engagements in India, Greece, France, The Netherlands, Belgium, Germany, Spain, Sweden, Australia, and the United Kingdom. We welcome engagements throughout the world.
Will Do Diligence® Partners advise me whether or not to invest?
We will not recommend for or against investment. However, we will provide key analytical information and recommendations that will help in the overall investment decision. The decision to invest in a technology or technology company results from careful analysis of key business areas, including technology, legal, financial, competition, and the marketplace. Do Diligence® Partners supplies critical product, people, process, patent, partner, marketing & sales and customer satisfaction information in the form of strengths, risks, success factors, and critical success recommendations. Our clients combine the information we provide with data they gather in the other business areas to make the most informed decision possible.
We often participate with members of the investment team in helping to formulate the most effective decision for our clients, and we welcome the opportunity to do so.
How can I submit my own question for the FAQ?
Please email us at info@dodiligence.com. We will answer questions individually, and will update this FAQ with the questions we believe are of general interest.
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