Buy-Side Technology Diligence
Assessing technology risks, costs, and growth requirements for a private equity acquisition of a professional services firm.
- Engagement context
- 4–12 weeks, typical range
- Role
- Senior consultant
- Scope
- Professional services acquisition
What technology comes with the business?
Help a potential buyer understand a company’s technology before deciding to buy it.
A buyer is considering a company.
Before buying, they need to understand the technology they would be taking on and whether it can support their plans to grow.
At a glance
As a senior consultant, I worked with a technology diligence team supporting a private equity firm considering the acquisition of a member firm within a professional services network.
Our team assessed whether the technology environment could support the buyer's growth plans, what might need improvement, and the potential costs involved.
The buyer’s objective
The buyer's goal was to grow the business and eventually exit at a profit. That made technology investment an important part of understanding the opportunity.
The team needed to connect technical observations to practical questions: could the business scale, what investment might be needed, and could technology issues delay the buyer's plans?
Technology diligence engagements in my experience typically lasted four to twelve weeks.
My role
I worked with the diligence team to:
- Review materials in the virtual data room and develop an initial picture of the business and technology environment.
- Identify gaps and prepare interview agendas for the CTO, CIO, and CISO.
- Analyze technology spending and gather relevant benchmarks.
- Help develop the diligence report, connecting technical observations to business risks and potential investment needs.
My contribution to the team’s assessment was research, analysis, interview preparation, and report development.
What we assessed
We examined technology spending as a share of revenue and compared it with relevant benchmarks. We also reviewed vendor contracts, reliance on managed service providers, overlapping systems used by different teams, internally developed software versus third-party products, and cybersecurity status and potential issues.
These observations helped us identify questions for management and areas for further analysis. A difference from a benchmark or reliance on a vendor was not automatically a problem. We needed to understand the business context before drawing conclusions.
Why it mattered
The buyer needed to understand the technology investment required to improve operations and support growth. Spending, system complexity, vendor dependencies, or security issues could create additional costs or delay the improvements behind the investment plan.
The assessment helped make those requirements and risks clearer.
What I learned
The work helped me understand what makes a company scalable, and how technical debt, the operating model, and staffing affect its ability to grow.
It also taught me to connect technology findings to business questions: what needs to change, what it could cost, and how it could affect the buyer's plans.