We’ll start with the big question – what is technical due diligence?
Textbook (or in the below case, Google Gemini) definitions of “Technical Due Diligence” (Tech DD) go along the lines of:
“An exercise performed for a company to gain a comprehensive understanding of its technology assets, capabilities, and risks. This is critical because technology underpins business operations, competitive advantage, and future scalability.”
Generally, a Tech DD engagement with Elemental Concept aligns with this definition, and, crucial to our interpretation of a Tech DD, is the point: Technology underpins business operations, competitive advantage, and future scalability.
So when we, as a technology consultancy, think about the due diligence process, we’re not thinking about technology for its own sake. Instead, it’s about how technology (and that’s with a fairly broad interpretation of “technology”), along with the associated people and processes, form an ecosystem that can support the business. Importantly, it’s also about where that ecosystem is falling short, and the changes needed to mitigate any associated risks.
Why do businesses need Technical Due Diligence?
Technical Due Diligence is essential during major business events like mergers, acquisitions, and funding rounds. Buyers need to understand what they’re really getting, uncovering hidden costs, security gaps, and outdated systems that could drastically change a deal’s value. For companies raising money or going public, Tech DD proves their technology can actually handle growth and won’t fall apart under pressure. It shows investors and stakeholders that the tech foundation is solid enough to support future plans.
Companies also use Tech DD internally to spot problems before they explode. Regular assessments reveal security risks, outdated systems, and misalignment between technology and business goals. This helps leadership make smarter decisions about where to invest, what to modernise, and how to improve their technical operations. Think of it as a health check for your technology: catching issues early is always cheaper and less painful than dealing with a crisis later.
What’s involved in a technical due diligence engagement with Elemental Concept?
A typical Tech DD engagement might be structured in the following way:
- Agree scope
- Elemental Concept shares a prerequisites checklist with the organisation
- The organisation assembles the information requested in the checklist
- Elemental Concept arranges and facilitates a series of workshops
- Follow-up sessions
- Write up
- Engagement close down
There is a risk for all involved parties that a Tech DD could become a black hole for committed time. To manage that risk, we will agree a clearly defined scope and fixed price cost up-front.
To help define the scope, Elemental Concept has predefined templates for a Pre-Engagement Checklist and an Engagement Report. These serve as a starting point that can be refined to suit a specific engagement, ensuring it focuses on areas of particular interest or concern with a minimum investment of time from the organisation.
What information will I need to gather for the due diligence checklist?
The following is by no means an exhaustive list, but it gives an idea of the types of information you’ll be expected to provide for a tech due diligence session:
- Technology expenditure, including equipment, hosting, software and maintenance costs
- Partner and supplier information
- Organisational structures, including internal team capacity and performance
- Operational processes
- A full overview of your technology architecture, including software and hardware
- Security policies and penetration tests
- AI workflows and policies
- Regulatory compliance, data policies
The technical sessions can be intensive, and we prepare by thoroughly reviewing the provided documentation (the more, the better!). We always emphasise that it is more of a fact-finding exercise, and that we’re not there specifically to find fault.
What is the timeline for a technical due diligence process?
Typically, we kick off the engagement with an initial meeting to outline the process with the client and we will then arrange sessions that roughly align with the above sections over the course of two weeks. Depending on the complexity of the report, it will generally take an additional 2 weeks to compile.
What are the outcomes of engaging in a Tech DD with Elemental Concept?
Well, we’re a consultancy, so naturally our answer is going to be: “it depends”.
As a minimum, we will document our findings in an engagement report, including a prioritised list of issues and next steps. Other outputs may include additional document,s such as a UX review (depending upon the agreed scope).
We may also provide an executive summary report before completing the full version, highlighting any red flags. Further sessions may be needed to clarify some technical details, and once the final report is sent, we will have a session with the client to review the findings.
Arguably, for those involved in conducting the engagement, there is more value in being able to take some time away from the day job and spend time considering whether the status quo is really the best way to serve the business
