Tech Due Diligence - What Gets Frequently Overlooked

{ Following on from my article The 5 Quick Indicators of a Good Tech Org, I wanted to cover what is frequently missed during tech due-diligence. }

James Cook once said, "When your mind tries to verify a preconceived notion, you can miss the obvious." This observation holds profound relevance in the realm of technical due diligence during acquisitions, where the focus is frequently skewed towards confirming why the acquirer wants to buy. In the rush to validate anticipated benefits, there is a tendency to overlook fundamental aspects that can significantly influence the success of the acquisition. This article delves into the two commonly missed factors in technical due diligence – the volume of technical debt and the motivation of teams – exploring how the rush to confirm preconceived notions can lead to neglecting critical elements that are pivotal for seamless integration and sustained success.

Unearthing the Burden of Technical Debt

In the pursuit of acquisition, the due diligence process often becomes a checklist exercise, ticking off boxes related to technology, architecture, skills, and cost. Yet, the hidden menace of technical debt frequently eludes this scrutiny. Technical debt, akin to a shadow lurking in the system, can cast a long-lasting impact on the future trajectory of technology. It accrues over time, stemming from hasty decisions, quick fixes, and postponed maintenance, and can impede progress and innovation.

The challenge lies in the fact that technical debt is not always overtly visible, and its ramifications may only become apparent in the later stages of integration. Acquiring a company without a comprehensive understanding of its technical debt is akin to boarding a ship without knowing its structural integrity. The vessel may sail smoothly initially, but over time, the accumulated debt, like barnacles expanding on a hull, can cause disruptions, eroding the very foundation that the acquisition sought to build upon.

Motivation as the Ignored Catalyst for Change

Teams are the lifeblood of any organisation, and their motivation to adapt and evolve is a critical factor in the success of an acquisition. However, in the excitement of acquiring advanced technology and skilled personnel, the human element is often overlooked. The assumption that skills can be seamlessly transferred and technology integrated neglects the intangible but crucial factor of team motivation.

Assessing the motivation of teams is akin to deciphering the heartbeat of an organisation. Resistance to change, reluctance to embrace new methodologies, and attachment to existing processes can be subtle yet potent indicators of a team's disposition. Overlooking this human aspect can lead to dissonance between the acquiring and acquired teams, hindering the integration process and impeding the organisation's ability to capitalise on the acquisition's full potential.

The inherent challenge in addressing these overlooked aspects lies in the limited time allocated for due diligence. As the clock ticks, there is a natural gravitation towards the tangible and immediately apparent facets of the acquisition. Assessing the volume of technical debt and the motivation of teams necessitates a depth of understanding that is often challenging to achieve within the standard due diligence timeframe.

However, there exist indicators, or "smells," that can guide the discerning acquirer. Signs of technical debt may manifest in frequent system outages, delayed release cycles, or an unusually large support team. On the human side, indications of team motivation can be gleaned from employee engagement surveys, turnover rates, and the overall sentiment within the workplace.

The solution to navigating these challenges is to approach due diligence with a mindful checklist that consciously includes the assessment of technical debt and team motivation. Whether leading the acquisition charge or relying on a team of experts, ensuring these elements are integral to the due diligence process is paramount. These factors should be explicitly outlined in the terms of reference for those conducting the due diligence, providing a structured framework for a comprehensive assessment that goes beyond the surface-level examination of technology and skills.

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In conclusion, the words of James Cook resonate strongly in the context of acquisition technical due diligence. The rush to confirm preconceived notions can blind acquirers to the obvious but critical factors that underpin success. Beyond the immediate gains of acquiring advanced technology and skilled personnel, it is essential to consider the trajectory of the organisation, the adaptability of its technology, and the resilience of its teams.

The adage "acquire for the journey, not what will land in your lap as you set off" encapsulates the essence of a successful acquisition strategy. Technical due diligence should extend beyond confirming aspirations and delve into the unseen layers that can shape the long-term success of the acquisition. By acknowledging the presence and impact of technical debt and understanding the motivation of teams, organisations can embark on an acquisition journey with a holistic perspective, setting the stage for sustained success in the dynamic landscape of technology.