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M&A Technology Review SOP

Sub-procedure for Innovate pillar digital transformation

Overview

This sub-procedure defines the methodology for conducting technology due diligence during mergers and acquisitions. It evaluates the target's technology stack, infrastructure, applications, and technical debt to inform deal decisions and integration planning.

Scope

Pillar: Innovate (Digital Transformation) Service Area: M&A Due Diligence Related Services: Cloud Architecture, Digital Transformation

Prerequisites

  • M&A transaction announced or in progress
  • NDA executed with target organization
  • Due diligence access granted (data room, interviews)
  • Technology assessment scope agreed upon
  • Key technical stakeholders identified
  • Timeline aligned with deal milestones

Procedure

Step 1: Assessment Scoping

Objective: Define technology due diligence scope

  1. Scope Boundaries:
  2. In-scope technology assets and systems
  3. Depth of review (high-level, standard, deep dive)
  4. Integration vs. standalone operation plans
  5. Critical systems identification
  6. Focus Areas:
  7. Core business applications
  8. Infrastructure and cloud
  9. Data and analytics
  10. Development capabilities
  11. IT operations
  12. Resource Planning:
  13. Technical specialists required
  14. Interview schedule
  15. Access requirements
  16. Timeline and milestones

Duration: 1-2 days Owner: Technology Lead

Step 2: Architecture Review

Objective: Understand technology landscape

  1. Infrastructure Assessment:
  2. Data center footprint
  3. Cloud adoption and strategy
  4. Network architecture
  5. Compute and storage
  6. Disaster recovery capability
  7. Application Portfolio:
  8. Core business applications
  9. Custom vs. commercial software
  10. Integration architecture
  11. Technology stack analysis
  12. Application age and health
  13. Data Architecture:
  14. Data stores and databases
  15. Data warehouses and lakes
  16. Analytics and BI capabilities
  17. Data governance maturity
  18. Architecture Documentation:
  19. Current state diagrams
  20. Roadmap documentation
  21. Technical debt register

Duration: 3-5 days Owner: Solutions Architect

Step 3: Technology Operations Assessment

Objective: Evaluate IT operational capabilities

  1. IT Organization:
  2. Team structure and capabilities
  3. Key personnel and retention risk
  4. Outsourcing and vendor dependencies
  5. Skills gaps
  6. Operational Maturity:
  7. ITIL/ITSM adoption
  8. Monitoring and alerting
  9. Incident management
  10. Change management
  11. Problem management
  12. Service Levels:
  13. Current SLAs and performance
  14. System availability history
  15. Incident history and trends
  16. User satisfaction
  17. Support Model:
  18. Help desk capabilities
  19. Escalation procedures
  20. On-call coverage
  21. Vendor support contracts

Duration: 2-3 days Owner: IT Operations Lead

Step 4: Development Capability Assessment

Objective: Evaluate software development practices

  1. Development Organization:
  2. Team structure and size
  3. Skill sets and expertise
  4. Key personnel dependencies
  5. Contractor utilization
  6. Development Practices:
  7. SDLC methodology (Agile, Waterfall)
  8. Source control practices
  9. Code review process
  10. Testing practices
  11. CI/CD and DevOps:
  12. Automation maturity
  13. Deployment frequency
  14. Pipeline configuration
  15. Environment management
  16. Technical Debt:
  17. Known technical debt
  18. Legacy system dependencies
  19. Modernization needs
  20. Estimated remediation costs

Duration: 2-3 days Owner: DevOps Lead

Step 5: Vendor and Contract Analysis

Objective: Assess third-party dependencies and obligations

  1. Vendor Inventory:
  2. Critical technology vendors
  3. Contract terms and expiration
  4. Spend by vendor
  5. Vendor concentration risk
  6. License Review:
  7. Software licenses
  8. Cloud subscriptions
  9. Transferability analysis
  10. Compliance status
  11. Contract Risk:
  12. Change of control clauses
  13. Termination provisions
  14. Price escalation terms
  15. Lock-in concerns

Duration: 2-3 days Owner: Technology Lead

Step 6: Integration Complexity Assessment

Objective: Evaluate integration effort and risks

  1. Integration Scenarios:
  2. Full integration
  3. Partial integration
  4. Standalone operation
  5. Divestiture considerations
  6. Integration Factors:
  7. Technology compatibility
  8. Data migration complexity
  9. Application rationalization
  10. Infrastructure consolidation
  11. Cost Estimation:
  12. Integration project costs
  13. Ongoing operational impact
  14. Synergy realization timeline
  15. Technology investment needs
  16. Risk Assessment:
  17. Integration risks
  18. Business continuity risks
  19. Talent retention risks
  20. Timeline risks

Duration: 2-3 days Owner: Technology Lead

Step 7: Findings Report

Objective: Deliver technology due diligence findings

  1. Executive Summary:
  2. Technology health assessment
  3. Critical findings
  4. Deal impact and recommendations
  5. Integration cost estimates
  6. Detailed Assessment:
  7. Architecture evaluation
  8. Operations assessment
  9. Development capability review
  10. Vendor and contract analysis
  11. Integration complexity
  12. Risk Register:
  13. Identified risks with ratings
  14. Mitigation recommendations
  15. Residual risk assessment
  16. Financial Implications:
  17. Integration costs
  18. Technical debt remediation
  19. License and contract costs
  20. Synergy opportunities

Duration: 2-3 days Owner: Technology Lead

Deliverables

Deliverable Format Owner
Assessment Plan Word/PDF Technology Lead
Architecture Review Word/PDF + diagrams Solutions Architect
Operations Assessment Word/PDF IT Operations Lead
Development Assessment Word/PDF DevOps Lead
Vendor Analysis Excel Technology Lead
Technology DD Report Word/PDF (25-40 pages) Technology Lead
Integration Cost Model Excel Technology Lead
Executive Presentation PowerPoint Technology Lead

Quality Gates

  • Assessment scope aligned with deal objectives
  • All key documentation reviewed
  • Technical stakeholder interviews completed
  • Architecture diagrams validated
  • Integration scenarios analyzed
  • Cost estimates documented with assumptions
  • Report reviewed by engagement manager
  • Findings presented to deal team

Technology Due Diligence Domains

Domain Key Questions Risk Indicators
Architecture Modern? Scalable? Documented? Legacy systems, no documentation
Infrastructure Cloud strategy? Data center age? Aging hardware, no cloud
Applications Custom vs COTS? Age? Health? Old apps, no roadmap
Data Governed? Quality? Analytics? Siloed data, poor quality
Development Modern practices? Automation? No CI/CD, poor testing
Operations Mature? Stable? Monitored? Frequent outages, no monitoring
Vendors Diversified? Contracts healthy? Vendor lock-in, poor terms
Team Skilled? Stable? Scalable? Key person risk, skill gaps

Integration Complexity Factors

Factor Low Complexity High Complexity
Technology Stack Same/similar stack Different stack
Cloud Platform Same provider Different providers
Applications COTS/SaaS Custom applications
Data Clean, documented Siloed, undocumented
Integration API-based Tightly coupled
Team Experienced Key person dependencies

Last Updated: February 2026