Identifying and harnessing digital value is crucial for driving growth and ensuring successful investments. As technology continues to rapidly evolve and mature, its importance in successful business models has become even more critical. For private equity firms, technology due diligence is now increasingly essential to minimise risk, maximise the value of investments, and drive growth aligned within the investment cycle. At Panamoure, we have developed a comprehensive Technology Due Diligence offering that goes beyond traditional assessments to focus on value creation throughout the investment lifecycle. Our nine-pillar approach is designed to protect and create value, providing private equity firms with the insights they need to make informed decisions and achieve exceptional returns.

Our Nine-Pillar Approach to Technology Due Diligence

Pillar 1.

• Current IT State
  • We begin by assessing the current state of the IT environment, including the people, processes, systems, and technologies that support the business strategy. This evaluation covers key value chain systems, supporting business applications, hosted infrastructure, IT organisation, and leadership capability. By understanding the baseline, we identify strengths and weaknesses that could impact future growth and performance.

Pillar 2.

• Platform Scalability
  • Evaluating the scalability and reliability of the technology stack is crucial for supporting future business growth. We conduct a thorough review of growth scenarios, supporting platforms, and corrective actions required to develop scalable solutions. This includes assessing disaster recovery planning, risk and impact analysis, and key personnel and supplier dependencies. Ensuring that the technology platforms can scale with the business is vital for long-term success.

Pillar 3.

• Platform Risks
  • Understanding the risks and opportunities associated with the technology platforms is essential for risk mitigation. We analyse disaster recovery plans, identify key risks and opportunities, and review dependencies on personnel and suppliers. This helps to prepare the business for potential critical failures and ensures that robust risk management strategies are in place.

Pillar 4.

• Platform Costs
  • Managing IT expenditure effectively can lead to significant cost savings and improved financial performance. We review the cost profile for IT investments, including Capex and Opex, and assess the potential for cost rationalisation. This involves analysing insource versus outsource headcount, identifying opportunities for cost savings, and enhancing revenue through efficient resource allocation.

Pillar 5.

• Compliance
  • Ensuring compliance with industry standards and licensing requirements is a critical component of Technology due diligence. Our review covers industry certifications, licensing audits, and adherence to development standards such as ITIL. We also conduct optional Black Duck audits for open-source software to identify potential compliance issues that could pose risks to the business.

Pillar 6.

• Digital Marketing
  • Digital marketing is a key driver of growth in the modern business landscape. We assess the digital tools and strategies used by the business, including websites, microsites, social media, and CRM systems. Our evaluation includes a review of UX/UI for customer-facing systems, the ROI and cost-effectiveness of digital marketing strategies, and the use of data to acquire and retain customers. By optimising digital marketing efforts, we help businesses enhance their market presence and drive growth.

Pillar 7.

• Digital Capability
  • Assessing the internal business assets, including people, processes, and systems, is crucial for driving digital initiatives. We review customer-facing systems, support processes, and third-party suppliers to ensure they align with the business’s digital ambitions. This includes evaluating customer feedback, market strategy, and the use of disruptive technologies to stay ahead of the competition.

Pillar 8.

• Digital Security
  • Protecting against cyber threats is essential for maintaining business continuity and trust. Our digital security review includes compliance with standards such as PCI, ISO27001, and GDPR. We assess the technologies and individuals responsible for safeguarding data and systems, and offer optional penetration testing to identify vulnerabilities. By implementing robust security measures, we help businesses mitigate risks and protect their digital assets.

Pillar 9.

• Value Creation
  • Value Creation, is the cornerstone of our Technology Due Diligence approach. This pillar focuses on identifying and realising digital value creation opportunities that align with the private equity investment thesis. Through a series of strategic evaluations and planning sessions, we ensure that digital initiatives are not only identified but also prioritised and executed effectively.

Delivering Tangible Results

Panamoure’s Technology Due Diligence offering is designed to deliver tangible results. By focusing on both value protection and creation, we provide private equity firms with a clear roadmap to optimise operations, reduce costs, and drive growth. Our end-to-end approach ensures that digital transformation initiatives are strategically aligned with business objectives, leading to enhanced performance and competitive advantage.

For more information, please contact Richard Hamerton-Stove – Partner, Data Strategy.