When acquiring a company, technology due diligence is a critical success factor. Here is a handy Technology Due Diligence Checklist.

1. Technical architecture review: Assess the overall technical architecture of the target company, including hardware, software, and network infrastructure. Verify that the architecture is scalable, secure, and aligned with industry best practices.
2. Intellectual property (IP) assessment: Review the target company’s IP portfolio, including patents, copyrights, trademarks, and trade secrets. Ensure that IP ownership is clear and that there are no infringement or licensing issues.
3. Software code quality analysis: Evaluate the target company’s software code’s quality, maintainability, and security. Conduct code reviews and utilize static and dynamic analysis tools to identify potential issues and vulnerabilities.
4. Technology stack evaluation: Examine the target company’s technology stack, including programming languages, frameworks, databases, and third-party tools. Assess whether the technology stack is modern, well-supported, and appropriate for the company’s needs.
5. Data management and security: Review the target company’s data management practices, including data storage, backup, and recovery procedures. Assess the company’s data security measures, such as encryption, access controls, and compliance with relevant data protection regulations.
6. IT governance and compliance: Evaluate the target company’s IT governance structure, including policies, procedures, and controls. Ensure the company complies with applicable industry standards, regulations, and best practices, such as GDPR, HIPAA, or SOC 2.
7. Cybersecurity assessment: Conduct a comprehensive cybersecurity assessment, including penetration testing, vulnerability scanning, and security audits. Identify potential risks and vulnerabilities, and evaluate the target company’s incident response and remediation capabilities.
8. Integration feasibility analysis: Assess the feasibility of integrating the target company’s technology systems with those of the acquiring company. Identify potential challenges and compatibility issues, and estimate the time and resources required for successful integration.
9. Technology team and talent evaluation: Review the target company’s technology team, including their skills, expertise, and experience. Assess the team’s ability to support the company’s current and future technology needs and determine whether additional resources will be required.
10. Product roadmap and innovation pipeline: Examine the target company’s product roadmap and innovation pipeline, including planned product enhancements, new product development, and R&D efforts. Evaluate the feasibility, market potential, and alignment with the acquiring company’s strategic objectives.
11. Vendor and partner relationships: Review the target company’s relationships with technology vendors and partners, including contracts, service level agreements, and dependencies. Assess the stability and quality of these relationships and their potential impact on the target company’s operations.
12. Customer and user experience: Evaluate the target company’s customer and user experience, including product usability, performance, and support. Assess customer satisfaction levels and the potential for customer churn or attrition.
13. Technology-related risks and liabilities: Identify and assess any technology-related risks and liabilities, such as pending litigation, regulatory investigations, or unresolved security incidents. Consider these issues’ potential financial and reputational impacts on the target company.
14. Technology budget and spending analysis: Review the target company’s technology budget and spending patterns, including capital and operating expenditures. Assess whether the company’s technology investments are appropriate and aligned with its strategic objectives.
15. Post-acquisition technology strategy and synergies: Develop a post-acquisition technology strategy that outlines the integration process, potential synergies, and any required technology investments. Ensure that this strategy aligns with the overall objectives of the acquisition and the acquiring company’s long-term technology vision.