How to prevent unwanted surprises with a technical due diligence audit

Financial due diligence is a de facto assessment carried out when purchasing or investing in any software company.

Why is technical due diligence needed?

Eficode has been undertaking DevOps and software audits for many years now. During this time we have seen multiple cases where business-critical solutions have been in such a bad state that the only way to progress forward is to rebuild from scratch.

Technical debt and other typical challenges

Wikipedia defines technical debt as a concept in software development that reflects the implied cost of additional rework caused by choosing an easy (limited) solution now instead of using a better approach that would take longer. What makes it more difficult to understand is that technical debt is typically a hidden and abstract attribute.

  • Infrastructure, library, or framework updates are neglected.
  • Quality issues are neglected for prolonged periods.
  • Non-scalable architecture or technology selections are preventing future expansion.
  • Licensing issues requiring immediate investment either upon licensing or reimplementation.
  • In-house knowledge gaps limiting development speed and potentially lowering quality.
  • A lack of proper development processes and DevOps practices as an impediment for scaling of the development team, also affecting quality.

The technical due diligence process

Eficode’s technical due diligence is a professionally conducted software audit that takes due diligence aspects into account.

Stage 1: Review the current system

The starting point for a technical due diligence audit is to review the target company’s existing documentation and go through their currently used development setup.

Stage 2: Conduct interviews

We build on our understanding of the used system, processes, and tools by interviewing people at different positions in the target company.

Stage 3: Outline findings

Finally, we will write a report outlining our findings and Eficode’s view of the current technical state of the system.

Expected immediate cost impact

From the results of the technical due diligence, we will provide a monetary ballpark of the expected immediate cost impact to cover the now-visible technical debt.

Know what you are letting yourself in for

In this time of tech acquisitions, proceeding without undertaking technical due diligence would be like opening Pandora’s box. It is quite likely you will find technical debt slowing down development and requiring additional investment — but how much is that likely to cost?

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