IT & Technology Due Diligence

Scalable cloud architectures, modern AI infrastructures and robust system landscapes are today core components of digital business models. Companies depend on highly available infrastructures, resilient platforms, modularly decoupled architectures and rigorous development and operating processes. The increasing use of AI raises the demands on system architecture, data paths, performance and security – and thereby on the ability to integrate new technologies in a structured way.

Context and relevance

A lack of scalability, technical debt, architectural bottlenecks or security gaps can jeopardise the investment case directly. An IT & technology due diligence creates transparency as to whether a company operates stably, securely and cost-efficiently today, can scale tomorrow, and is architecturally equipped for AI-based value levers and future growth requirements. This assessment is not a qualitative snapshot but is based on robust technical evidence: downtime analyses, architecture reviews and code assessments.

Our approach

FOSTEC & Company’s approach combines technical expertise with strategic thinking. We assess stability, security, scalability and future viability along a clearly structured analytical framework (see Figure 3: Areas of analysis of the IT & technology due diligence). In doing so, we rely on robust technical evidence, such as downtime analyses, architecture reviews and code assessments.

1. Tech architecture review

• Assessment of the cloud architecture, AI infrastructure and system-critical processes
• Analysis of the scalability and performance limits of the platform, systems and infrastructure
• Positioning against technological best practices and derivation of architectural risks

2. Technical debt assessment (technical debt score)

• Identification of technical debt, bottlenecks and development potential in architecture, code base and infrastructure
• Assessment of code quality, structure, documentation and extensibility
• Consolidation into a technical debt score as a basis for prioritisation and negotiation

3. Infrastructure cost analysis

• Assessment of the operating model and operational stability, including downtime analysis
• Analysis of infrastructure costs (cloud/on-premise), including scaling scenarios
• Assessment of technical governance along roles, responsibilities and decision-making logic

4. Security posture assessment

• Examination of technical and administrative security controls, including hardware-, software- and policy-based mechanisms
• Analysis of governance maturity, incident history and vulnerability risks, among others through open-source software solutions
• Derivation of a consolidated security posture assessment, including quick wins and structural measures

Figure 1: Areas of analysis of the IT & technology due diligence

The differentiating factor of this approach lies in combining technical depth of examination with strategic contextualisation: every finding is not only documented but assessed for its relevance to the investment case.

Results and impact

Clients receive a structured assessment of the target’s technological fitness – along the four dimensions of stability, security, scalability and future viability. The analysis provides a robust judgement of whether the company is technologically robust enough to support growth requirements, realise efficiency potential and sustainably activate AI-based value levers. For PE investors, the IT & technology due diligence thereby becomes the central basis for assessing technological risks and pricing them into the investment case.

While the Data & AI Due Diligence focuses on data quality, algorithms and governance, the IT & technology due diligence analyses the cloud architecture, AI infrastructure, system stability, scalability and technical debt of the entire technology platform – thereby closing an analytical gap that purely financial or commercial examinations do not cover.

Position within the service portfolio

The portfolio of due diligence services comprises offerings of varying scope and focus. FOSTEC & Company provides 360-degree due diligence services for the analysis of all business aspects:

• Commercial Due Diligence
• Digital & E-Business Model Due Diligence
• Technology, Data & AI Due Diligence
• Organization & Talent Due Diligence
• Merger & Acquisition (M&A) Advisory
• Value Creation & Exit Readiness
• Carve-out & Post-Merger Integration

Find out in a personal introductory conversation how FOSTEC & Company robustly assesses the technological viability of a target – get in touch with us.