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  • Writer's pictureChelsea Wilkinson

Data due diligence is the next step on the digitalisation value chain

“Due diligence is due for an upgrade,” Douglas Laney argued in a 2020 Forbes article.

I agree.

Risk and value are wider and more complex than the traditional definers of due diligence. The stalwarts of financial, taxation, legal and commercial due diligence (CDD) – all of which are needed – must be supplemented with more specialist assessments of company value and potential.

Hence, I was delighted to see CDD giant Bain & Company's recent acquisition of Tech Economy – a specialist consultancy which helps investors assess the underlying technology of the businesses they are looking to acquire.

Hugh MacArthur, Bain’s global head of PE, said of their rationale: It has become critical for private equity investors to understand the technological infrastructure and processes of any digitally enabled business.

Again, I couldn’t agree more, Hugh!

Technology and digital DDs are vital to progressive investors seeking value insights, as I’m sure my colleagues at onefourzero, CG Consultancy (UK) Limited & Palladium Digital (to name a few) concur.

Yet, I would add that Data Due Diligence is then the next natural step along the digitalisation value chain.

After all, data and analytics assets can materially improve company decision making, optimise/automate operations and – in some instances – generate new revenue streams.

Plus, in a world where over 80% of corporate value comprises intangibles, it’s inevitable that a significant portion of this can be attributed to a business’s data.

So, why are data assets still being overlooked in due diligence?

And what other specialist areas should be included? I’m sure Lizzie Wills would add Policy DD?

What else?


Originally published on LinkedIn:


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