Process Diligence

Implementation Partners provides operational Process Diligence™ services for Venture Capital firms, investors, and corporations who are acquiring other organizations through mergers and acquisitions (M&A). These investors benefit from our expertise in evaluating the current state and future potential of their intended acquisition’s business processes. The Process Diligence™ effort delivers a neutral assessment of the potential acquisition’s processes and value, with objectives of:

  • Providing input on the potential value of the acquisition by validating key statements and assessing risks
  • Identifying issues that may provide negotiating leverage

Delivering constructive proposals for integration priorities and process improvements that would strengthen those business processes to drive future performance in the event of a “go” decision.

The Process Diligence Approach

  • Pre-assessment: interviews with the acquiring organization’s team to identify key assumptions and assess initial information that the potential acquisition has already provided, tailoring the on-site assessment plan (below) to the situation
  • On-Site Assessment(s): tour of key processes and interviews of key leaders at the potential acquisition’s site(s), to include:
    • General condition, processes, practices, and morale in facilities
    • Assessment of process capability (performance v. customer requirements) data to demonstrate a history of sustainable process performance
    • Validation of positive control of supplier and process quality, including appropriate business process measures (dashboards/scorecards) and written procedures
    • Cross-reference of perceived operational capacity with commitments and projections that have been included in due-diligence financial calculations (i.e., the “sniff-test” to ensure the projected volume is reasonable), including high-level validation of reported Cost of Goods Sold (COGS)
    • Identification of opportunities, process changes, and/or initiatives that would be prudent to execute during and/or after acquisition to ensure maximum return on investment
    • Quantification of financial impact of identified issues (e.g., impaired inventory and potential improvements to COGS), to create negotiation leverage
  • Integration of results with the financial, market, legal, and other assessment functions (typically these are in-house expertise within the Venture Capital firm)
  • Post-Assessment Report: formal delivery of the recommendations for next steps, including both “go/no-go” and integration process improvement proposals

Related Process Diligence Projects: