The way your IT due diligence checklist is formatted can have a surprising impact on how smoothly the due diligence process proceeds. During due diligence, many documents are being traded back and forth, whether or not a data room is involved.
In addition to the general categories and specific individual items you’re requesting, including a number of additional columns on the list can help things to be as efficient as possible.
The overall due diligence list, including other areas such as legal and financial, may have a numbering system, so you’ll need a place to identify the number or code assigned to each item on the list. This way, when the acquisition target is providing responses, they can let you know that they’re providing a document for "item 20" instead of "an inventory list of servers" that you’ll need to match up to the list.
Having a column on the list to simply track whether something has already been provided is a useful feature. Someone on the due diligence team should maintain the "gold copy" of the due diligence request list, and this allows everyone to see what information has been provided and what is still needed.
While it’s advisable to narrow down your IT due diligence requests to only the information that’s really required, some buyers prefer to use a standard list for all transactions. This can mean that many of the items won’t apply to a specific transaction, so having a column on the checklist indicating that the item isn’t applicable to the seller’s company can cut down on back and forth communication and let you know why something hasn’t yet been provided.
Many deals utilize a physical or virtual data room to store the documents for an M&A transaction. If this is the case for a particular acquisition, it’s helpful to track the data room location or file name for an item on the due diligence checklist. Again, someone usually has the "gold copy" of the list, and this is useful reference information.
Finally, tracking comments on the due diligence checklist, whether from the due diligence team or the party providing the responses, can be helpful. If an item hasn’t yet been provided, the comments can track when it is expected to arrive. If something needs follow up, or the due diligence team needs to consult an outside expert for further review of an item, the comments section is a great way to track it.
These tips can of course apply to the non-technology areas of due diligence as well. By tracking just a few more simple pieces of data, the efficiency and organization of a transaction can be significantly improved.