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Digital Due Diligence: Understanding the Real Digital Potential of your Investment
November 15, 2018
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Whether you are an investment company, private equity, venture capital or angel investor considering a new business or deep in the process of turning one around, understanding the digital potential is crucial. Discover why digital due diligence puts you in the driving seat, enabling you to make informed decisions on organisation and infrastructure…

As an investment firm, you may be used to investing in products and services across a multitude of verticals, such as Luxury, Fashion, Beauty, Retail, Hospitality, Wine & Spirits, Food & Beverages, etc. Nowadays, because of new consumer behaviours, all businesses are (or should be) digital businesses. That’s why it’s vital to get specialist expertise to guide you through the pitfalls of assessing a company’s actual digital strength and potential.

The risk of overlooking digital

Investment firms are used to assessing the value of a business by auditing its financial and commercial dimensions. As a result, most of them will focus their attention on financials, commercials and senior executive talent. This is obviously a valid and foundational approach.

However, often, what isn’t considered is the digital potential of the business. And investing in a business without a strong perception of the true business potential of its digital reach – eCommerce, data acquisition and whether the business technology is future-proof – is a risk.

Quite simply, in today’s market, every business is a digital business. That is why analysing an investment’s digital assets to assess digital potential is essential best practise.

What digital aspects should you consider?

Today, an assessment of a business’s online performance and capabilities is a pivotal part of almost every investment. This is not just the case for pure online players, but also for traditional businesses with any type of online activities.

Proper digital due diligence has nothing to do with regular commercial due diligence: traditional KPIs do not apply, online markets behave differently, and teams require very different capabilities.

To perform a proper digital due diligence, different tools and a deep understanding of digital products are required.

Assessment should cover an internal digital health-check of a business, including people, tech and data. Plus, the assessment should evaluate the competitive landscape and fluctuations in consumer demand.

Conducting an exhaustive digital due diligence process provides a guide for a wide range of considerations, such as, for example, the successful integration of two companies’ digital assets.

Understanding a company’s digital assets, as well as the level of weakness and digital debt, will help ensure both a proper understanding of the company’s digital performance and the potential cost of integrating a company’s digital presence, systems, data and vendors.

How we can help you conduct digital due diligence to understand the potential of your investment

We support you by executing digital due diligence of pure online players as well as the online activities of more traditional players. By combining experience in top-tier strategy consultancy, data analysis, technology expertise and online entrepreneurship, our team is well equipped to support you by assessing the digital performance of a business through:

  • Customer data analysis, assessing the health of customer acquisition and retention practices, as well as customer behaviour.
  • eCommerce budgeting process, conducting a review of the premises and expectations upon which it has been built.
  • eCommerce & mobile app usability and experience assessment.
  • eCommerce & CRM systems architecture assessment of solidity, scalability and fitness for purpose.
  • Performance assessment of third-party partners, such as agencies, vendors, third-party logistics, etc.
  • Digital leadership assessment.
  • Team expertise & skills assessment.
  • Internal processes assessment.
  • IT infrastructure assessment, including network security.
  • Digital experience positioning to assess where you stand versus your competitors.

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