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The fast pace of change today requires that businesses have a much greater appreciation of due diligence. Sufficient forethought, investigation, and assessment of the transaction are necessary of relevant aspects of the past, present and predictable future of the change. Due diligence often involves: Requesting, gathering, reviewing and validating financial and operational details, Refining technical details and pricing proposals, and Confirming or updating initial information needed to make an informed decision.

 

The primary reasons for proper due diligence are to risk-mitigate the potential for bad decisions and improper investing of funds or resources, over-pricing or undesirable purchasing based on: Poor or missing documentation, bad assumptions, fraud, or unknown constraints, poor or incorrect referencing and Improper delivery of products or services. You can click here to read more of these services.

 

It is significant to understand that it is a mistake to conduct risk management and mitigation in a rushed or ad-hoc manner or think of due diligence as the "last step" to a finalized deal. Due diligence, similar to quality and risk management, is best done as an ongoing formal process that measures risks for new business or changes to existing businesses. Risk management and mitigation aren't about "just doing it" and may span many months. It is important that changes are understood and documented throughout the business or program life-cycle so that expectations are understood, managed, shared, implemented, and ultimately achievable.

 

Quantifying risks and opportunities is a critical piece of the process. Businesses follow similar approaches in managing change or taking advantage of new opportunities. The two critical variables in measuring risk are the "Severity of Impact" to the business and the "Probability of Occurrence" of the risk or opportunity. These variables are significant to performing due diligence and are used in quantifying the risk of the transaction or change.

 

There are multiple perspectives for risk management and mitigation from both the purchasing and seller perspectives and determine if the change will be wise for growth, profitability or whether there are other tangible benefits. Other benefits may include: Demonstrating new products, capabilities, or desirable service areas, and broadening a geographic market.

 

 

The near and long-term results that come from the growth opportunities and other benefits of a successful implementation and use of the due diligence process can take an organization beyond adding the intended new business capabilities, investment opportunities and other changes and can result in a major cultural, product, and service change to the company. You may click here for details.