These days, almost every business relies on technology products and platforms to run daily operations and meet its goals. Unfortunately, your business needs and the functionality and performance of your supporting technology frequently fall out of alignment. A technology assessment is a good way to baseline where you are: what works, what doesn’t work, and what you should do about it. Through the assessment, you can:
- Identify gaps between actual and expected performance as they relate to the expectations and goals of your business
- Perform root cause analysis to understand why you have these gaps – for example, insufficient or misdirected development processes, inadequate requirements, lack of resources to meet feature demand, or poor communication between the tech team and other parts of your company
- Develop a set of recommendations to serve as the roadmap for improving the performance of your technology processes, products and platforms
Ten Mile Square practitioners have delivered over 200 technology assessments of all shapes and sizes – for both internal company technology programs and for VA investment and M&A transactions. Representative assignments include high profile M&A transactions, such as Univision’s recent acquisitions Gawker and The Onion, and 100+ VC and private equity transactions and post-transaction integrations. Dozens of companies have used the findings from our assessments to improve the performance of their technology teams and products. Along the way, we’ve developed a set of best practices for performing technology assessments. We’d like to share some of them with you.
Here are our best practices for running a successful Technology Assessment:
1. Before you start, think about the results you want
A successful assessment needs some up front planning. Why and how the assessment gets done depends on your objectives. For example, an investor or acquirer needs to ensure that the products and technologies perform as advertised and that the technology team is capable of delivering on future promises. A company might need to understand why a technical team or product isn’t performing and figure out how to improve things. Before you start the assessment, here are some questions you should ask in order to get a better result down the line:
- Why do I want to perform a technology assessment? For example:
- Prepare for a transaction – an investment, partnership, or M&A event – and need to know the current state of the products and team
- Product is performing poorly
- Development team delivers late
- Development team doesn’t deliver promised features
- Communication between development and rest of the company is poor
- Who is the sponsor of the assessment, and who are the stakeholders?
- Why are they interested, and what do they hope to gain from the results?
- How will you act on the results?
2. Serve your whole business, not just the technology team
The audience for the technology assessment is never just the technology team itself. Usually, one non-technical stakeholder sponsors the assessment on behalf of other stakeholders. The most common sponsors are outside investors (through their board representatives) or the CEO/President/COO. As you create your assessment you should make sure that it addresses the needs of each key stakeholder group, but, first and foremost, you need to satisfy the needs of your sponsor. Here’s a typical refrain we get often from an outside investor that commissions an assessment:
We’re the market leader, but growth is slowing. And our products are falling behind our competitors. We take a long time between releases, and our costs for development, implementation, and support are high. We should be throwing off high profits, but all our extra dollars go to support a slow moving product development team. Why is this, and how can we fix it?
3. Interact with all the key stakeholders
Technology teams don’t work in a vacuum. Market and product requirements come from product management, sales, marketing, and the executive suite. You need to look at not just how the tech team performs as a unit, but also how product requirements are generated, whether the requirements are reasonable given the size and skills of the tech team, and how the tech team interacts with other groups in the company. This means that, when you perform your assessment, you don’t just interview the tech team; you gain insight from all of the groups that rely on the tech team to do their jobs – for example, senior marketers, key sales executives, senior support engineers, and professional services consultants. It’s your job find the truth inside the opinions of many stakeholders.
4. Put the right people on the Assessment team
You need to put the right team in place to do the assessment. The more complex the assessment is, the broader and deeper the expertise on your team needs to be. Here are some examples of the types of expertise that you might need:
- Technology and Product Development
- Best practices in software architecture
- In depth understanding of major programming languages and frameworks
- Experience with modern software development processes, including end-to-end automated delivery processes
- Expertise in cloud and on-premise infrastructure options
- Business and Management
- In depth understanding of common business/revenue models in the target market
- Deep understanding of customer needs, wants, and pain points
- Knowledge of the market and competitive environment
- Knowledge of leading competitors, including both the features of their offerings and their likely strategies in the coming months and years
5. Time bound the exercise
You should work on an assessment only long enough to deliver thoughtful and concrete analysis to your sponsors and stakeholders. What does “long enough” mean? It means that the completed assessment delivers the right amount of high quality analysis to enable stakeholders to make decisions. For an early stage VC making a Series A investment, the assessment is usually pretty simple and can be done a day or so. The investor is working on a tight timeline and wants to know if the technology works as advertised and if the technology team can deliver. When a company is further along, it generally has more products are in production, serves lots of customers, and has a well defined internal processes. The assessments are more complex and take longer. The assessment time should be scaled to the value of the results.
6. Be factual and honest
If you are doing an internal technology assessment, the hardest thing is to create a factual and honest assessment that allows your company to make the right types of decisions. Different stakeholders have different points of view, and, particularly on the technology side, some participants may be on the defensive. It’s likely that you’ll discover a lot of things that need fixing not only on the technology side, but also in other parts of your company. Here are the best ways to ensure that your assessment ends up being factual, honest, and useful to the business:
- Pick the right team to do the assessment. The team should have a working knowledge of your products and technology, a good view of how the business works, and inspire trust among all of the stakeholders
- Create a clear set of objectives for the assessment and get stakeholder buy-in
- Make sure all stakeholders – and others with key information – are available to participate in the effort
- Be willing to take action on the results of the assessment in the short-term
- Using a Third-Party to perform the assessment
Using a third party to help with the assessment
To reiterate the key point here, the two biggest obstacles to performing a Technology Assessment in-house are:
- Putting together the right internal team to lead the effort
- Eliminating corporate politics from the equation so that the Assessment can deliver a fact-based, honest result
That’s why when an assessment is needed a lot of companies use outside consultancies, such as Ten Mile Square, to lead them through the process. Ten Mile Square brings several advantages to the assessment process:
- We have a proven methodology that we’ve put to use over 200 times for investors, acquirers, and companies
- Because we work with dozens of companies every year in many vertical markets we’ve seen many diverse business models and software products. We can learn your business and products very quickly
- We are technology agnostic. Our engagements span most commonly used technologies. We are experienced with strengths and weaknesses of these different choices and are often asked to guide transitions
- We’re not part of your organization, so we have no political constraints
- We understand and put in place the latest best practices in technology architecture, product management, and software development for our clients
- Your assessment gets done faster and with higher quality, because it’s our only focus
- We apply senior- and mid-level resources to do the work – not junior coders who are sitting on the bench
- More than likely, we’ll produce an assessment that will enable you to make your business better – quickly
To learn more about our work on Technology Assessments, go here.