.webp)
How to Assess Proprietary Tech Tools: Differentiator or Hidden Liability?
When a target company highlights its proprietary tech platform as a strategic asset, it’s often framed as a lever for scalability, margin improvement, or customer experience. But beneath the pitch lies a critical due diligence question: is this platform a genuine enabler—or a future liability disguised as an asset?
Understanding the true nature of internally developed tools requires more than a demo. It demands a structured analysis of their intrinsic value, scalability, adoption, and the often-overlooked dimension of technical debt.
"Every internal platform carries debt—the question is whether it’s recognised, quantified, and funded."
1. Look for intrinsic value, not just ambition
A proprietary tool creates value if it delivers real differentiation. That means:
• Unique features that improve productivity or user experience
• A modern, modular architecture designed for scale
• Demonstrated adoption in day-to-day operations
Beware of aspirational platforms that exist only in pitch decks or pilot phases. A tool used by one business unit with no roadmap for group-wide rollout is rarely strategic.
2. Analyse the technical debt
Every software carries technical debt. That’s not a red flag in itself—it becomes one when the debt is undocumented, underestimated, or unbudgeted.
Key signs to assess:
• Legacy modules or fragile architectures
• Lack of documentation or test coverage
• Key-person dependencies (often the original developer)
• Underinvestment in upgrades, maintenance or security
Debt is acceptable if:
• It is clearly inventoried
• The cost to refactor or modernise is quantified
• A phased budget is integrated into the business plan
3. Test scalability vs. narrative
Scalability is the most common claim—and the most commonly overstated.
Ask:
• Can the infrastructure handle a 3x increase in usage?
• Will extending to new geographies or business units require a rebuild?
• Are the current hosting, security, and data models group-ready?
4. Ask for the roadmap and the budget
Always request:
• A clear tech roadmap with milestones, cost estimates and governance
• An inventory of risks and obsolescence points
• Evidence of leadership alignment (CEO, CFO, CTO) on the level of investment required
Conclusion
A proprietary platform can be a competitive advantage—or a future capex trap. The key is not to reject internal tools by default, but to assess them with a critical eye: is the platform delivering now, is it scalable tomorrow, and is its debt under control? In M&A, tech is rarely neutral. It either compounds value—or erodes it silently.
.webp)
.webp)
.webp)
.webp)