--- title: "Due Diligence Insights: Trends and Findings from 49 Assessments" description: Due diligence analysis reveals critical insights on cyber security and product management for Private Equity in the software sector, highlighting key assessment trends and areas needing improvement. image: https://digitalfrontierpartners.com.au/hubfs/AI-Generated%20Media/Images/due%20dillegence%20private%20equity.jpeg --- [Skip to content](https://digitalfrontierpartners.com.au/news/due-diligence-analysis#main-content) [![](https://digitalfrontierpartners.com.au/hs-fs/hubfs/DFP-Logo.webp?width=1200&height=342&name=DFP-Logo.webp)](https://www.digitalfrontierpartners.com.au/) - [Services](https://digitalfrontierpartners.com.au/news/due-diligence-analysis#products) Show submenu for Services - [Cybersecurity](https://digitalfrontierpartners.com.au/cybersecurity-services-24/7-threat-monitoring-and-response-dfp) - [Due Diligence](https://digitalfrontierpartners.com.au/technology-due-diligence-product-assessment-digital-frontier-partners) - [Enterprise AI](https://digitalfrontierpartners.com.au/enterprise-ai) - [Technology Advisory](https://digitalfrontierpartners.com.au/technology-advisory-services-digital-frontier-partners) - [Workforce Optimisation](https://digitalfrontierpartners.com.au/workforce-optimisation-ai-driven-cost-control-and-performance-dfp) - Resources Show submenu for Resources - [News](https://digitalfrontierpartners.com.au/news/tag/news) - [Case Studies](https://digitalfrontierpartners.com.au/news/tag/case-study) - [Research](https://digitalfrontierpartners.com.au/news/tag/research) - [Weekly Cyber Reports](https://digitalfrontierpartners.com.au/news/tag/weekly-cyber-reports) - [About](https://digitalfrontierpartners.com.au/news/due-diligence-analysis#about) Show submenu for About - [About Us](https://digitalfrontierpartners.com.au/about) - [Contact Us](https://digitalfrontierpartners.com.au/contact) Open main navigation Close main navigation - [Services](https://digitalfrontierpartners.com.au/news/due-diligence-analysis#products) Show submenu for Services - [Cybersecurity](https://digitalfrontierpartners.com.au/cybersecurity-services-24/7-threat-monitoring-and-response-dfp) - [Due Diligence](https://digitalfrontierpartners.com.au/technology-due-diligence-product-assessment-digital-frontier-partners) - [Enterprise AI](https://digitalfrontierpartners.com.au/enterprise-ai) - [Technology Advisory](https://digitalfrontierpartners.com.au/technology-advisory-services-digital-frontier-partners) - [Workforce Optimisation](https://digitalfrontierpartners.com.au/workforce-optimisation-ai-driven-cost-control-and-performance-dfp) - Resources Show submenu for Resources - [News](https://digitalfrontierpartners.com.au/news/tag/news) - [Case Studies](https://digitalfrontierpartners.com.au/news/tag/case-study) - [Research](https://digitalfrontierpartners.com.au/news/tag/research) - [Weekly Cyber Reports](https://digitalfrontierpartners.com.au/news/tag/weekly-cyber-reports) - [About](https://digitalfrontierpartners.com.au/news/due-diligence-analysis#about) Show submenu for About - [About Us](https://digitalfrontierpartners.com.au/about) - [Contact Us](https://digitalfrontierpartners.com.au/contact) - [Contact us](https://digitalfrontierpartners.com.au/contact) [Contact us](https://digitalfrontierpartners.com.au/contact) 22 August 2024, 2:00:00 pm AEST # Due Diligence Insights: Trends and Findings from 49 Assessments ![Picture of Rick Watson](https://digitalfrontierpartners.com.au/hs-fs/hubfs/Imported_Blog_Media/Rick-Watson_page-0001-4-500x500.jpg?width=50&name=Rick-Watson_page-0001-4-500x500.jpg) [Rick Watson](https://digitalfrontierpartners.com.au/news/author/rick-watson) # Executive summary - This due diligence analysis covers of 49 assessments for the period August 2020 to July 2024. - Due diligence reports were mainly requested by Private Equity for Software. - Cyber Security. assessments were requested most frequently. - The most common combination of assessments \[Cyber security, Product management, Product development\] has been used 15 times. - Cyber security is a work-in-progress for many companies. Most don’t have defined processes and lack effective management. - Assessment scores are highest for *product development and management*, and lowest for *data & analytics* - Differences are detected only in the scores of components of the cyber security assessment. Scores are lowest for *Threat Intelligence Monitoring & Response*, *Vulnerability Scans & Penetration Testing*, and *Security Awareness*. The highest score is for *Identity & Access Management*. - Over the period, there are no trends in average assessment scores. ## Due diligence Due diligence is a comprehensive and systematic investigation undertaken by individuals or organizations before entering into significant agreements or transactions. Due diligence has traditionally been based on a financial analysis of the balance sheet, profit and loss statement, and cash flows. However, a balance sheet is insufficient because it is a snapshot of the current collection of capital and usually solely reports economic capital, which is about 30% of the value of a public company. Intangibles constitute about 60% of the market value of the S&P 500, such as organizational capital (systems and patents), customers (social capital), and brands (symbolic capital).[1](https://digitalfrontierpartners.com/blog/2024/08/22/due-diligence-analysis/#fn1) Intangibles are often a larger percentage of value for a high-tech business. Viewing a firm as a collection of systems that create capital is more useful in a digital world ([Watson 2020](https://digitalfrontierpartners.com/blog/2024/08/22/due-diligence-analysis/#ref-watson2020)). For instance, a system of engagement creates customers (social capital), and a system of production produces goods and services (economic capital). Systems are the engines for creating value. Consequently, we focus on critically assessing current business systems and their capacity to meet future needs. Currently, due diligence is primarily a methodology for reducing risk when trading firms. The primary goal is to analyze an organization’s commercial, technical, financial, and operational exposures. By gathering pertinent information and assessing potential threats, due diligence is pivotal in minimizing uncertainties and mitigating risks associated with a critical business transaction. Clients expect to receive concise and actionable recommendations to inform managerial decisions. IS due diligence is concerned with assessing the quality of a firm’s digital assets, their management, and the delivery of information services internally and externally. This semi-annual report is based on 49 due diligence studies, with most of the firms in the Software business. It covers the period August 2020 to July 2024.   ![industries 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/industries-1.png "Due Diligence Analysis 1") The due diligence assessments were for clients fairly evenly spread in size from small to large.   ![size 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/size-1.png "Due Diligence Analysis 3") The requesting clients were mainly Private Equity.   ![clients 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/clients-1.png "Due Diligence Analysis 5") There was a total of 99 assessments. Most were for Cyber Security.   ![assessments 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/assessments-1.png "Due Diligence Analysis 7") ## Use of the different types of assessments To understand the usage of the 5 assessment methods, we used the [UpSet methodology](https://en.wikipedia.org/wiki/UpSet_plot) ([Lex et al. 2014](https://www.richardtwatson.com/DFP/dd.html#ref-lex2014)), which is designed to visualize the relationship between two sets of data, such an assessment method and its usage. it can generate an information rich diagram that conventionally would require multiple tables. The UpSet plot illustrates the relationship between a type of assessment and its frequency of occurence singly or in combination in a due diligence assessment. The horizonal tan bars report the number and type of assessments, with Cyber security, the topmost bar, the most common with 42 applications across the organizations assessed. The most common combination of assessments (leftmost most maroon vertical bar) is \[Cyber security, Product management, Product development\], as distinguished by the maroon dots showing the intersection of an assessment combination and the times they are jointly applied. Light gray dots show no usage. In the case of the combination \[Cyber security, Product management, Product development\], it has been used 15 times.   ![upset 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/upset-1.png "Due Diligence Analysis 9") ## Cyber assessment A Cyber security asssessments iis based a five-point scale to assess eight items. We’ve recoded the average score across the five items to create an assessment of the state of cyber security.   ![cyber security 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/cyber-security-1.png "Due Diligence Analysis 11") ## Assessment score The average scores for the assessments vary from Product development (2.36) to Data & analytics (1.5), as shown in the following table.   ![assessment averages 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/assessment-averages-1.png "Due Diligence Analysis 13") ## Analysis of the elements of each type of assessment Each of the assessment types was examined for differences in the mean scores for each of their elements. The only case were there is a difference in with the scores for cyber security assessment **Note:** In the following graphs, elements that are not statistcally different have the same letter(s). For example, for the cyber security assessment, *Threat Intelligence Monitoring & Response* (b) is smaller than *Identity & Access Management* (a). *Secure Application Architecture* (ab) is not different from any other element. ## Cyber security assessment   ![cyber security 1 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/cyber-security-1-1.png "Due Diligence Analysis 15") ## Data & analytics assessment   ![data analytics 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/data-analytics-1.png "Due Diligence Analysis 17") ## Information technology assessment   ![IT 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/IT-1.png "Due Diligence Analysis 19") ## Product development assessment   ![product development 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/product-development-1.png "Due Diligence Analysis 21") ## Product management assessment   ![product management 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/product-management-1.png "Due Diligence Analysis 23") ## Time series analysis No statistically significant trends were detected. In some cases, such as *Data & analytics*, we had too few observations to detect a difference, if it exists.   ![time series 1](https://digitalfrontierpartners.com/wp-content/uploads/2024/08/time-series-1.png "Due Diligence Analysis 25") ## References Lex, Alexander, Nils Gehlenborg, Hendrik Strobelt, Romain Vuillemot, and Hanspeter Pfister. 2014. “UpSet: Visualization of Intersecting Sets.” *IEEE Transactions on Visualization and Computer Graphics* 20 (12): 1983–92. [https://doi.org/10.1109/TVCG.2014.2346248](https://doi.org/10.1109/TVCG.2014.2346248). Watson, Richard T. 2020. *Capital, Systems and Objects: The Foundation and Future of Organizations*. Management for Professionals. Singapore: Springer. ## Footnotes 1. [https://www.economist.com/leaders/2020/02/06/what-it-takes-to-be-a-ceo-in-the-2020s](https://www.economist.com/leaders/2020/02/06/what-it-takes-to-be-a-ceo-in-the-2020s)[↩︎](https://www.richardtwatson.com/DFP/dd.html#fnref1) [Case Study](https://digitalfrontierpartners.com.au/news/tag/case-study), [Advisory](https://digitalfrontierpartners.com.au/news/tag/advisory), [News](https://digitalfrontierpartners.com.au/news/tag/news) ## Related posts [![](https://digitalfrontierpartners.com.au/hs-fs/hubfs/AI-Generated%20Media/Images/The%20image%20depicts%20a%20bustling%20metropolis%20with%20a%20skyline%20of%20modern%20highrises%20under%20a%20bright%20blue%20sky%20Digital%20data%20highways%20represented%20by%20glowing%20lines-1.png?height=200&name=The%20image%20depicts%20a%20bustling%20metropolis%20with%20a%20skyline%20of%20modern%20highrises%20under%20a%20bright%20blue%20sky%20Digital%20data%20highways%20represented%20by%20glowing%20lines-1.png)](https://digitalfrontierpartners.com.au/news/defending-your-digital-city-strategies-for-cyber-security-resilience) ## [Defending Your Digital City: Strategies for Cyber Security Resilience](https://digitalfrontierpartners.com.au/news/defending-your-digital-city-strategies-for-cyber-security-resilience) [Read more](https://digitalfrontierpartners.com.au/news/defending-your-digital-city-strategies-for-cyber-security-resilience) [![](https://digitalfrontierpartners.com.au/hs-fs/hubfs/AI-Generated%20Media/Images/The%20image%20depicts%20a%20vibrant%2c%20modern%20office%20space%20filled%20with%20diverse%20professionals%20engaged%20in%20collaborative%20work.jpeg?height=200&name=The%20image%20depicts%20a%20vibrant%2c%20modern%20office%20space%20filled%20with%20diverse%20professionals%20engaged%20in%20collaborative%20work.jpeg)](https://digitalfrontierpartners.com.au/news/the-capital-creation-game-modern-strategies-for-leaders) ## [The Capital Creation Game: Modern Strategies for Leaders](https://digitalfrontierpartners.com.au/news/the-capital-creation-game-modern-strategies-for-leaders) [Read more](https://digitalfrontierpartners.com.au/news/the-capital-creation-game-modern-strategies-for-leaders) [![](https://digitalfrontierpartners.com.au/hs-fs/hubfs/AI-Generated%20Media/Images/The%20image%20depicts%20a%20vibrant%20and%20intricate%20capital%20creation%20matrix%20displayed%20on%20a%20sleek%20digital%20interface.jpeg?height=200&name=The%20image%20depicts%20a%20vibrant%20and%20intricate%20capital%20creation%20matrix%20displayed%20on%20a%20sleek%20digital%20interface.jpeg)](https://digitalfrontierpartners.com.au/news/systems-that-create-capital-how-smart-strategies-drive-value) ## [Systems That Create Capital: How Smart Strategies Drive Value](https://digitalfrontierpartners.com.au/news/systems-that-create-capital-how-smart-strategies-drive-value) [Read more](https://digitalfrontierpartners.com.au/news/systems-that-create-capital-how-smart-strategies-drive-value) ###### Visit Us On: [linkedin-in icon](https://www.linkedin.com/company/digitalfrontierpartners/posts/?feedView=all) [Follow us on Facebook](https://www.youtube.com/watch?v=-BsUxioXzCk&t=6s) --- [![](https://digitalfrontierpartners.com.au/hs-fs/hubfs/DFP-Logo.webp?width=1200&height=342&name=DFP-Logo.webp)](https://digitalfrontierpartners.com.au/) Level 4, 350 Collins St, Melbourne VIC, Australia 3000 +61 [1800 288 817](https://www.google.com/search?q=digital+frontier+partners&oq=digital+&gs_lcrp=EgZjaHJvbWUqDwgAECMYJxjjAhiABBiKBTIPCAAQIxgnGOMCGIAEGIoFMhUIARAuGCcYrwEYxwEYgAQYigUYjgUyBggCEEUYOTIMCAMQABhDGIAEGIoFMgwIBBAAGEMYgAQYigUyBggFEEUYPDIGCAYQRRg8MgYIBxBFGDzSAQg0MzQ1ajBqN6gCALACAA&sourceid=chrome&ie=UTF-8#) Company   - 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