How to Use Project Management Software in the M&A Due Diligence Process
- Project Management

How to Use Project Management Software in the M&A Due Diligence Process

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Successful mergers and acquisitions require impeccable organizational and analytical skills, as well as strong lines of communication, keen eyes for detail, and unwavering resolve, especially during due diligence. Due diligence is defined as the comprehensive overview and evaluation of a target company by the potential buyer, known as the acquirer. 

Diligence is historically described as a chaotic and draining stage of a deal’s lifecycle. With this in mind, expert practitioners work to create systems, templates, surveys, and playbooks to assist them with due diligence. Perhaps the most prominent advancement related to due diligence best practices is the dawn and fine-tuning of project management software, specifically designed for the unique needs of M&A.

What is the M&A Project Management Software? 

Project management software is designed to store and organize information and data associated with deals safely. It can simultaneously track multiple deals through pipeline features to keep track of multiple deals at different stages. The technology behind project management software also allows for increased transparency between teams and/or stakeholders associated with the deal.

What Are The Key Features of M&A Project Management Software?

Most M&A project management platforms include the following functional and convenient features:

  • A secure VDR (M&A Virtual Data Room) to store confidential and sensitive documents 
  • The ability to share files securely (safety features often include watermarking and customizable permission settings)
  • Fast and easy “drag and drop” uploading 
  • Live-linking of documents
  • Real-time analytics 
  • Click-of-a-button custom reporting 
  • Painless assigning of tasks
  • Comprehensive, full-text searching
  • Progress tracking via a “bird’s eye view” of the project

How Can Project Management Software Specifically Help During Due Diligence?

With the above features in mind, project management software can yield major benefits during due diligence. In fact, research shows that utilizing some of the top project management platforms for M&A can help deals close up to 40% faster. Here is a more comprehensive look at how:

1. Reduced Work

Diligence is such a cumbersome process that most big firms do not allow employees to work on back-to-back diligence projects. Reducing work and eliminating redundant tasks is one core way project management software improves due diligence. 

For example, with all team members working from a centralized location, the back and forth email game goes by the wayside. It is usually in these back and forth emails that duplicate requests and tasks are generated. Still, project management software eliminates duplicate requests and stores all information, so the need for those time-consuming emails falls away. 

Furthermore, the aforementioned key features of M&A project management software, such as drag and drop uploading, live-linking, and click-of-a-button customizable reporting, all save time and do away with many of the small tasks traditionally associated with diligence. Perhaps most impressive, though, is that some M&A software utilizes artificial intelligence (AI) to automate many processes, which reduces team members’ effort and workload. More on AI’s powers in today’s business world can be found in the article “Top 10 ways AI can influence eCommerce”.

It should also be noted that most M&A project management software comes with pre-made templates that can be used to guide diligence. These templates may include a list of documents and financial statements that must be gathered during the diligence process. The software also allows for these templates to be easily populated with the appropriate information. 

2. Superior Communication

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Collaboration and clear lines of communication are vital in the world of mergers and acquisitions. With project management software, stakeholders and team members are communicating daily, yielding multiple benefits during diligence. First, by making communication a two-way street, practitioners find the speed at which requests are answered improves. 

Second, increased communication can also allow both the buy-side and the sell-side to gauge how invested the other party is. Finally, though we are focusing on diligence here, an eye towards integration planning should be kept. The transparency and flow of information afforded by M&A project management software allow for smoother integration planning during diligence, as well as the tagging of items for diligence. 

3. Minimized Cost

In business, saving money is always a virtue, and some M&A project management platforms are known to do just that. More specifically, the project management software that allows for unlimited uploading of documents is shown to reduce costs associated with diligence as it moves users away from per-page pricing. 

Additionally, the benefit of not worrying about the cost associated with data is that all of the necessary data will be collected and shared – no cutting corners here, just cutting costs. 

4. Valuable Analytical Insights 

The heightened oversight allowed by some M&A project management software can allow stakeholders to track what team members are working on. The data gathered from this is valuable as it can help predict problem areas and low levels of engagement and track how well the deal is progressing through diligence. 

5. Decreased Distractions

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Many practitioners find using project management software for M&A reduces distractions that historically have hindered this part of the deal. Again, with all documents and tasks located in one centralized area, the workload is reduced, and distractions are limited. Similarly, many of the tools the software boasts make for methodical and organized work habits.

What Should I Look For When Buying M&A Project Management Software?

When shopping for M&A project management software, the key is to make sure the software is, in fact, designed for the complexities of M&A. Better yet, look for software designed by M&A professionals for M&A. Other points of consideration include:

  • Cost. M&A project management software varies greatly in cost. Taking into account the budget, personal needs, and deal size will be critical here. Be sure to read the fine print when researching cost, as many come with hidden fees, making it difficult to plan for costs associated with deals accurately. 
  • Ease of use. Diligence is time-consuming, learning project management software should not be. Look for software that is easy to set up and intuitive. 
  • Customer Service. On a related note, should problems arise, the software should come with customer support. The best customer support should include features such as 24/7 support (deals never sleep!). Before purchasing software, it is wise to preview customer support by calling or chatting online with a representative. 
  • Security. Since the software will be storing susceptible documents, carefully consider the security the software offers. Look for features that will keep documents safe, such as digital watermarking and permission settings (for example, “view only”)
  • The company’s individual needs and goals.  When shopping for project management software, each company should look at the deal size, areas related to diligence that need improvement, and workflow and management styles.

Final Thoughts

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While M&A project management software can be used for all stages of M&A, from deal sourcing through integration, it is beneficial during due diligence. Why? It simply allows users to work smartly, which correlates to making better decisions and limiting deals due to slow reaction time and poor communication. Using project management software can also make teams more Agile, a major yet well-deserved buzzword in business and marketing.

M&A project management software is recommended for all deal-makers. Still, it is beneficial for companies to manage multiple deals simultaneously and improve their performance during diligence. 


Author’s Bio: Lori Wade is a writer interested in a wide range of spheres from business to entrepreneurship and new technologies. If you are interested in M&A or the virtual data room industry, you can find her on Twitter & LinkedIn or find her on other social media. Read and take over Lori’s useful insights!

How to Use Project Management Software in the M&A Due Diligence Process

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