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Due Diligence Prioritized Backlog

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About the play

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Managing details and ensuring that everyone is working on the highest priority tasks throughout the diligence process is one of the largest challenges during a live deal.

Priorities are in flux throughout the deal as new situations arise and conditions shift. In order to keep track during the process, tasks are tagged as a high priority on diligence or integration trackers, then shared with the team and counterparties so that everyone involved knows what to focus on.

As the number of items tagged as high priority grows, however, half the list could be considered a “top priority.” The list becomes meaningless, and the team’s valuable time and efforts become disorganized.

Maintaining lists of tasks in descending order of priority, visible to your team and appropriate stakeholders, develops a focus on top tasks that keeps the deal moving forward through evolving variables and distractions. In any project, regardless of scale, keeping a list of highest priorities and tracking progress is critical to a successful outcome. Although this seems intuitive and painfully obvious, the traditional approach to M&A deals often excludes a centralized list that updates in real-time for all practitioners to view and track.

A project management platform makes it easy to change the order of priorities as deals evolve and new information emerges. This type of prioritized list is often referred to as a backlog. With a centralized backlog organized in this way, teams can react quickly to new requests or changing priorities; the backlog allows for clarity and agility in collaboration on big-picture goals.

As the deal team processes documents, they inevitably discover accounting errors and information gaps, which require additional requests issued to the target company.

The Agile M&A process acknowledges that the parameters of complex projects like due diligence invariably fluctuate. Prioritization of new requests/work items on a regular basis ensures that the team addresses the highest priority items in a timely manner. While the specific process for handling prioritization varies depending on the size and complexity of each deal, the following are a few solutions to consider.

  • Option 1 - Daily Prioritization

For large deals managing a high volume of requests, daily prioritization may be necessary to ensure the data within the backlog reflects the current priorities.

  • Option 2 - Weekly Prioritization

For deals with a more moderate volume of diligence requests, teams may find prioritizing the backlog on a weekly basis more effective. A weekly approach provides a simple structure to ensure that requests are reviewed and sequenced accordingly, but at the same time allows for expedited processes to occur if an urgent request enters the workflow.

  • Option 3 - On-Demand Prioritization

Special requests or urgent, unexpected needs discovered during an M&A project must be managed in an organized fashion. The newly-revealed needs should be prioritized against known work items, in order to evaluate priority.

Key Takeaways - Value Proposition: building and maintaining a prioritized diligence backlog ensures that the team is focused on the most important work and on identifying critical issues as early as possible.

How to put it in play:

  • Review the diligence backlog regularly
  • Add/update the backlog to reflect latest priorities
  • Pull work from the top of the backlog, as a general rule
  • Anti-patterns to avoid: adding work without sufficient understanding of the larger goals
  • Prioritize work only when an emergency situation is identified

Preparation

People

diligence team, workstream leads/project managers, key stakeholders

Difficulty

Moderate to Difficult

Materials

project management platform

Time

This is an ongoing play

play

Running the Play:

01

Select and utilize a project management platform

Synchronized backlog maintenance presents a significant organizational challenge. Selecting a strong project management platform is key in meeting this challenge.

02

Map out high level task

Using the project management platform, begin to map out high level tasks of the diligence into a centralized program backlog. This forms the vertical axis of the project, defining the steps the project will move through over its lifespan.

03

Track progress and manage dependencies

With the help of communication tools, track workstreams’ progress and manage dependencies. Christina Amiry, Head of M&A Strategic Operations at Atlassian offers the following practical application for this step: “We use our own systems and tools [Confluence and Jira] to manage dependencies, define work, and track its progress. Then, on a daily basis, we use communication tools like Slack to do the back and forth design of dependencies and negotiate when things are going to happen so that our timelines line up [and we conduct efficient] resource planning.”

04

Have representatives of each workstream meet on a regular basis

Either on a  weekly or biweekly basis, representatives from each workstream should meet. More specifically, the purpose of this meeting is to review requests and unplanned work introduced to the initiative. The level of complexity, effort, and uncertainty for each request is discussed in detail. A priority level is assigned for each new request; if the request is urgent, current work in progress may be deprioritized to allow team members to dedicate time to the new urgent request.


Additionally, these meetings are an opportunity to maintain/achieve a cross-functional, project-wide workflow. If one team works more quickly than anticipated and reaches a dependent task ahead of schedule, they must wait for the other teams to catch up, or the other teams must jump ahead in their own backlogs. Conversely, if a team falls behind and fails to complete their task on time, they may hinder many teams at once and jeopardize the project timeline as a whole.

05

Communicate any changes to planned work

Any changes made to the backlog or task list from the Step 4 meeting must be quickly and clearly communicated to the workstreams. 


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