The Value Assessment: Evaluation Meets Emotion
Let’s face it, one of the biggest challenges organizations face is deciding where to place their investments for the greatest returns. The goal may be margin expansion, market share, entering a new market, or response to competition. No matter the aim, investigating the soundness of an investment can be a daunting exercise. Without the right process and support in place, it can stall progress in its tracks.
Why? Successful investment decisions require an evaluation of the tradeoffs between cost, quality, and time.
There may be more questions than answers when exploring new markets, especially when it requires the creation of a technology or solution not in your sweet spot. Developing or acquiring a new or innovative technology can be an incredible source of capacity, competitive edge, and agility. It is a differentiator. But it can also be the reason for failure.
A tug-of-war between evaluation (scientific, technical, strategic, or regulatory) and emotion (intangibles, perceptions, or personal stakes) can take place. Your internal teams may have started early-stage development efforts in a new market space. At the same time, your business development team may be vetting more mature (but still pre-market) technologies. The emotional investment of time, intuition, and the promise of an emerging technology can make it difficult to walk away.
Decision Time: Make or Buy
However you got here, you've arrived at the “make or buy” decision gate. Now is the time to decide whether to continue investing in internal R&D or acquire an existing asset (or team).
This calls for a careful and honest appraisal of your existing capabilities, capacity, and access to the required equipment and facilities. Investment costs and resources are not the only crucial factor at this stage. Conducting the due diligence process for a potential target company without exposing your internal team to litigation is key.
A third-party provides transparency and an unbiased evaluation of the business case and decision-making criteria, and reduces organizational risk and investment costs.
The Impact of 3rd Party Technical Due Diligence Partner
External, multi-disciplinary technical due diligence teams partner with your in-house specialists to create “clean teams." These specialized teams are a mix of technology and market experts, trained to dig into the details and uncover the risks. Their process consists of using technology use-model immersion analysis to compare data room evidence to real-world applications. They work to verify claims, uncover data discrepancies, and identify gaps in performance, quality, and compliance, just to name a few.
These "clean teams” are agnostic and bring an objective view of the process, not colored by internal politics or emotions.
This approach allows you to explore multiple potential target technologies, using unique teams for each due diligence report to minimize crossover.
A third-party like Battelle adds rigor and efficiency to the due diligence process, and accelerates the track to a decision gate where the investment call is made.
The Importance of A Second Opinion
I recently worked with a long-term client on a six-month project. They invested nearly $500K to explore a new technology white space and develop proof of principle models and prototypes.
Their initial investigation into competing technologies and patent filings revealed a promising target. The asset had a 12-month lead in the market and an advanced engineering prototype ready for design verification. The claims were attractive, but unverified in terms of product performance.
Battelle Medical Device Solutions’ cross-functional team performed an independent design review for the same client, including testing results and methods. Insights gained from our due diligence checklist findings identified potential risks and mitigation strategies. Our work helped to establish specific technology readiness levels (TRLs) as a basis for negotiation terms. The process from start to finish lasted only five (5) weeks.
In our personal lives, we are encouraged to get a second opinion to gain from another’s perspective. Significant investments involving "make or buy" decisions should benefit from similar levels of scrutiny.
Finding the Right Partner
These strategic investments can be challenging, especially if exploring unfamiliar territory. When you partner with Battelle, you gain from the expertise of 2,600+ scientists and engineers, and the knowledge that comes from more than 65 years in medical devices.
Our work includes identifying design quality gaps prior to FDA approval and testing and evaluating performance claims. We can also collaborate to develop technology roadmaps and forecast modeling to identify opportunities and uncover potential challenges.
You'll be matched with a multi-disciplinary team, equipment, and facilities tailored to your unique requirements. We utilize a four-step approach -Explore, Immerse, Validate, and Inform- to conduct an exhaustive analysis, for a potential target and in-house solutions. Our goal is to better inform your investment decisions so you can move forward with confidence.