How Inconsistent System Tracking Reveals Critical Tech Risks During M&A Due Diligence

When Tracking Systems Reveal Hidden Tech Truths

When tech companies merge, I’ve learned to watch where others rarely look – the humble tracking systems. Why? Because how a company monitors its workflows often tells me more about their technical health than any flashy demo. After 15 years of evaluating acquisition targets, I’ve seen firsthand how inconsistent system tracking uncovers hidden risks that make or break deals.

The Coin Grading System That Taught Us Everything

Let me share a revealing case from a SaaS company we evaluated. Their collectibles authentication platform looked polished – until we examined their internal tracking. Users complained about quirks identical to PCGS coin grading issues:

• Status updates in backwards order (“Graded” before “Imaged”)
• Week-long delays between actual progress and system updates
• Team members manually triggering key workflow steps
• Zero visibility into quality control processes

What users dismissed as minor glitches were actually warning signs of fundamental tech issues. Here’s what we discovered when we looked under the hood.

From User Interface to Underlying Flaws

The Status Shuffle Problem

When workflow steps appear out of sequence, it usually points to patchwork coding. We often find patterns like this:


// Problematic approach: Rigid status rules
function changeStatus(order, newStage) {
const allowedChanges = {
'Received': ['Imaging'],
'Imaging': ['QA'],
// Missing crucial pathways
};

if (!allowedChanges[order.status].includes(newStage)) {
throw new Error('Invalid progression');
}
// ...
}


Key Insight: Flexible state engines beat hardcoded rules. Missing pathways create the confusing user experiences we see in systems like PCGS.

The Human Button Factor

When employees must manually update statuses (like that rumored “Being Imaged” button), it signals:

• Disconnected software components
• Missed automation opportunities
• Technical shortcuts piling up

When Tracking Delays Predict Growth Pain

During one acquisition, we found a tracking system that choked at just 20% increased volume. The target company had:

• Database tables that became unusable under load
• Status updates freezing the entire interface
• No buffer for processing spikes

The result? Customer-facing delays mirroring PCGS’s month-long status lags. To measure the risk, we:

1. Flooded the system with simulated transactions
2. Timed how long updates took during peak loads
3. Calculated how many staff they’d need to handle growth

Pro Tip: Always stress-test tracking systems beyond projected needs. If status updates take longer than 5 seconds during 3x normal load, expect scalability issues.

Four Hidden Risks in Faulty Tracking Systems

1. The Special Case Trap

PCGS’s “Walkthrough” orders (with different status paths) reveal a common issue – exceptions without structure. Code often looks like this:


// Band-Aid fix for premium orders
if (order.service === 'EXPRESS') {
skipStandardChecks(); // Creates invisible workflow!
}


2. The Mystery Audit Trail

When users can’t see why statuses changed (like PCGS’s unexplained QA results), it means missing:

• Change logs
• User action records
• System interaction histories

3. The Manual Review Bottleneck

PCGS’s speculated manual checks reflect reality – one platform we examined required 17 human touches per high-value transaction. Growth becomes impossible without costly hiring.

4. The Customer Impact Domino Effect

One client learned the hard way how tracking failures:

• Quadrupled customer service calls
• Crushed satisfaction scores
• Added $1M+ in unexpected yearly costs

Your M&A Tech Due Diligence Toolkit

When assessing tracking systems in acquisitions:

Technical Health Checklist

1. Compare system statuses to real workflow steps
2. Count how many steps require human intervention
3. Verify complete audit trails exist
4. Simulate transaction surges

Acquisition Decision Guide

Positive Signs

• Automatic status updates via integrations
• Near-instant updates during stress tests
• Complete visibility into status changes

Warning Signs

• Database tweaks to force status changes
• Special rules without system support
• Status confusion driving support contacts

Tracking Systems: Your Truth-Telling Tech Mirror

The PCGS example isn’t about coin grading – it’s about how operational systems reflect engineering quality. Inconsistent tracking reveals:

• Technical shortcuts limiting growth
• Architecture needing overhaul
• Hidden staffing costs from manual fixes

Next time you’re evaluating an acquisition, look past the sales pitch. Watch how their tracking systems behave. Do updates flow smoothly or stutter? The answer often predicts integration headaches – or pleasant surprises.

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