Cognitive Evaluation System for Acquisition Due Diligence

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Solution Overview

Problem

The business acquisition process is complex, time-consuming, and prone to human error due to the vast volume of documents and geographical dispersion of teams, leading to incomplete due diligence and high risks for acquiring entities.

Innovation Solution

A cognitive evaluation system utilizing artificial intelligence to analyze acquisition candidates through search engines, generating ratings and recommendations based on financial, online presence, workforce, and market data, with cognitive analysis and natural language processing to enhance due diligence and return-on-investment analysis.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Measurement precision

If traditional manual due diligence processes are used, then human reviewers can analyze acquisition candidates, but the process becomes time-consuming and prone to human error due to the vast volume of documents

Engineering Contradiction:

Improveevaluation accuracyVSAvoiddue diligence time

Core Design Contradiction:

Measurement precisionVSLoss of time

Solution Approach 1:

The patent replaces manual mechanical review processes with an automated cognitive evaluation system that uses AI, natural language processing, and machine learning to analyze acquisition candidates. This substitution eliminates human error and dramatically reduces the time required for due diligence while maintaining or improving evaluation accuracy.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Solution Approach 2:

The system enables self-service evaluation where the cognitive evaluation system automatically performs due diligence without requiring extensive human intervention. The AI system independently analyzes documents, generates ratings, and provides recommendations, freeing human reviewers from time-consuming manual analysis while improving consistency and accuracy.

Inventive Principle:

Principle #25Self-service

2Loss of information

If comprehensive due diligence is performed manually, then more information can be gathered about acquisition candidates, but the complexity and time required increase significantly

Engineering Contradiction:

Improveinformation completenessVSAvoidevaluation system complexity

Core Design Contradiction:

Loss of informationVSDevice complexity

Solution Approach 1:

The cognitive evaluation system is designed as a multi-functional platform that can handle various types of due diligence tasks simultaneously - financial analysis, legal review, operational assessment, and market evaluation. This universal system consolidates multiple specialized processes into one integrated solution, reducing overall complexity while improving information completeness.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Solution Approach 2:

The evaluation system segments the complex due diligence process into distinct analytical modules that can process different aspects of acquisition candidates independently (financial data, operational data, market data). Each module specializes in specific analysis tasks, making the overall complex process manageable and systematic while ensuring comprehensive information gathering.

Inventive Principle:

Principle #1Segmentation

3Productivity

If traditional evaluation methods are used, then the process can be completed with simple tools, but the productivity and efficiency of the acquisition process suffer

Engineering Contradiction:

Improveacquisition process efficiencyVSAvoidsystem automation level

Core Design Contradiction:

ProductivityVSExtent of automation

Solution Approach 1:

The patent replaces traditional mechanical evaluation methods with automated cognitive systems that use AI and machine learning. This substitution dramatically increases productivity by processing vast amounts of data rapidly and consistently, eliminating the bottlenecks of manual review while maintaining high automation levels throughout the evaluation process.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Solution Approach 2:

The cognitive evaluation system acts as an intermediary between raw data and human decision-makers. It automatically processes and synthesizes information from multiple sources, generating structured evaluations and recommendations that bridge the gap between unprocessed data and actionable insights, thereby increasing overall process efficiency.

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS11769095B2Cognitive evaluation of acquisition candidates

Publication Date: 2023.09.26 INTERNATIONAL BUSINESS MACHINE CORPORATION

AI summary

An embodiment includes initiating a search engine to conduct a first search of a data resource for information associated with an acquisition candidate using search criteria provided via a user interface. The embodiment receives a first search result from the search engine comprising an information dataset associated with the acquisition candidate. The embodiment generates a candidate rating for the acquisition candidate indicative of a performance metric for the acquisition candidate relative to another acquisition candidate. The embodiment initiates the search engine to conduct a second search of the data resource using search criteria extracted from the information dataset. The embodiment receives a second search result from the search engine comprising due-diligence data. The embodiment calculates an updated candidate rating for the acquisition candidate based on the cognitive analysis of the due-diligence data and uses the updated rating to provide a recommendation regarding the acquisition candidate.