In the past decade the cost of installing and maintaining technology has become a major item below and above the EBITDA. Nevertheless, in our experience, PE investors in Portfolio Companies rarely possess the passion to invest in IT because they correctly realize there is significantly more financial leverage using their time to identify emerging segment trends and opportunities within those segments.
At PIP we believe, more often than not, EBITDA delivery and improvement begins by asking whether a given portfolio company has optimized business processes, and performance information to compete in today’s increasing inter-global marketplace. Technology is merely the means to that end. That’s one of the reasons our staff of professionals all have significant business operating experience. A fundamental tenet of our value system is to make sure our clients spend only what they need on technology in the right area(s).
Introducing the 2013 Top Ten Mistakes to Avoid:
10. Put Portfolio Company IT improvements too far down the totem pole, thereby missing lower cost, efficient improvements and most important competitive advantage.
9. Allowing well-intentioned but inexperienced IT personnel to make informed decisions in areas they have little/no real business experience.
8. Endorsing a technology-per-usual management approach rather than identifying mandatory, necessary IT changes.
7. Not insisting portfolio companies look at multiple IT solutions (e.g., including intelligently leveraging the current application portfolio) before investing in wholesale change.
6. Allowing poor technology investment decisions to meander along rather than push toward the right direction(s).
5. Delay making important short and long term IT strategic decisions to improve the business; the result almost always leads to lost opportunities that cost more to implement later.
4. Rationalizing cash flow constraints to ignore objective Diligence findings that recommend unglamorous yet critical technical infrastructure upgrades that are needed now.
3. Forgetting that the highest levels of profitability can only be achieved on a foundation of operational efficiency.
2. Partnering with an IT Consultancy that does not share the same business and moral values leads to wondering whose best interests a recommendation serves.
1. Not considering technology solutions from an overall business perspective invariably leads to lost business opportunities.
Businesses of all sizes rely on information technology as a crucial component of their day-to-day operations.