Yes, the market remains volatile. Yes, you’re concerned about your portfolio company returns. Maybe top line revenues are not what you hoped for. Overall you’re being extremely cautious about investments of any and all sorts. We hear and understand you.
But that doesn’t mean you should shy away from investing wisely in information technology. There are some IT expenditures that can potentially provide operational efficiencies and enhance your competitive insulation. Unfortunately there is no magic, one-size-fits-all silver bullet.
Consequently, we thought what might be useful is to provide a summary list of past mistakes PE Firms have made under the guise of prudent financial management.
- Put portfolio company IT operational improvements too far down the priority list, not recognizing the potential improvement opportunities.
- Avoided making decisions with regard to short and long term IT strategic directions that improve the business. Results were predictable: lost opportunities that cost more to implement later.
- Allowed well-intentioned, but inexperienced IT personnel to make informed decisions in areas they had little/no experience.
- Did not invest in selective changes. Continued to employ a technology-as-usual approach.
- Allowed poor technology investment decisions to meander along rather than stepping in and pushing the portfolio company toward the right direction(s).
- In many cases where investments were made, PE firms did not insist portfolio companies first look at the options, which included cost effectively leveraging current application portfolio rather than wholesale changes.
One practical suggestion: if any of the above sounds familiar, we should talk. We’ll be happy to take a look at the issue and tell you what we think. Think of it as a value added service from your IT consulting partner who tell it like it is.
Know the range of options before you make a technology decision.