Private equity (PE) firms often underestimate the value of technology in M&A deals, leading to missed opportunities. The traditional approach focuses on technology as a cost center rather than a value creation lever. Survey results show that while PE leaders recognize the importance of digital capabilities and strategic technology investments, their execution track record is poor, with only one in three projects meeting initial goals. This gap arises from fragmented technology due diligence, lack of hands-on experience, inconsistent advisor involvement, and inadequate transformation preparation.
Successful technology value creation requires a focus on people, including leadership commitment, strategic alignment, and a tech-savvy operating partner. Key success factors include identifying and assessing technology levers pre-deal, leveraging cloud-based platforms, and ensuring fit-to-standard processes. Examples like SUSE demonstrate how a greenfield cloud IT landscape can drive operational efficiency, cost savings, and top-line growth.
The report emphasizes that while foundational technology and digital gains are challenging, they become more achievable with cloud technology platforms and end-to-end partners like Accenture. These platforms enable rapid introduction of state-of-the-art digital capabilities, reducing upfront investment and organizational change management efforts. By partnering with experts who understand both technology and the PE space, firms can unlock additional value levers for cost reduction, enhanced flexibility, and revenue growth.
