When it comes to private equity (PE), the goal is to empower portfolio companies (portcos) to quickly create value. An often-overlooked aspect in the value creation process is the role of strategic IT partnerships. Align Capital’s CIO Eric Dirst recently sat down with TechMD’s Sebastian Igreti for a revealing interview, “Strategic IT Partnerships for Private Equity Portfolio Growth,” in which they discussed how partnering with the right IT provider can form the cornerstone of fast, scalable, and secure growth for PE firms and their portcos.
Key criteria for selecting an IT provider
Private equity firms must be meticulous when selecting an IT provider for their portcos. Dirst elaborated on the importance of the following key criteria:
1. Support for rapidly growing portcos. IT providers must be able to scale their services to match the growth trajectory of portcos, from small startups to large enterprises, as well as provide strategic counsel to enable such growth.
2. Exceptional customer service. Responsive and efficient customer support ensures that IT issues are addressed promptly, minimizing downtime.
3. Broad range of offerings. Comprehensive managed service provider (MSP) offerings including help desk support, PC deployment, and firewall management, as well as cybersecurity services are crucial.
4. Versatility in support: The ability to support portcos of all sizes ensures that as the companies grow, their IT needs are met without the need to switch providers.
Addressing common challenges of acquired portfolio companies
Portcos often face significant IT challenges, particularly if they have been underinvested in areas like infrastructure and security. Typical issues include outdated networks, poor WiFi coverage, obsolete servers, and insecure wiring. Here’s how TechMD helps Align Capital’s portcos address such challenges:
- Infrastructure overhaul. TechMD fixes tactical issues swiftly, while setting up robust processes and procedures to support the next stage of growth.
- Security enhancement: By hardening the environment, TechMD ensures that attackers cannot easily compromise credentials and access critical systems.
- Growth strategy: TechMD helps portcos strategize for handling IT needs as they scale, ensuring they are prepared for future growth.
Real-life success stories
Dirst shared a notable example of TechMD’s impact, which involved a newly acquired portco that suffered a phishing attack. The attackers sent fake invoices to customers, resulting in financial losses. The inherited MSP was unable to adequately secure the environment. TechMD stepped in, consolidated multiple Office 365 subscriptions into one, rolled out multi-factor authentication (MFA), and made improvements to networking, firewall, and WiFi environments. This not only enhanced security but also saved the portco money.
Cybersecurity and risk management for PE and portcos
For smaller portcos lacking the staff or technological capability to defend against cyberattacks, TechMD’s Security Operations Center (SOC) offers a cost-effective solution to continually monitor Office 365, configured to meet the portco’s specific needs. This proactive approach helps detect and mitigate attacks quickly, safeguarding sensitive information.
Regulatory compliance expertise
As portcos grow, they often face increased regulatory compliance requirements. TechMD has expertise in various regulations, such as CMMC 2.0 for manufacturing and ITAR for businesses working with the Department of Defense. Their team provides cost-effective solutions for achieving compliance, ensuring that only the necessary portions of the business adhere to these stringent requirements.
Accelerating value creation through efficient IT integration
One of the primary goals for PE firms is to integrate acquisitions swiftly to start realizing value. Wasting time on integration can erode potential gains. TechMD excels in facilitating quick and smooth integrations, getting everyone on the same email and collaboration platforms, and ensuring seamless document sharing and VPN access. This efficiency translates into significant value for PE firms and their portcos.
Additional resources for private equity firms and portfolio companies
Strategic IT partnerships are essential for private equity firms looking to empower their portfolio companies and drive rapid value creation. By choosing a versatile, responsive, and comprehensive IT provider like TechMD, PE firms can overcome common IT challenges, enhance security, ensure regulatory compliance, and integrate acquisitions efficiently.
Don’t miss the opportunity to learn how successful PE firms and their portcos are growing faster while keeping their data secure through strategic IT partnerships. Watch the complete interview now:
Contact TechMD for a free consultation on strategic IT that drives growth.
