Picture this scenario, you’re getting geared up to exit an investment.
The Cloud Migration you’ve been working on is only 75% complete. The new product you’ve been working on is three months away. You’ve done all the heavy lifting. Taken all the pain. Today the value of all your hard work is $0.
Imagine you could launch a brand new technology product in the first 100 days.
Even an unfinished digital transformation has a $ value. There are five areas where tech change is often undervalued:
- Reducing technology-related customer churn
- Optimising technology cost
- Reducing critical service outages
- Creating tech data and insights
- Improving sprint velocity
For PE firms can position these incomplete transformations, the rewards are substantial
The reality is that most digital transformations fail. 84% of initiatives are abandoned after 24 months. Those that succeed still often experience significant, sometimes multi-year, delays. PE firms can accept some short-term pain in the investment, away from the market’s eyes.
Technology is a resource that PE firms are extremely well-placed to take advantage of this. Let’s not forget that a transformations goal is to make future change easier.
But you need a firm eye on measuring the value created today and the value creation potential. If you can put a $ value on it now you can put a value on it at exit.
Considerable value is being left on the table at exit for sellers. And there is an big opportunity to jump start value creation for the buyer.
Will you put a $ value on incomplete transformations going forward?
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