Private equity firms are one of the many businesses in the financial services industry that have a challenging and risky job to do, and that's just when it comes to finding the proper organization to fund. While the challenge is great, the reward for their hard work is exponential. Before private equity firms realize a profit, they must overcome many challenges in acquiring an organization, including creating financial stability, managing a newly acquired staff, and increasing operational efficiency.
How can a managed service provider help a private equity firm?
Having a well-developed and trusting relationship with a managed service provider (MSP) can benefit a private equity firm in the following ways:
- Initial acquisition tasks will run smoothly and productively.
- Time and headaches related to IT management, operation, and security will be significantly reduced.
- IT downtime will be minimized.
- Investments will reach profitability far more quickly.
Each of these benefits ultimately helps private equity firms avoid wasting money. As an example, let's take a look at XYZ Partners, a fictional private equity firm, and Bit-Wizards, a real-life MSP. XYZ just inked a new deal and acquired a controlling interest in US Widgets, a manufacturing company with nine locations across the country. To reach its goals, XYZ needs to return US Widgets to a profitable status within 36 months.
Once the deal is complete, XYZ informs Bit-Wizards to get US Widgets onboarded with Managed IT Services (MITS). Bit-Wizards starts by conducting a network assessment and scanning all its devices, workstations, servers, cloud devices, email services, and other IT components. In less than a week, Bit-Wizards finds that the US Widgets locations are disconnected, use outdated hardware and software, have poor network security, and store data in separate, on-premises servers.
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What does this mean?
As part of its infrastructure optimization process, one of the first things the MITS team does is secure the networks by placing firewalls at each location and interconnecting them. Once the networks are secured and interconnected, Bit-Wizards migrates all on-prem servers and data to an organized, centralized cloud storage solution. Moving data to the cloud protects it, increases the company's cost-efficiency, and makes it easier for the team at XYZ to analyze documents and perform tasks.
In addition to increasing efficiencies within the IT infrastructure, Bit-Wizards also takes control of workstation management, protecting each endpoint within the newly acquired organization. The MITS team works on refreshing and maintaining each workstation with the latest updates and security patches while identifying critical upgrades. This step increases current output with improved efficiencies, which leads to quick returns on XYZ's investment.
Next, Bit-Wizards migrates each employee's data to Office 365. While the migration is in progress, Bit-Wizards also modernizes and secures each device on the US Widgets business network as it's onboarded. Combined with dependable, consistent IT help desk services, the entire XYZ team can leverage the full value of Office 365 to optimize efficiency and profitability.
Let's say US Widgets is already modernized... what else can Bit-Wizards help with?
It's great that US Widgets is already leading the charge on technology modernization. However, there are still essential items that need to be addressed within a newly acquired organization, starting with network security. While each private equity firm hopes for the best, they really should plan for the worst, and company acquisitions are an area where IT security needs to be on point.
Managed IT from Bit-Wizards includes a complete overhaul to beef up network security and lockdown documents, such as financial data or proprietary processes and documentation. Not only does Bit-Wizards prevent critical company data from walking out the front door and ending up in the hands of a competitor, but we also start analyzing US Widgets' networks for backdoors and vulnerabilities.
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Bit-Wizards is in control of IT. Now what?
As this is still a trusted partnership between Bit-Wizards and XYZ Partners, the job is far from done. Once Bit-Wizards flushes out all the IT issues and assists XYZ with its acquisition, future planning begins. The team develops a strategic plan to replace aging equipment, network components, processes, and other components that could degrade the network if left unchecked. Providing this plan allows XYZ to make informed decisions that support its profitability.
Having a member of your firm who can handle the IT aspects of the new company acquisition is certainly a bonus, and depending on the size of the newly acquired business, it might seem easy. However, things can quickly spiral once you get above 10 employees or add in complicated IT processes, not to mention multiple locations. You also need to ask yourself if it's a good use of your firm's time, money, and expertise.
This situation is why many people pay someone else to change the oil in their car. Sure, you could do it yourself, but is it worth it? For your firm to operate at the highest efficiency and profitability, placing the right people in the right roles is a requirement.
Through advanced certifications and training, the Bit-Wizards team stays up to date on all the latest technology, including cutting-edge hardware and software developments. This allows our MITS department to continuously analyze your network with a fresh set of eyes, offering innovative solutions to your business.
With the additional staff, resources, and expertise that Bit-Wizards brings to the table, it becomes a business decision on just how fast a firm wants to move to profitability. As an example, maybe XYZ Partners attempted to tackle IT before bringing on Bit-Wizards and found it overwhelming. That's when the MITS team came in to streamline processes and flush out issues. Financially, XYZ Partners could have saved money by handling IT internally, but at the added cost of delaying their profitability by over six months and missing out on over a million dollars.
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Is partnering with an MSP worth it?
Every single business has business decisions to make, and outsourcing is one of those decisions. In the case of a managed service provider like Bit-Wizards and a private equity firm like XYZ Partners, it makes business sense to outsource IT. This is the case for most private equity firms that need to reach profitability within a newly acquired business quickly. Managed service providers can quickly take control of a company's network and rapidly flush out problems because we do it every day.
There are many options when it comes to selecting an IT partner, and choosing the right partner can sometimes be as complicated as acquiring a new company. Partnering with Bit-Wizards as part of your overall business strategy aligns your goals with our processes. Our team takes the time and effort needed to learn how your firm conducts business, what the critical points are, who the leading players are, and how your new employees are onboarded within the IT process. We learn to anticipate your firm's moves and prepare in advance. As Bit-Wizards becomes more accustomed to your way of doing business, we'll increase your agility to navigate the acquisition and profitability journey.
Private equity firms can choose to figure out IT for themselves and spend months or even years before things are straightened out. This is the case for many businesses. But when speed, efficiency, and quality affect your bottom line, it's time to involve a managed IT services provider like Bit-Wizards. If your IT's holding your firm back from its true potential, then it's time to have a conversation with Bit-Wizards. We'll show you what a true partnership can do for your employees, operations, and bottom line.