How digital maturity is becoming the defining factor in whether portfolio companies outperform or underdeliver.
By Siva Vysyaraju
Chief Information Officer, Think Power Solutions
When I started my career in IT, Private Equity firms measured performance in EBITDA multiples and cost takeout. Technology was the utility bill: something you minimized, not something you maximized. The CIO, if a company even had one, was primarily a maintenance role. Keep the lights on, keep the servers running, keep the auditors satisfied.
That world is largely gone now.
Digital maturity is no longer a nice-to-have. It’s the backbone of any serious value creation plan. According to PwC’s 2025 Private Equity Trend Report, 88% of PE firms have already turned to data analytics or generative AI for company valuations, and 80% expect to use them for due diligence within the next year. That’s not a technology trend. It’s a signal that the firms treating IT as an afterthought are falling further behind the ones that don’t.
Technology as a Catalyst, Not a Cost Center
Tim Corrigan, CIO of World Insurance, put it plainly: “All roads lead to IT. Every aspect of the business is dependent on some type of technology.” In a PE portfolio, that dependency cuts both ways. When technology works, it accelerates everything. When it doesn’t, it becomes a drag on every other initiative you’re trying to run.
The impact shows up most visibly in cash flow. When quoting, billing, and customer records live in disconnected systems, even routine transactions stall. I’ve worked with companies where a six-week billing cycle had just become the norm. The work was getting done, but the systems couldn’t talk to each other. Consolidating those workflows onto a single platform cut that cycle to under ten days. That’s not just a cleaner operation; it’s months of working capital that wasn’t available before.
The same thing plays out with margin visibility. Scattered data means delayed decisions, and delayed decisions mean margin erosion goes undetected until it’s already done real damage. With the right analytics in place, leadership teams can see where time and money are bleeding in real time and act on it before the quarter-end numbers tell them what they should have known three weeks earlier.
The First Hundred Days Define the Next Three Years
Post-close integration is where investment theses are won or lost. The first hundred days after a deal closes often determine whether synergy targets are captured or quietly shelved. Companies that arrive at close with aligned workflows, connected systems, and clean data have a structural advantage over those scrambling to reconcile spreadsheets and renegotiate vendor contracts.
This is where proactive technology investment really pays off. Firms that build integration readiness into the pre-close playbook, treating it as a strategic priority rather than something to sort out later, consistently outperform on synergy capture timelines. And when it comes time to exit, systems that produce reliable, auditable financial reporting aren’t just operationally useful — they give buyers confidence. The stakes here are real. The CFA Institute Research and Policy Center reports that a flawed due diligence process contributes to an M&A failure rate of between 70% and 90%, as buyers walk away or discount their offers when they can’t trust the numbers. A clean, well-documented data trail does the opposite. It shortens diligence timelines, reduces the reserve buyers hold back against uncertainty, and lets the seller defend valuation from a position of evidence rather than assertion. Modern infrastructure signals that the growth story is real and repeatable.
Technology as a Source of Organizational Confidence
Poorly managed systems create a particular kind of anxiety that’s hard to name but easy to feel: a nagging sense that you can’t fully trust the numbers behind your forecast, that compliance is one audit away from a problem, that growth will outpace your ability to manage it. That anxiety has a real cost. It slows down decision-making, fragments leadership attention, and quietly erodes the kind of trust that high-performing teams need to operate well.
When technology is treated as a core capability rather than an overhead function, that anxiety goes away. I saw this in a field services transformation where we deployed an integrated work management system that connected field teams, finance, and compliance into one workflow. Billing delays dropped by three weeks. Leadership got real-time visibility into project margins for the first time. The improvements weren’t dramatic on day one. But they compounded: faster decisions, more accurate forecasts, fewer escalations. Over time, the business stopped constantly reacting and started actually planning.
“When you invest in the right systems early, you don’t just avoid problems, you create options. And in Private Equity, options are what separate average outcomes from exceptional ones.”
According to Boston Consulting Group, PE firms that invest in digital transformation, things like upgrading ERP systems, adopting data-driven pricing, and improving customer engagement, build more agile companies that scale faster and outperform competitors. Layer in AI capabilities on top of a solid digital foundation, and that advantage compounds further.
The CIO’s Role Has Fundamentally Changed
The CIO of five years ago was essentially a technology steward. The CIO of today is something closer to a value architect. In a PE context, that means understanding not just the technology stack but the investment thesis, the operating model, and the exit timeline, and making sure all three are actually in sync.
More PE firms are recognizing that keeping technology leadership in-house, rather than relying solely on portfolio company IT departments or outside consultants, produces better outcomes. Not because external expertise isn’t valuable, it often is, but because sustained transformation requires someone who holds both technical depth and business context at the same time, and who stays accountable for results across the full holding period.
The best PE-backed CIOs I’ve seen aren’t the ones who say yes to everything. They’re the ones willing to say: here are the three or four technology bets that will determine whether this company hits its potential, and here’s exactly how we’re going to make them pay off.
Trust, Resilience, and the Long Game
Technology leadership in a PE environment isn’t just a technical function. It’s a risk management function. Cybersecurity is one of the most underpriced risks in PE portfolios. A single breach can unwind years of operational work and create serious liability at exactly the wrong moment, which is usually right before an exit. Governance frameworks like access management, AI usage policies, and change management protocols aren’t just compliance boxes to check. They’re how you build institutional trust in a systematic way.
At Think Power Solutions, we made SOC 2 certification a non-negotiable operating standard. Not because a client required it, but because trust has to be earned and demonstrated, not just claimed. We documented policies across AI usage, user access, and change management, and completed a successful SOC 2 audit and certification renewal by year-end. The process forced discipline across the whole organization, and that discipline paid off in ways that went well beyond the certificate: cleaner processes, sharper accountability, and a team that genuinely takes operational integrity seriously.
When I talk to PE leadership about this, I put it simply: you can build a great company, but if you haven’t built it on systems people trust, you’re always one failure away from a conversation you really don’t want to have.
Technology Is Where the Value Lives
The PE firms that will lead the next decade won’t be the ones who treat technology as an overhead line item to minimize. They’ll be the ones who treat it as a real strategic capability: something that accelerates cash flow, strengthens margins, reduces risk, and builds the operational foundation that makes every other bet more likely to pay off.
The business leaders who understand this are already acting on it. They’re weaving technology strategy into deal diligence, standing up integration infrastructure before close, and building governance frameworks that give management teams the confidence to move faster without losing control.
Technology isn’t quietly working in the background. It’s the multiplier that amplifies everything else you put into a company. If you want to build value that actually lasts, the kind that holds up through due diligence, management transitions, and market cycles, that’s exactly where you start.
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