As more corporations move under the ownership of private equity firms, CIOs often fear their technology budgets will fall victim to cost restructuring. Privatization, however, actually helps the information technology structure within the company. It places enhanced emphasis on technology as a critical resource for growth. Privatization also gives the CIO more control and autonomy, and significantly reduces regulatory requirements. CIOs can use this opportunity to redefine and strengthen their role and gain a seat at the executive table, but it takes careful navigation to capitalize in this brave new world.
As more corporations are acquired by private equity firms, CIOs may find themselves bracing to prepare for unknown impacts on IT strategy, budgets, and in-flight initiatives. Will the new owners bring in their own IT leadership, focus on cost restructuring, or redirect current technology budgets and programs? And how closely will the operating units of the acquiring private equity firm engage with day-to-day IT governance activities?
With a surge in private equity investment over the past two decades, more and more CIOs are learning how to effectively align the strategies, styles, and cultures of IT organizations with the management principles that characterize most private equity firms. CIOs who successfully prevail are finding that privatization can help transform IT operations. It can accelerate change and drive strategic investments, which in the prior world are often slowed by organizational inertia or other factors. CIOs are using this opportunity to drive effective change, generate top-line revenue growth, redefine internal governance models, and achieve new levels of cost-effectiveness.
