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A solid IT and cyber strategy fuels strong platform growth

March 2, 2023 / 9 min read

Looking to maximize your investment’s exit value through a sound buy-and-build strategy? Technology and cybersecurity can be critical foundations on which to build.

Investment decisions can be attributed to a broad array of objectives, but unleashing scalable and efficient growth can be one of the most significant ways to optimize the investment. One way to accomplish this is via a buy-and build model, which combines add-on acquisitions with organic growth, but to create a consolidated business. What are the hallmarks of a successful buy-and-build strategy? For starters, a well-developed platform vision, strong management team, and a sound infrastructure.

What’s part of a sound infrastructure? An integrated IT and cybersecurity strategy that aligns with the strategic vision of the investment. While people in your organization might differ on prioritizing your IT and cybersecurity roadmap, the fact is, it’s crucial for your success. Your business depends on it — especially when you could potentially face failures related to a disjointed million-dollar or multimillion-dollar investment. A successful IT and cybersecurity strategic plan ensures you can respond to change, enables you to provide optimum services across your enterprise, as well as protects your assets, data, reputation, and staff. Do you know where to begin?

What are the hallmarks of a successful buy-and-build strategy? For starters, a well-developed platform vision, strong management team, and a sound infrastructure.

When you’re considering building out a platform, we recommend a straightforward process that begins with defining your strategies — both the platform growth strategy as well as your IT/cyber strategy. Next, understand the critical IT and cybersecurity elements related to platform investing. Finally, you’ll want to implement an IT and cybersecurity risk mitigation strategy. Let’s take a closer look at those processes and how they’ll work within your investment.

Define your strategies

Undoubtedly, your vision for your company includes growth, but before any vision can be achieved, there must be a plan. The strategy is that critical foundation that helps determine how you want to achieve scalable growth (through revenue, profit, market share, etc.) while identifying ways to optimize resources and manage cost. An effective vision will roadmap how you intend to get from where you are today to where you want to be in six months, one year, and five years when you prepare to realize the investment.

Platform growth strategy

Set the platform growth strategy before focusing on the IT and cybersecurity aspects. Typically, we see two forms of growth from a platform investment. There’s organic growth, such as building out your existing sales base, and then there’s planned growth through add-on acquisitions.

Determine the particular add-ons and your intended direction. Where will these add-ons be? Will you be expanding nationally with offices in three different time zones? Are you building a wider product/service offering or acquiring competitors for greater market share? Will your growth come from vertical add-ons? For example, if you bought a distributor and started building a platform there, but you eventually want to buy into the manufacturing supply chain, that choice will impact the IT/cyber tools required to support your broader, long-term needs. Each of these approaches can significantly impact how to deploy resources for the platform.

Another consideration is human capital. If you’re adding on multiple units, you might be centralizing the accounting department and your management office but not sales or customer service. Some changes will call for multisite platforms whereas others won’t.

IT/cybersecurity strategy

After you start mapping out your growth plan, the next step is identifying the gaps. In order to support the platform, you need an overarching IT and cybersecurity strategy. Consider these key components:

IT and cybersecurity considerations

Now, that your strategy is set, the next step is to look at IT and cybersecurity aspects. These are, in fact, two distinct areas with their own challenges and solutions. Let’s first address the IT considerations when building out a new platform:

Remember, a cyberevent that doesn’t result in data loss can still cripple the ability of the business to operate.

Now, let’s address cybersecurity. After all, it’s not if you’ll experience a security breach but when. Therefore, it’s vital for the acquirer to conduct cyber due diligence to fully understand both the value of the information assets it’s looking to acquire (for example, intellectual property) and the level of cyberthreats and vulnerability facing the target add-on. However, cyber resilience isn’t simply preventing the loss of data but rather continuing to operate in the event of a cyberattack. Remember, a cyber event that doesn’t result in data loss can still cripple the ability of the business to operate. Here are a few other cybersecurity considerations:

Mitigate risk

You’ve set your strategies and are aware of key IT and cyber considerations. How do you, then, manage risk within your platform? While you should solicit an external firm for help, there are proactive steps you can take internally to support the development of a security plan.

Have IT and cybersecurity platforms enabled you to increase the scalability at which you can grow the business? That’s the goal.

Finally, how do you quantify the payback?

Building a strong platform is a complicated — and, often, costly — process. It’s natural to wonder, is it worth it? You’ll likely bring on more staff and spend more on technology investments, and that makes the calculation of ROI a bit murky. Look at it this way: How have you obtained value from IT? Have IT and cybersecurity platforms enabled you to increase the scalability at which you can grow the business? That’s the goal. Hopefully, your investments have given you a foundation with scalable growth capabilities.

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