Digital Transformation: do the right deal and follow through quickly

This article caught my eye: I agree with the general premise that some PE portfolio companies are still missing out on the full potential of Digital Transformation. However I was reminded last week, from a PE perspective, a key factor in achieving the full potential of Digital Transformation is doing the right deal in the first place and then following through quickly.

• Do the right deal: Industries or niches that have not typically benefited from "digitalisation" are likely to be good candidates. These are, by definition, likely to have underinvested in technology. A business with historical underinvestment in technology is likely exposed to cybersecurity vulnerabilities, but it also presents an opportunity for market-leading transformation that can disrupt a yet undisrupted industry. The right balance between risk and opportunity must be struck during diligence and measures identified to mitigate risk.
• Time is of the essence : A transformational “growth opportunity” identified during due diligence must be validated against the operational capabilities of the business and actioned as part of the Value Creation Plan with appropriate resourcing and time-bound objectives. Without that, delays set in and value is eroded.

A key factor in achieving this is integrated digital, operational, and technology due diligence, designed to identify realistic opportunities to kick-start digital transformation, without compromising on value-leakage risk.