Private equity (PE) firms operate with a clear mission: maximize value creation, optimize operations, and drive significant returns on investment (ROI). For small-cap and mid-cap private equity firms in Chicago, managing their portfolio companies’ IT infrastructure is a crucial but often overlooked aspect of achieving these goals.
While PE firms focus on growth, acquisitions, and operational efficiency, many of their portfolio companies struggle with IT challenges that can hinder scalability, security, and overall performance. NextGen IT Advisors works with PE-owned firms to provide Co-Managed IT solutions that optimize IT strategies, reduce inefficiencies, and improve ROI across multiple industries.
Why IT Strategy is Critical for Private Equity-Owned Companies
For PE firms investing in small- and mid-sized companies, IT is often an area of risk and opportunity. Many companies lack a formal IT roadmap, operate with outdated infrastructure, or have fragmented systems due to mergers and acquisitions. Without an effective IT strategy, PE-backed businesses risk:
⚠ Inconsistent security policies that create cybersecurity vulnerabilities.
⚠ Operational inefficiencies due to legacy systems that hinder productivity.
⚠ Poor IT scalability, making expansion and digital transformation difficult.
⚠ High IT costs without a clear return on investment.
PE firms that fail to optimize IT infrastructure across their portfolio risk seeing diminished valuations and increased operational costs. However, implementing a structured IT strategy through Co-Managed IT solutions allows these companies to scale efficiently while ensuring security, performance, and cost control.
What is Co-Managed IT and How Does It Benefit PE-Owned Companies?
Co-Managed IT is a partnership between a company’s internal IT team and an external Managed IT Services Provider (MSP). Rather than fully outsourcing IT, businesses leverage specialized expertise while maintaining control over their IT operations.
For PE-backed firms, Co-Managed IT enhances IT capabilities without adding significant overhead costs. Instead of hiring a large in-house IT team, portfolio companies can access enterprise-grade IT services through a flexible, scalable partnership with an MSP like NextGen IT Advisors.
Key Benefits of Co-Managed IT for PE-Owned Companies
✅ Scalability Without Overhead – Gain access to advanced IT resources without hiring a full team.
✅ Cybersecurity and Compliance – Meet strict security regulations and minimize cyber risks.
✅ M&A IT Integration – Standardize IT systems across newly acquired companies.
✅ Cloud Optimization – Improve efficiency with cloud-based solutions tailored for growth.
✅ Cost Efficiency and ROI – Reduce IT spend while maximizing performance.
By implementing Co-Managed IT strategies, PE-backed firms in Chicago can significantly reduce IT complexity, increase security, and improve operational efficiency, ultimately enhancing business valuations.
How NextGen IT Advisors Helps Private Equity Firms Optimize IT Strategy
At NextGen IT Advisors, we have extensive experience working with private equity firms and their portfolio companies to develop custom IT solutions that align with business goals. Our approach is designed to support growth, security, and cost-effectiveness for businesses in various industries, including manufacturing, healthcare, professional services, and logistics.
1. Aligning IT Strategy with PE Investment Goals
PE firms focus on value creation through operational improvements, cost reduction, and growth. However, many portfolio companies operate with legacy IT systems that create inefficiencies.
NextGen IT Advisors conducts in-depth IT assessments to align technology investments with the broader financial and operational goals of the PE firm. Our Co-Managed IT solutions focus on:
✔ Streamlining IT infrastructure to reduce costs and improve efficiency.
✔ Implementing cloud solutions to support business scalability.
✔ Standardizing IT operations across multiple portfolio companies.
By ensuring that IT supports business objectives, PE-backed companies can achieve higher profitability and improved valuation multiples.
2. Enhancing Cybersecurity for Portfolio Companies
Cybersecurity is a growing concern for private equity firms, as data breaches and ransomware attacks can lead to financial losses and reputational damage. Many small- and mid-sized companies lack robust cybersecurity frameworks, leaving them vulnerable to cyber threats.
NextGen IT Advisors helps portfolio companies implement enterprise-level security solutions without the high cost of an in-house security team.
🔐 24/7 Security Monitoring – Detect and respond to threats in real time.
🔐 Compliance Readiness – Ensure adherence to GDPR, HIPAA, and industry regulations.
🔐 Zero Trust Security Models – Strengthen access control across the organization.
🔐 Endpoint Protection – Secure all devices and prevent data breaches.
By proactively securing IT environments, private equity firms reduce risk exposure and protect the value of their investments.
3. IT Integration and Standardization for Mergers & Acquisitions
When PE firms acquire new businesses, they often face IT integration challenges. Each acquired company may have different IT systems, software platforms, and security policies, leading to incompatibility and inefficiencies.
NextGen IT Advisors specializes in IT standardization across mergers and acquisitions, helping PE firms quickly integrate new companies into a unified IT framework.
Our approach includes:
🔄 Cloud Migrations – Moving portfolio companies to scalable cloud environments.
🔄 Network Standardization – Creating a unified, secure IT infrastructure.
🔄 Software Consolidation – Reducing redundant systems and improving data flow.
🔄 IT Due Diligence – Assessing IT risks before acquisitions to prevent costly surprises.
A structured IT integration process ensures that M&A transitions are smooth, cost-effective, and aligned with business growth objectives.
4. Driving ROI with IT Cost Optimization
PE-backed firms are under pressure to maximize cost efficiency while ensuring that IT investments deliver measurable ROI. Many portfolio companies overspend on IT due to fragmented systems, unnecessary software subscriptions, and inefficient processes.
NextGen IT Advisors helps businesses:
📉 Reduce IT operational costs by identifying and eliminating wasteful spending.
📉 Optimize cloud infrastructure to improve efficiency and lower expenses.
📉 Implement automation to streamline IT support and reduce manual workloads.
📉 Leverage predictive analytics to forecast IT needs and avoid unnecessary upgrades.
By implementing data-driven IT cost management strategies, we help PE-owned companies increase EBITDA, leading to higher exit valuations for private equity firms.
NextGen IT Advisors: Your Partner for IT Success in Private Equity
Chicago’s small-cap and mid-cap private equity firms need an IT partner that understands the complexities of managing multiple portfolio companies while driving cost efficiency and value creation. NextGen IT Advisors has worked with leading PE-backed firms to develop scalable, secure, and cost-effective IT strategies that align with investment goals.
Whether your firm is looking to:
✅ Standardize IT across a portfolio
✅ Enhance cybersecurity
✅ Optimize IT costs for higher ROI
✅ Integrate IT systems post-acquisition
NextGen IT Advisors can help.
Conclusion: Unlock IT Value for Your Portfolio Companies
Private equity firms that prioritize IT strategy across their portfolio will see higher valuations, stronger operational performance, and reduced risk exposure.
With Co-Managed IT solutions from NextGen IT Advisors, PE-owned companies can enhance security, optimize infrastructure, and drive business growth—all while maintaining a cost-effective IT approach.
🔹 Looking to optimize IT for your portfolio companies? Let’s connect and discuss how we can create a customized IT strategy that aligns with your investment goals.
📩 Contact NextGen IT Advisors today for a consultation.
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