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The tide is changing for private equity firms. In technology, private equity firms have found a fierce enabler for continued growth, and one that has shone the light on organizational benefits to be had far beyond the IT closet.
From the start, the goal of the Private Equity CTO Survey was to more closely examine the evolution of the private equity industry as driven by – and driven to – technology. In reaching the top IT executives and chief technology officers (CTOs) at these firms, this survey highlights their priorities, successes and even failures, and in doing so, sheds light on this industry that has risen to the forefront of the greater financial community.
Our Private Equity CTO Survey encompasses four primary sections: business priorities, cybersecurity, outsourcing trends and the evolution of the private equity CTO.
If one thing is to be derived from the advent of information technology, it is that IT enablement extends well beyond the recesses of the Communications Room. Accordingly, technology decision-making is also impacted by an organization's business objectives, and the two work in alignment to derive achievements across the firm. In this section of the survey, we'll highlight areas where business goals have impacted IT budgets and where private equity firms plan to focus their attention in the coming year.
It's likely no surprise to you to see security highlighted as part of a technology survey, but some of the survey's findings may surprise you. As we continue to track the evolution of the hack and the growing cybersecurity threats that permeate the industry, it's critical to understand how private equity firms do and should address security risk and how their cybersecurity strategies may be impacted by their previous experiences. The prevalence of cyber issues experienced by private equity firms surveyed is significant – and if future budgets are any indication, PE executives believe 2017 is a year to ensure this growing concern is taken seriously.
We've long known that there are advantages and disadvantages to managing IT in-house versus outsourcing, and that debate will continue for the time being. Private equity firms are leveraging both strategies seemingly effectively, as evidenced by their future plans. The use of the private cloud endures for private equity firms, who most often rely on the platform to support a wide range of IT functions. The public cloud and hybrid strategies remain secondary choices and greatly vary in popularity depending on the use case.
The Private Equity CTO
The role of the private equity firm's chief technology officer has evolved, arguably, more than any other C-level position in recent years (perhaps with the exception of the chief compliance/risk officer). With technology supporting and impacting more day-to-day business functions than ever before, the CTO has taken on a wide range of responsibilities to align more with the overall organization and address growing investor and regulator concerns. Oftentimes tasked with a multi-functional role in accordance with IT security needs, the private equity CTO's role will continue to transform to meet the revolving demands of the industry as a whole.