The Role of Technology Stacks in Enterprise Management and Acquisitions

Financial information is at the forefront and center of understanding and interpreting business performance. Integrating operational, inventory, and other key data points helps build a more complete picture of your business performance – all while keeping financial results at the center.

The first step is to assess your company’s entire technology stack and determine whether those systems are optimized to best support your business. Review the technology platforms your company uses, what they do, and how they work together; then determine if further integration is needed to streamline operations and improve access to key data.

Create a checklist that includes:

• The technology tools your company currently uses and the processes they relate to;

• How the technology integrates with the company’s financial platform and with each other (e.g. does CRM integrate with FSM?);

• What features are integrated into the processes, e.g. customer payments; and

• What compliance solutions are your customers using?

An integrated technology stack can do wonders for your business. When the different technologies that run your business work together, it means less manual work for your staff and a deeper look at key data to help you run your business better. Your business immediately gains value with an integrated system – simply because it provides access to clear, concise data about your business performance.

That said, sometimes creating an integrated technology stack creates significant challenges or business-changing decisions. For example, if your financial platform doesn’t play well with other software, integration can be difficult. Deciding to change your financial platform is a tough decision that requires a significant investment of time, money, and resources. Take the time to weigh the costs and benefits when considering such a major change.

The Role of Tech Stacks in Mergers and Acquisitions

Investors want to know the intimate details of your business. They want data on the subset of fire and security services you offer, the types of systems you install and service, and your customer base. They want deep insight into where your revenue is coming from and what the different types of revenue streams are, such as recurring inspections, managed services, and installations. They want data on your team and how it operates, including performance and sources of additional revenue.

These are just some of the key metrics that investors and private equity firms look at to determine the health of a company and how it will grow. An integrated technology stack makes this process infinitely easier.

If you are interested in selling or seeking investment, up-to-date, integrated systems that drive operational efficiency inspire confidence in potential investors. On the other hand, outdated systems can expose inefficiencies, significant errors and inaccuracies, and can cause investors to flee the other way.

Key Indicators

No one will invest without doing their due diligence, and technology stacks can help a business owner provide a series of key metrics that show profitability and performance. Here is a small sampling of the key data points investors look for in fire and safety companies:

• Number of daily inspections and/or service visits;

• The revenue that each technician brings in in a given month or year;

• Recurring revenues versus installation revenues;

• Margin analysis;

• Days Accounts Receivable (DSO), i.e. the number of days it takes to collect receivables from customers.