Creating a compelling technology value proposition pre-sale

In today’s competitive market, the role of technology in shaping business operations and enhancing value cannot be overstated. As private equity backed firms prepare for sale, articulating a compelling technology value proposition is crucial. The proposition needs to not only highlight the depth, maturity, and potential of the firm’s technology assets, but also reassure possible buyers of the company’s future profitability and growth trajectory.

However, in our experience, we often find firms struggle to develop an impactful technology value proposition (TVP) and therefore seek our guidance and support through the process. For those who invest the time, the TVP is a proven and critical tool to make a compelling statement – articulating the unique value of a company’s technology and, just as crucially, its capabilities in leveraging this technology to create value.

How to Create a Compelling Technology Value Proposition

We believe the following elements are key:

1. Alignment with Business Objectives

The starting point for any technology story is its’ seamless integration with the overarching business objectives – making technology not just merely a support function, but a central pillar in the business strategy. Potential buyers should see how technology can drive core business outcomes, such as improved customer experience, enhanced product quality, or expanded market reach.

2. Demonstrated Return on Investment from Technology

A persuasive TVP will be backed with quantifiable data that spells out the return on technology investments. The data needs to go beyond cost savings and efficiency gains, to show how investments in technology have translated into market growth, profitability, and customer base expansion. Metrics such as time-to-market reduction, customer retention rates, and operational downtimes can help to paint a compelling case.

3. Future Growth Potential

Future-proofing is a major concern for any potential buyer. It is critical that the TVP clearly articulates how the existing technology infrastructure and applications will support future business strategy, as well as innovation. This includes scalability and portability of technology and ability to adapt to emerging technologies, also how these facilitate entry into new markets or creation of new product lines. Highlighting ongoing projects, planned upgrades, or potential innovations can significantly enhance the attractiveness of the proposition.

4. Competitive Differentiation

A robust TVP identifies and communicates unique technology assets – whether mission critical systems, bespoke software solutions, or advanced data analytics capabilities. It is crucial the TVP demonstrates how these technologies provide a competitive advantage – for example, through enhanced product features, superior service delivery or unique customer insights.

5. Compliance and Security

In an era where data breaches are increasingly costly and damaging, a strong emphasis on cyber security and regulatory compliance enhances a firm’s technology value proposition. Articulating the proactive measures being taken to secure systems (e.g. DevSecOps culture), safeguard customer data, and ensure compliance with global data protection regulations is key. This not only reassures potential buyers of the robustness of the technology but also its readiness for regulatory scrutiny.

6. Integration and Interoperability

A key concern for acquirers is how well a company’s technology can integrate with existing systems. The TVP should address this by highlighting the interoperability of the company’s technology solutions with common industry platforms. Showcasing flexible APIs, combability with major software, portability, and ease of adoption can make the technology stack more appealing to a potential buyer who values quick and seamless integration post-acquisition.

A compelling technology value proposition can significantly enhance the attractiveness of a company to potential buyers – providing clear evidence of how technology is delivering value and is woven into the fabric of the business’s future potential. As a firm gears up for sale, investing the time for a well-crafted technology value proposition is essential to elevating marketability and helping achieve premium valuations. By articulating the strategic importance of technology within the business, sellers can better position themselves in a competitive market – engaging more deeply with prospective buyers, driving interest, and facilitating smooth sale transactions.

In our experience, we believe it is essential that a strong TVP is underpinned by a tailored communication strategy that is aligned to the strategic interests of potential buyers. Whether the focus is on growth potential, market expansion, or operational efficiency, a well-crafted story that weaves together empirical data and technical details, should be supported with visual aids, such as infographics and dashboards to make complex data accessible and engaging. Additionally, testimonials and endorsements from technology partners and industry experts, as well as hands-on demonstrations, can help bring to life tangible evidence of impact to help secure an optimal sale.

If you would like to speak to Paul Atherton further regarding this insight, send your enquiry to contact@masonadvisory.com. 

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