Private equity (PE) is reshaping the accounting industry, injecting capital into CPA firms at an unprecedented rate. While these investments open doors to growth, scalability and operational efficiencies, they also introduce complexities that demand strategic navigation. Among the many factors determining a successful transition, IT leadership often remains overlooked—despite its critical role in integrating systems, preserving institutional knowledge and ensuring that firms can effectively harness the benefits of PE investment.
Why Private Equity is Targeting CPA Firms
With more than $2.6 trillion in uncommitted capital, private equity firms are eyeing CPA firms as attractive investment opportunities. The recurring revenue model, deep client relationships and increasing demand for advisory services make CPA firms prime candidates for PE-backed transformation. However, while the financial incentives are clear, what is often underestimated is the complexity of integrating multiple firms under a unified operational model.
PE sponsors see untapped potential in many firms, identifying areas where technology-driven efficiencies can drive profitability. Yet, without experienced IT leadership guiding the transition, firms risk losing institutional knowledge, disrupting workflows and encountering significant operational inefficiencies.
The IT Leadership Imperative in PE Acquisitions
Recently, Netgain and Boomer Consulting hosted a webinar to explore the critical role of IT leadership in private equity acquisitions. During this discussion, industry experts shared insights on how firms can successfully navigate PE-driven transitions and leverage technology for strategic advantage.
“IT leadership is kind of the secret sauce,” said Marc Staut, Chief Innovation & Technology Officer at Boomer Consulting. “They have the keys to the kingdom—they know where all the data is, but they also understand how everything connects operationally.”
IT leadership plays a pivotal role in both pre- and post-acquisition phases. Pre-acquisition, strong IT infrastructure and scalable technology increase firm valuation. Post-acquisition, IT leaders ensure that systems are properly integrated, workflows remain seamless and that technology adoption aligns with PE objectives without compromising firm operations.
Key Contributions of IT Leaders in PE Transitions:
- Preserving Institutional Knowledge – IT leaders maintain an in-depth understanding of existing systems, ensuring that critical firm insights are not lost in the transition.
- Mitigating Operational Disruptions – By overseeing system integrations and process standardization, IT leaders prevent costly inefficiencies.
- Driving Strategic Innovation – IT leadership doesn’t just maintain technology; it identifies new opportunities for automation, data analytics and cloud-based solutions that can significantly enhance firm performance.
- Bridging Cultural Gaps – A firm’s technology environment is deeply tied to its culture. IT leaders help maintain continuity while integrating new systems in a way that aligns with firm values and employee workflows.
The Risks of Overlooking IT Leadership
“There’s a big miss in not involving IT leadership early in the process,” noted Kate Krupey, VP of CPA Practice at Netgain. “They know the firm inside and out, and they also know how to navigate PE-driven transitions to maintain efficiency and security.”
One of the most common missteps in PE-driven acquisitions is assuming that IT leadership can be easily replaced or outsourced. The reality is that IT leaders possess deep institutional knowledge that cannot be replicated overnight. Without their involvement, firms face risks such as:
- Fragmented Technology Environments: Many CPA firms operate on complex, interwoven software stacks. Poorly managed transitions can lead to disjointed systems that hinder productivity.
- Resistance to Change: Employees are often hesitant to adopt new systems, especially when changes feel imposed rather than strategic. IT leaders play a crucial role in facilitating adoption and training.
- Security and Compliance Gaps: CPA firms manage highly sensitive financial data, making cybersecurity a top priority. IT leaders ensure that security protocols remain intact throughout the transition process.
Enabling Growth Through Strategic IT Leadership
“IT leaders don’t just maintain technology—they drive strategic innovation,” Staut emphasized. “If firms want to make the most of PE investment, they need to leverage IT leadership to modernize infrastructure and streamline workflows.”
For PE-backed CPA firms to fully capitalize on their investment, IT leadership must be positioned as a strategic asset rather than an operational afterthought. This means involving IT leaders early in the acquisition process and empowering them to:
- Develop technology roadmaps aligned with both firm and PE objectives.
- Advocate for investments in cloud infrastructure, cybersecurity and automation.
- Foster collaboration between firm leadership, PE sponsors and third-party technology providers to ensure smooth integrations.
Looking Ahead: The Role of IT in the Future of CPA Firms
Private equity is not just about financial investment—it’s about transformation. As CPA firms scale, technology will be at the heart of their success. By recognizing IT leadership as a cornerstone of this transformation, firms can turn potential disruptions into competitive advantages.
Explore the Whitepaper and Webinar On-Demand
Netgain specializes in helping CPA firms navigate the complexities of private equity transitions. Download our latest whitepaper on IT leadership in PE acquisitions and watch our webinar on-demand for expert insights.
Our team provides expertise in IT strategy, cloud solutions and cybersecurity tailored to the accounting industry. If your firm is preparing for a PE acquisition, let’s discuss how IT leadership can drive long-term success.