Evolving Business Information Systems (BIS) Usage
in Asset-Intensive Industries: What to Look for as an Investor

Abstract

Providers of business information systems solutions to asset-intensive industries such as industrial/manufacturing, transportation/logistics, and energy have a lot of allure for private equity and other investors these days. Companies in these industries have been slow relative to many others in adopting BIS solutions, but they’re racing to catch up as they’ve had to fight hard for every bit of incremental profit. Once buyers do pick solutions, however, they tend not to change out often. As attractive as this kind of rising demand and brand loyalty may sound from an investment perspective, the solutions these companies are buying have changed markedly over the past several years. It’s important for investors to understand the shift in spending trends to determine whether a potential BIS investment is in the right place in an evolving market.

TOPICS: Private equity, portfolio construction, analysis of individual factors/risk premia