Executives involved in succession planning are well-versed in the business of maximizing a firm’s value prior to potential sales. Profitability is always the name of the game, causing leadership to double down on the usual suspects: winning more new clients and maximizing assets under management. Sadly, even though technology has proven itself as a value driver, helping firms shave costs and grow more efficiently is often overlooked as a key component of the process. Afterall, technology gaps and outdated systems hobble a company’s future outlook, especially in today’s digital economy. When a firm settles for antiquated technology, growth requires the addition of more people, an equation that simply is not scalable.

Technology not only enables a company’s growth, but a fully integrated, scalable firm using modern, cloud-based systems is more valuable, commanding a higher price upon exit. This is especially true when it comes to the adoption of integrated workflow and the automation of back-office processes. This might include well-documented workflow processes, an updated CRM system, scanned documents, and content management software that automates reporting and ensures compliance. In fact, investing in content management software alone can increase the valuation of a firm up to $3.6 million, depending on the organization’s size. Content management technologies save considerable recurring costs by enabling corporations to pay less in overhead costs, store less paper, and hire fewer administrative employees. Automation also helps with record-keeping, which is paramount for succession planning.

Companies that are able to capture data, interpret it, gain valuable business insights, and act upon them are worth much more than companies that cannot. In the current business environment, knowledge is everything, so it is only fitting that companies are assigned value based on how much knowledge they can capture and use to their advantage.

Recently, we have witnessed stronger valuations, business-friendly changes to the tax policy, and the likelihood of rising interest rates, all of which makes the present a favorable time for owners to consider opportunities to sell. But technology is not just an integral piece of the puzzle for future exits. Whether your firm is eyeing a sale, merger, going public, or is simply looking to ratchet up your strategic planning, technology increases the value of your business and helps best position you for transitions of any nature.

All businesses, regardless of end-game or circumstance, need to pinpoint their own value drivers and actively work to increase their business’ value. Ideally, this process should begin with an independent business valuation and result in a 2-5 year strategic plan to help you capture more cash flow in the short term. Such a plan should involve updating all necessary systems, processes, and operating tools, ensuring that you continue to build incremental value for your business. Poor planning can minimize a lifetime of hard work and success. Meanwhile, careful preparation and attention to key business drivers will augment your gains, helping your firm reach its most profitable and prosperous future.