THE RESULTS ARE IN: 48% of respondents believe that post-acquisition value creation is the space private equity should be targeting with AI and advanced analytics.
This was the finding of a LI poll I posted last week – and confirms my own opinion that data science and analytics presents the next wave of value for executives and investors alike.
In an increasingly competitive environment – where financial engineering, balance sheet optimisation and operational efficiencies have become largely commoditised – PE managers and their portfolio companies must seek new pockets of value to lift performance and returns.
And data is the differentiator.
After all, analytics naturally stands on the shoulders of digital transformation and the vast technology investments made over recent years.
But to which companies is analytics most suited?
Simply, to all companies that have ‘a lot of something’!
That could be: transaction/POS information, SKUs, client/customer databases, production indicators, supply chain tracking, people, vehicles, ....
This data can then be analysed and modelled to:
🎯 Generate new revenue streams
🎯 Optimise/automate operations
🎯 Improve decision making
So, what's the call to action?
PE managers need to be working with portfolio company CEOs to answer the question:
➡️ How effective is your organisation at leveraging data and analytics to power its business and operational models?
As Goldman Sachs’ Luke Flemmer recently concluded in a Private Equity International interview: “The value creation process is becoming more demanding and so operators need to be canny about using data to boost performance.”
PS – thanks to all those who participated in the poll!
Originally published on LinkedIn: