As one of the most dynamic and entrepreneurial of industries, private equity thrives on driving growth and improving efficiency as part of ambitious value creation agendas.  

Information technology is critical to helping PE leadership teams meet this challenge – with its ability to create value through accelerating digital transformation, operational efficiencies, enhanced customer experience, data-driven decision making, and the support of ambitious growth plans, making it an essential tool from start-ups to mature, well-established businesses.

Challenges

Seamless carve-out / separation programmes

Technology plays a crucial role in the carve out process – enabling private equity houses to rapidly acquire and separate business units primed for value creation from larger existing entities.  

 As complex, risky undertakings that can potentially delay the value creation journey if poorly executed, it is imperative to have a well-planned approach to separation – from initial pre-due diligence through to cutover and stabilisation.  

 As part of a well-defined separation programme, IT will help – for example – to ensure that a new technology landscape is established that is securely segregated from the seller, whilst minimising disruption to the business and maintaining operational integrity during separation. 

Rapid integration of acquired businesses 

IT is pivotal to the successful integration of businesses acquired as part of a programme of inorganic growth to create value. Systems, processes, and data all need integrating – rationalising the number of applications required, whilst harmonising data, integrating workflows, and standardising IT policies across the business to be integrated – to help streamline operations, reduce costs, and enhance data analytics.  

 With private equity cycles being naturally limited in time, it is imperative that businesses are integrated as quickly as possible to realise an acquisition’s full business case. 

Enabling value creation through technology 

As dynamic, fast-moving organisations, technology functions in Private Equity owned companies need to constantly test that they are aligned to their organisation’s strategic objectives to avoid wasted effort and delayed value creation. It is therefore imperative to have a well-articulated digital and technology roadmap that sets out a clear plan for the standardisation and adoption of new technologies, which has been developed and bought into by business and IT stakeholders through an agile, collaborative approach that is designed to reduce resistance to change, and enable swift transition to the target state. 

Driving value from data 

Recent rapid advancements in technology, such as machine learning, have created new urgency for private equity houses looking to create value from the data their business’s hold. For example, post-acquisition integration, data analysis can help identify and release synergies, such as, improved insights into customer buying patterns, as well as enhance customer experience, through personalised marketing strategies.