Whitepaper: Private Equity Intelligence

For private equity firms, being truly digital means empowering portfolio companies with a top-to-bottom “digital mindset.”

In today’s private equity world, the stakes are higher than ever. Deal competition and soaring valuations for the most attractive business information companies has “priced-in perfection.” This means flawless deal-making and post-close execution are not only rewarded they’re required to deliver the valuations investors demand. 

The necessity then to adopt a comprehensive, digital strategy to achieve growth and competitive advantage may seem obvious, but in practice the depth of digital acuity in many organizations is at best uneven. Ask your top portfolio executives today if they have a digital strategy – and they will likely say “yes.” Ask them if it is effective, visible and engages all company stakeholders – and you may get a more nuanced answer. That’s because “having a digital strategy” and “being digital” are worlds apart. High growth, truly successful and competitive firms don’t “bolt-on digital, they are digital at their core.”

Companies who make digital an essential part of their corporate “DNA” achieve growth, build defensible marketplace moats and sustain value creation more effectively than those who fail to develop a top-to-bottom digital culture. And, nowhere is “being digital” more important than in the highly competitive business information services industry where innovative data capabilities are rapidly transforming the market – and customer expectations are high and getting higher.

Adopting a digital mindset enables companies to more effectively execute growth by enabling employees to work in lockstep to identify new opportunities, create new products, differentiate their services, and respond quickly to customer needs. Ultimately, digital thinking needs to drive the strategic decision process for every action and initiative. Companies that truly master a digital mindset and strategy are destined to grow faster in their markets and achieve higher valuations.

Digital in action

By using a “digital lens” to identify and assess targets, private equity firms can bid with greater confidence and win more of the best deals. Digital technology assessments make sure IT capital expenditures align with business needs, and investments are sequenced properly for maximum efficiency. Market mapping identifies “white spaces” of opportunity for new digital products and services. And, by empowering portfolio management with a top-down commitment to a connected digital approach, portfolio companies more quickly reach their market potential. Absent this digital mindset, companies may find themselves suffering execution delays and missteps that can be unforgiving and costly.

To avoid these dangers, top management must set the agenda for a digital culture by articulating an operational vision and strategy. When senior executives broaden the ownership of digital strategy beyond a technology-centric orientation to the broader culture within the entire company, all employees can respond and are better prepared to meet the demands of a competitive marketplace.

Digital strategy is most effective when considered throughout the deal cycle; from deal discovery, to due diligence and bidding, to post-close operations, product development and expansion, to deal exits. In this report Digital Prism Advisors explores the state-of-the-market of private equity and business information services. We introduce key concepts, operating principals and strategies to help private equity principals – and their portfolio company CEO’s – think digitally in ways that will optimize growth and maximize asset valuations.


Contents:
  1. Execution is critical as deal competition has “priced in perfection”
  2. Apply a digital lens to find, bid and win better deals
  3. Develop a digital product roadmap
  4. Drive efficiency and deliver new value through automation
  5. Align technology architecture and investment with business strategy
  6. Adopt new operating models to sustain value creation