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“I think PE firms have an expectation that controllers take a more active role in value creation, and there is recognition they may have to invest in those skills,” says Derek Steinhiser, EY Americas Private Equity Assurance Advisory Leader. “PE-backed controllers need to be able to show that their organization is progressing towards their value thesis — because the enterprise is under pressure to execute against it.”
67% of PE-backed controllers believe their teams are stuck in the back office
When it comes to the main obstacles preventing PE-backed controllers from taking more proactive roles to drive innovation in their teams, 67% believe their teams are more focused on traditional back-office responsibilities vs. 42% of all survey respondents. While some of this is due to the size, scale, complexity and history of these companies (e.g., privately owned, carve-outs, etc.) there is a clear expectation to have a more forward-looking controllership function. We consistently see that PE-backed organizations provide controllers the opportunity to be more involved in the business, which will also increase the scrutiny of the insights they bring, but also the potential for developing CFO-ready skills.
“In PE-backed organizations, there is typically an opportunity to better understand the business from the controller,” says Derek Steinhiser, EY Americas Private Equity Assurance Advisory Leader. “I’ve seen controllers in these organizations be brought to the forefront because they know more about how it operates, and they reach beyond accounting to see metrics, actions and initiatives that are the most important to the business.”
70% of PE-backed controllers’ time is already spent making data-driven decisions
The demand for sophisticated data analysis abilities in the finance function is growing faster than most organizations can meet it. Controllers are increasingly expected to champion emerging technologies and advocate data-driven decision-making, which is due to a shift powered by the need for faster, more accurate insights to support strategic decisions based on comprehensive knowledge of financial information across the organization.
PE-backed controllers indicate they spend about 70% of their time engaged in data-driven decision-making and technology use to drive value and promote business growth, slightly higher than 67% of the time for non-PE controllers.
However, PE-backed controllers appear to be lagging slightly in their use of generative AI (GenAI) for tasks previously performed manually. Only 54% report accelerating manual tasks with GenAI, while 67% of non-PE controllers are doing so.
Non-PE-backed companies are investing about 14% more in data analytics and reporting skills than private equity-owned organizations, according to respondents. In what could be a correlated finding where this gap will close quickly, PE-backed controllers are having an easier time hiring the data talent they need. Only 42% say they are struggling to hire team members with the necessary data analytics and reporting skills, compared to 58% of the broader sample.