Digital transformation in private equity

With pricing multiples and competition for deals at historic highs, private equity can either embrace digital transformation or be outpaced by it. Digital capability of a PE firm holds the key to value creation and competitive advantage.

Related topics Private equity Digital Cybersecurity Consulting Strategy and Transactions

The team

Glenn Engler

Glenn Engler

EY-Parthenon Global Digital Leader, EY Americas Strategy and Transactions Digital Strategy Leader

Susanne Vanner

Susanne Vanner

EY-Parthenon Partner, Transaction Strategy and Execution, Ernst & Young LLP

Paul Harragan

Paul Harragan

EY-Parthenon Associate Partner, Strategy & Transactions, Ernst & Young LLP

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What EY can do for you

Digital transformation enhances experiences for customers and stakeholders, whether they are end consumers, business customers, employees, business partners or investors.

The private equity value creation agenda has become a key driver of EBIDTA and thus overall deal exit returns, with digital both enhancing traditional value creation levers and enabling entirely new ones.

For private equity houses, the time has come to activate a digital solution strategy throughout the deal lifecycle and across the portfolio. EY can support a successful digital transformation with the following services:

  • Private equity Digital Readiness Assessment (DRA)

    Executives must understand their company's digital maturity to prioritize investments in digitization capabilities.

    DRA insights can improve a company’s positioning:

    • Increasing competitive differentiation by identifying key strengths and blind spots versus peers in their sector
    • Building organizational digital alignment by enabling data-driven conversations across leadership
    • Identifying the appropriate talent that can execute the digital strategy

  • Digital business model strategy development in private equity

    Executive teams must examine their business strategy through a "digital lens" and come up with a clear digital transformation strategy to compete and drive growth in a digital world.

    Understanding and prioritizing digital investment opportunities empowers executives to:

    • Differentiate and prioritize opportunities that are strategically advantageous from those that are merely attractive
    • Deploy capital and resources in alignment with their business model and strategic objectives
    • Attribute revenue to digital investments and initiatives

  • Digital customer experience strategy and roadmap in private equity

    To improve customer experience, it is critical to understand how it has changed in today's digital technology landscape.

    Connecting executive teams to the needs and desires of their customers can:

    • Drive revenue by optimizing the customer journey and experience for conversion
    • Improve satisfaction, brand integrity and loyalty
    • Increase efficiency and agility by simplifying, standardizing, and automating back-end processes

  • Digital innovation workshop in private equity

    A robust innovation agenda requires processes and values that institutionalize and prioritize both self-disruption and speed-to-market.

    The digital innovation workshop will help companies realize the following benefits:

    • Internal alignment around prioritized digital innovation objectives, providing a streamlined roadmap to modernizing the business
    • Accelerated development of innovation strategy and identification or planning of high priority initiatives
    • New perspective on the effective utilization of novel technologies and innovative innovative processes from experts

  • Cybersecurity in private equity

    An adverse cyber event is a clear and present threat that requires companies to build defensive capabilities.

    As cyber processes are systematically assessed, standardized, and improved, executive teams gain:

    • Protection from critical cyber threats (data breaches, phishing, malware, and more)
    • Visibility into weaknesses and vulnerabilities that expose a business to a potential attack
    • A baseline of elevated, consistent and standardized performance across the entire portfolio
    • The ability to comply with increasingly complex regulatory requirements

  • Intelligent automation in private equity

    Information-driven processes require digital solutions that reduce friction, improve accuracy and optimize workflow.

    The Intelligent Automation assessment prioritizes beneficial investments in technologies that transform business operations in tangible ways:

    • Building process knowledge to enable automation solution development, including cost-benefit analysis by process
    • Automating and standardizing organizational processes, driving time savings, increased productivity, and cost reduction
    • Monitoring and validating key assumptions and initiate implementation through an agile, human-centric approach

  • Supply chain in private equity

    Supply chains that are inflexible and inefficient must reinvent themselves to thrive in a post-COVID world.

    Executive teams that implement EY's Digital Supply Chain will realize the following benefits:

    • Increase in productivity, agility, and resilience via increased process efficiency
    • Optimized working capital and end-to-end transparency within the supply chain
    • Reduction in supply chain costs, such as labor, energy, water, maintenance and waste or product recall

  • Internet of Things (IoT) in private equity

    Enabling IoT and connecting smart products is difficult and costly to achieve, and failure is rampant.

    Successfully integrating IoT and machine learning into core business processes changes how and where decisions are made, and who makes them.

    • Driving profitability by enabling cost savings in inventory, production, logistics, complexity, quality and maintenance
    • Increasing productivity by optimizing asset utilization through improved tracking
    • Increasing efficiency due to heightened connectivity between products

  • Data strategy and governance in private equity

    Companies face critical gaps in data governance across core areas such as market intelligence, business intelligence, technology, operations and culture.

    A sound data science strategy and governance program helps businesses achieve desired target states, maximizing value and minimizing risk.

    EY teams offer various solutions to address data strategy, management, governance, architecture, consumption and PMO/OCM.

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