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.

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:

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
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
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
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
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
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 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
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
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.