Unleash the Power, the Power of Digital

  • Private equity
  • 2/16/2022

Data and Automation for 2022 by Michael Pelletier As was touched on in the recent “Year in Review and 2022 Insights” post, the challenges to continued growth in the ...

Data and Automation for 2022 by Michael Pelletier

As was touched on in the recent “Year in Review and 2022 Insights” post, the challenges to continued growth in the Private Equity and Venture Capital (PEVC) space are being exacerbated by hiring challenges and an increasingly distributed workforce.  When working with our clients we typically evaluate the opportunity to transform through three different lenses – People, Process and Technology.

People

The workforce continues to shift with individuals leaving, shifting priorities, and seeking flexibility in how they deliver.  We’ve seen that it is possible to continue to drive deals without everyone at the same physical table.  Is this sustainable?  It can be. However, there’s a deliberate focus that organizations need to place on many aspects of day-to-day interactions if a hybrid workforce is something that they see as strategic. It’s also a case where it isn’t just one person’s responsibility. 

While it may be incumbent on an employee to make sure they stay productive, keep in close communication with their team, and still deliver that QoE report on time, there is also a set of responsibilities managers have as well.  For example, say a new document gets dropped into a deal room.  The manager retrieves it, decides that they want someone on the team to review it and see if it has any impact on the current model.  It’s likely easier for that manager to look outside their office, walk over to a cube where an associate sits, and discuss what they are looking for than it is to call the associate who is working from home, put together an email or post on Teams outlining what the objective is.  That remote employee has now missed out on a learning opportunity that could negatively impact their future career growth.

Collaboration tools can play a key role in helping to support the diversity, equity and inclusion needs of the hybrid workforce.

Process

Whether it’s deal origination, evaluation, transaction facilitation or ongoing monitoring there are many processes today that are very manual.  And yes, if you’re using Excel to collect, aggregate and analyze data that’s a manual process.  Imagine getting handed several hundred Excel/CSV files containing transactions for the last 2-3 years for several locations and being asked to figure out the month-by-month net income for each location.  Can you do it in Excel, sure, but that’s a lot of manual work.  There are several tools that can work alongside of or in place of Excel that can automate those processes so that your employees are focused on analysis and not data munging.  Process automation should be a significant focus as it can not only increase efficiency, but also defer the need to hire more resources as you grow.

Technology

One technology that has become quite interesting lately is that of CRM systems.  Relationships are key in a PEVC environment and a given connection often exists with only one individual at the firm.  Circling back to the earlier point of people leaving the industry, this becomes a big problem quickly.  CRM systems can be used to not only record a lot of the information about current clients and potential targets, but also to track the conversations, exchanges and touch points that occur with various individuals in the firm.  CRM solutions can also integrate with many of the other solutions you may be using such as ECM and communication/marketing platforms further streamlining automation across data siloes.

Stay tuned for upcoming posts that drill into more detail around specific actions you can take not only within your firm, but in increasing the enterprise value of your portfolio clients through digital transformation initiatives.

This blog contains general information and does not constitute the rendering of legal, accounting, investment, tax, or other professional services. Consult with your advisors regarding the applicability of this content to your specific circumstances.

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