Embedding a data-driven approach that relies on the latest digital technologies, tools and techniques can help to increase the value of portfolio companies and enable them to transform – which can be critical while formulating exit strategies.
Sarah deLiefde, Practice Leader in Gartner's Supply Chain Research Group, held a webinar on how corporate changes will impact the Quality Role by 2020. Specifically, there are 8 trends shaping corporate functions:
This document summarizes a strategy for developing a capabilities-driven IT strategy to help differentiate a company. It discusses a 4-stage roadmap:
1. Identify the 3-6 distinctive capabilities that are most important to the company's strategy and how IT can better support them.
2. Assess and prioritize current IT projects based on their strategic importance and value potential, categorizing them as "invest to grow", "invest to sustain", "invest to refine", or "invest to keep the lights on".
3. Estimate the benefits, costs, and sequencing of investments needed to achieve strategic goals and close capability gaps.
4. Determine the cultural and governance support required to implement the new
MPG Manufacturing Software Market Snapshot - July 2020Madison Park Group
We are pleased to present our inaugural review of the manufacturing software market.
Madison Park Group is a unique investment banking firm that takes a "strategy first" approach to advising software companies. Our partners have developed and advised numerous successful companies as operators, investors and investment bankers.
Ralph Verrilli, Michael Magruder and James Tomasullo spearhead the firm's efforts in the manufacturing software market.
The document discusses the need for technology companies to proactively manage their business portfolios as markets and technologies rapidly evolve. It outlines that effective portfolio management involves regularly analyzing markets, identifying opportunities for organic growth or divestment, and optimizing investments. However, portfolio management is challenging to implement within organizations due to differing internal perspectives and a lack of objective external data. Engaging an independent third party can help companies drive portfolio management decisions objectively.
The document provides an overview of the procurement software market and trends in mergers and acquisitions and venture capital investment activity. Key points include:
- Coupa acquired Llamasoft to advance its vision of comprehensively managing all business spend by combining Llamasoft's supply chain capabilities with Coupa's source-to-pay and treasury capabilities.
- ODP acquired BuyerQuest to bolster its corporate buying and selling services and leverage an integrated eCommerce, procurement-to-pay, and supply chain platform.
- Venture capital investment in procurement software increased significantly in 2021, with notable deals including a $100 million raise for a procurement marketplace and $60 million for a spend management platform.
MPG Member Management Software Market Update - H1 2019Madison Park Group
We are pleased to present our review of the nonprofit & association software market for the first half of 2019.
Madison Park Group is a unique investment banking firm that takes a "strategy first" approach to advising software companies. Our partners have developed and advised numerous successful companies as operators, investors and investment bankers.
Jonathan Adler and Michael Magruder spearhead the firm's efforts in the broader member management software market.
Sarah deLiefde, Practice Leader in Gartner's Supply Chain Research Group, held a webinar on how corporate changes will impact the Quality Role by 2020. Specifically, there are 8 trends shaping corporate functions:
This document summarizes a strategy for developing a capabilities-driven IT strategy to help differentiate a company. It discusses a 4-stage roadmap:
1. Identify the 3-6 distinctive capabilities that are most important to the company's strategy and how IT can better support them.
2. Assess and prioritize current IT projects based on their strategic importance and value potential, categorizing them as "invest to grow", "invest to sustain", "invest to refine", or "invest to keep the lights on".
3. Estimate the benefits, costs, and sequencing of investments needed to achieve strategic goals and close capability gaps.
4. Determine the cultural and governance support required to implement the new
MPG Manufacturing Software Market Snapshot - July 2020Madison Park Group
We are pleased to present our inaugural review of the manufacturing software market.
Madison Park Group is a unique investment banking firm that takes a "strategy first" approach to advising software companies. Our partners have developed and advised numerous successful companies as operators, investors and investment bankers.
Ralph Verrilli, Michael Magruder and James Tomasullo spearhead the firm's efforts in the manufacturing software market.
The document discusses the need for technology companies to proactively manage their business portfolios as markets and technologies rapidly evolve. It outlines that effective portfolio management involves regularly analyzing markets, identifying opportunities for organic growth or divestment, and optimizing investments. However, portfolio management is challenging to implement within organizations due to differing internal perspectives and a lack of objective external data. Engaging an independent third party can help companies drive portfolio management decisions objectively.
The document provides an overview of the procurement software market and trends in mergers and acquisitions and venture capital investment activity. Key points include:
- Coupa acquired Llamasoft to advance its vision of comprehensively managing all business spend by combining Llamasoft's supply chain capabilities with Coupa's source-to-pay and treasury capabilities.
- ODP acquired BuyerQuest to bolster its corporate buying and selling services and leverage an integrated eCommerce, procurement-to-pay, and supply chain platform.
- Venture capital investment in procurement software increased significantly in 2021, with notable deals including a $100 million raise for a procurement marketplace and $60 million for a spend management platform.
MPG Member Management Software Market Update - H1 2019Madison Park Group
We are pleased to present our review of the nonprofit & association software market for the first half of 2019.
Madison Park Group is a unique investment banking firm that takes a "strategy first" approach to advising software companies. Our partners have developed and advised numerous successful companies as operators, investors and investment bankers.
Jonathan Adler and Michael Magruder spearhead the firm's efforts in the broader member management software market.
Peachtree Capital Advisors is an investment bank providing M&A advisory services to software, internet, and IT infrastructure companies. The document discusses M&A trends in the first half of 2012, including competitive pressures driving consolidation, acquisitions of cloud companies with established market share, and a focus on storage companies to address big data needs. Notable deals included Dell's acquisition of Quest Software and Vocus' purchase of iContact.
Madison Park Group Member Management Software Market Update - Nonprofit & Ass...Madison Park Group
We are pleased to present our review of the nonprofit & association software market for the second half of 2018.
Madison Park Group is a unique investment banking firm that takes a "strategy first" approach to advising software companies. Our partners have developed and advised numerous successful companies as operators, investors and investment bankers.
Jonathan Adler and Michael Magruder spearhead the firm's efforts in the broader member management software market.
Madison Park Group Engineering & Design Software Market Update H2 2018Madison Park Group
We are pleased to present our review of the engineering & design software market for the second half of 2018.
Madison Park Group is a unique investment banking firm that takes a "strategy first" approach to advising software companies. Our partners have developed and advised numerous successful companies as operators, investors and investment bankers.
Michael Magruder and Ralph Verrilli spearhead the firm's efforts in the engineering & design software market.
Madison Park Group is a strategic M&A and capital raising advisor to the global software economy. The firm’s engineering software practice focuses on applications catered to product development groups across both discrete and process manufacturing enterprises. The firm’s principals have sat on both sides of the table, advising disruptors, consolidators, and incumbents as they navigate strategic initiatives. Industry leaders trust Madison Park Group’s experience in the marketplace.
Shared Service Centers: Risks & Rewards in the Time of CoronavirusCognizant
Our recent research reveals that organizations are reassessing the pros and cons of captive services. Companies are twice as likely to reduce than increase their use of shared service centers.
IoT: Powering the Future of Business and Improving Everyday LifeCognizant
New survey shows IoT at scale is a critical path, but many companies struggle to realize value. See how 10 companies are overcoming these challenges and succeeding in the new normal.
The document discusses trends in outsourcing for 2019. It notes that companies will need to change their outsourcing strategies to adapt to disruptive technologies. Disruptive outsourcing, cloud computing, and robotic process automation are highlighted as trends that will impact outsourcing. The document also provides methodologies for selecting outsourcing suppliers and evaluating potential outsourcing opportunities. Specific outsourcing areas like network operations and maintenance are examined in terms of functions that may be outsourced.
An overview of the Human Capital Management Market by Solution report. Human Capital Management Market by Solution (Core HR, Workforce Management, Compensation Management, Performance Management, Recruiting, Learning Management, Employee Collaboration and Engagement), by Industry Verticals , & by Region - Global Forecast to 2019
Getting Ahead With AI: How APAC Companies Replicate Success by Remaining FocusedCognizant
Changing market dynamics are propelling Asia-Pacific businesses to take a highly disciplined and focused approach to ensuring that their AI initiatives rapidly scale and quickly generate heightened business impact.
Manufacturers were hard hit by COVID-19, but our research reveals the next best steps to take, based on the investments digital leaders in the industry have made and plan to make.
Close the AI Action Gap in Financial ServicesCognizant
Financial institutions are making progress with AI but have been slow to scale it across their organizations, resulting in an "AI action gap". To close this gap, the article recommends four steps:
1. Identify universal use cases that are well-defined to build AI expertise.
2. Improve data management capabilities, which AI relies on, by developing intelligent data tagging strategies and integrating fragmented systems.
3. Move beyond experimentation to fully implementing more AI initiatives to realize benefits across the enterprise.
4. Mitigate unintended consequences by creating responsible AI applications.
Following these steps can help financial institutions maximize the business value and ROI of AI.
Cracking the Data Conundrum: How Successful Companies Make #BigData OperationalCapgemini
There is little arguing the benefits and disruptive potential of Big Data. However, many organizations have not fully embedded Big Data in their operations. In fact, our research shows that only 13% have achieved full-scale production for their Big Data implementations. The most troubling development is that most organizations are failing to benefit from their investments. Only 27% of respondents described their Big Data initiatives as “successful” and only 8% described them as “very successful”.
So, how can organizations make Big Data operational? There are many factors that go into the making of a successful Big Data implementation. However, the single biggest factor that we observed in our research was that organizations that have a strong operating model stood apart. This operating model has multiple distinct elements, which include, among others, a well-defined organizational structure, systematic implementation plan, and strong leadership support. For instance, success rates for organizations with an analytics business unit are nearly 2.5 times those that have ad-hoc, isolated teams. The report highlights the key factors for successful Big Data implementations.
Embracing a More Connected Future Using IoTCognizant
The document discusses how companies can accelerate their adoption of IoT technologies to gain business benefits. It summarizes the findings of a study that assessed organizations' digital maturity levels and their progress in adopting IoT. The study found that IoT adoption is easier for more digitally mature companies and yields higher returns than other technologies. The document then outlines five vectors for how organizations can implement IoT solutions to improve operations: promoting remote work, automating production processes, improving customer experience, increasing healthcare efficiency, and building smarter infrastructure. Implementing focused IoT projects in these areas can help companies future-proof their operations and adapt to changing business environments.
The document discusses a survey of 13 Chicago area CIOs about what they need and want from IT services providers. The CIOs face pressures to both efficiently operate IT and strategically drive digital transformation and innovation. They are seeking partners that can help optimize technologies like big data, ensure security and disaster recovery, and provide strategic solutions to business problems through technologies. The CIOs value technical skills, industry knowledge, cultural fit, and stability from IT services providers in order to navigate the challenges of balancing operational excellence with strategic priorities.
Human Capital Management Software Market Overview - 2015Jeff Monk
This document provides an overview of the human capital management (HCM) software market. It notes that the market is led by large vendors with core talent management platforms, surrounded by many smaller vendors. It also discusses trends of buyers replacing legacy systems with end-to-end cloud-based suites and looking to small innovative vendors for new tools to add on. The document predicts continued investment and acquisition activity in this space.
The document outlines an initiative to re-invent IT at a company. It discusses reorganizing technology domains, cost optimization strategies like chargeback models and new procurement methods, redesigning core processes and systems using approaches like microservices and containers, establishing an insights-driven culture by hiring data talent and implementing predictive analytics, and ensuring decisions lead to actions. The goal is to transform IT from an overhead division to an enabler of the business through initiatives that fundamentally reshape work and drive growth.
This report provides an analysis of the talent assessment market in 2014/2015. It finds that the market is large and growing as more companies adopt integrated talent management systems. The report classifies talent assessment vendors into four categories based on their product focus and business model. It also identifies opportunities for continued growth, such as through consolidation in the industry and greater integration of assessments into talent management suites. The complex nature of talent assessments means the market remains misunderstood, but their value for improving business performance is becoming increasingly recognized.
strategic changes in infrastructure services Gartner I&OMalik BC
The document summarizes a presentation on strategic changes in outsourced infrastructure services and how to source them effectively. It discusses key trends like price reductions in data center outsourcing and increased focus on digital workplace services. It provides frameworks for analyzing an organization's service portfolio, selecting appropriate sourcing strategies, and improving vendor management to coordinate multiple providers. The presentation aims to help infrastructure leaders develop plans to reduce costs and drive digital productivity through outsourcing.
Big Data Means Big Business
Big data has the potential to disrupt existing businesses and help create new ones by extracting useful information from huge volumes of structured and unstructured data. To realize this promise, organizations need cheap storage, faster processing, smarter software, and access to larger and more diverse data sets. Big data can unlock new business value by enabling better-informed decisions, discovering hidden insights, and automating business processes. While the technology is available, organizations must also invest in skills, cultural change, and using information as a corporate asset to fully leverage big data.
This document discusses why organizations need to become analytics-driven to succeed in today's data economy. It explains that analytics-driven organizations are 20% more profitable and 110% more valuable than their peers. The document outlines a framework for how organizations can master the analytics value chain and become truly analytics-driven with nine key dimensions. It concludes by providing guidance on how organizations can start their analytics journey and assess their current analytics maturity.
The enterprise software industry is being transformed by substantial investor capital, Cloud 2.0, artificial intelligence, data protection, preferred platforms, and a talent shortage, leading stakeholders of all kinds to make big changes, and big choices.
The numbers tell the story: 84% of C-suite executives believe they must leverage artificial intelligence (AI) to achieve their growth objectives, yet 76% report they struggle with how to scale. With the stakes higher than ever, what can we learn from companies that are successfully scaling AI, achieving nearly 3X the return on investments and an average 32% premium on key financial valuation metrics?
To answer that question, Accenture conducted a landmark global study involving 1,500 C-suite executives from organizations across 16 industries. The aim: Help companies progress on their AI journey, from one-off AI experimentation to gaining a robust organization-wide capability that acts as a source of competitive agility and growth.
Read the full report:
http://www.accenture.com/AI-Built-to-Scale-Slideshare
Peachtree Capital Advisors is an investment bank providing M&A advisory services to software, internet, and IT infrastructure companies. The document discusses M&A trends in the first half of 2012, including competitive pressures driving consolidation, acquisitions of cloud companies with established market share, and a focus on storage companies to address big data needs. Notable deals included Dell's acquisition of Quest Software and Vocus' purchase of iContact.
Madison Park Group Member Management Software Market Update - Nonprofit & Ass...Madison Park Group
We are pleased to present our review of the nonprofit & association software market for the second half of 2018.
Madison Park Group is a unique investment banking firm that takes a "strategy first" approach to advising software companies. Our partners have developed and advised numerous successful companies as operators, investors and investment bankers.
Jonathan Adler and Michael Magruder spearhead the firm's efforts in the broader member management software market.
Madison Park Group Engineering & Design Software Market Update H2 2018Madison Park Group
We are pleased to present our review of the engineering & design software market for the second half of 2018.
Madison Park Group is a unique investment banking firm that takes a "strategy first" approach to advising software companies. Our partners have developed and advised numerous successful companies as operators, investors and investment bankers.
Michael Magruder and Ralph Verrilli spearhead the firm's efforts in the engineering & design software market.
Madison Park Group is a strategic M&A and capital raising advisor to the global software economy. The firm’s engineering software practice focuses on applications catered to product development groups across both discrete and process manufacturing enterprises. The firm’s principals have sat on both sides of the table, advising disruptors, consolidators, and incumbents as they navigate strategic initiatives. Industry leaders trust Madison Park Group’s experience in the marketplace.
Shared Service Centers: Risks & Rewards in the Time of CoronavirusCognizant
Our recent research reveals that organizations are reassessing the pros and cons of captive services. Companies are twice as likely to reduce than increase their use of shared service centers.
IoT: Powering the Future of Business and Improving Everyday LifeCognizant
New survey shows IoT at scale is a critical path, but many companies struggle to realize value. See how 10 companies are overcoming these challenges and succeeding in the new normal.
The document discusses trends in outsourcing for 2019. It notes that companies will need to change their outsourcing strategies to adapt to disruptive technologies. Disruptive outsourcing, cloud computing, and robotic process automation are highlighted as trends that will impact outsourcing. The document also provides methodologies for selecting outsourcing suppliers and evaluating potential outsourcing opportunities. Specific outsourcing areas like network operations and maintenance are examined in terms of functions that may be outsourced.
An overview of the Human Capital Management Market by Solution report. Human Capital Management Market by Solution (Core HR, Workforce Management, Compensation Management, Performance Management, Recruiting, Learning Management, Employee Collaboration and Engagement), by Industry Verticals , & by Region - Global Forecast to 2019
Getting Ahead With AI: How APAC Companies Replicate Success by Remaining FocusedCognizant
Changing market dynamics are propelling Asia-Pacific businesses to take a highly disciplined and focused approach to ensuring that their AI initiatives rapidly scale and quickly generate heightened business impact.
Manufacturers were hard hit by COVID-19, but our research reveals the next best steps to take, based on the investments digital leaders in the industry have made and plan to make.
Close the AI Action Gap in Financial ServicesCognizant
Financial institutions are making progress with AI but have been slow to scale it across their organizations, resulting in an "AI action gap". To close this gap, the article recommends four steps:
1. Identify universal use cases that are well-defined to build AI expertise.
2. Improve data management capabilities, which AI relies on, by developing intelligent data tagging strategies and integrating fragmented systems.
3. Move beyond experimentation to fully implementing more AI initiatives to realize benefits across the enterprise.
4. Mitigate unintended consequences by creating responsible AI applications.
Following these steps can help financial institutions maximize the business value and ROI of AI.
Cracking the Data Conundrum: How Successful Companies Make #BigData OperationalCapgemini
There is little arguing the benefits and disruptive potential of Big Data. However, many organizations have not fully embedded Big Data in their operations. In fact, our research shows that only 13% have achieved full-scale production for their Big Data implementations. The most troubling development is that most organizations are failing to benefit from their investments. Only 27% of respondents described their Big Data initiatives as “successful” and only 8% described them as “very successful”.
So, how can organizations make Big Data operational? There are many factors that go into the making of a successful Big Data implementation. However, the single biggest factor that we observed in our research was that organizations that have a strong operating model stood apart. This operating model has multiple distinct elements, which include, among others, a well-defined organizational structure, systematic implementation plan, and strong leadership support. For instance, success rates for organizations with an analytics business unit are nearly 2.5 times those that have ad-hoc, isolated teams. The report highlights the key factors for successful Big Data implementations.
Embracing a More Connected Future Using IoTCognizant
The document discusses how companies can accelerate their adoption of IoT technologies to gain business benefits. It summarizes the findings of a study that assessed organizations' digital maturity levels and their progress in adopting IoT. The study found that IoT adoption is easier for more digitally mature companies and yields higher returns than other technologies. The document then outlines five vectors for how organizations can implement IoT solutions to improve operations: promoting remote work, automating production processes, improving customer experience, increasing healthcare efficiency, and building smarter infrastructure. Implementing focused IoT projects in these areas can help companies future-proof their operations and adapt to changing business environments.
The document discusses a survey of 13 Chicago area CIOs about what they need and want from IT services providers. The CIOs face pressures to both efficiently operate IT and strategically drive digital transformation and innovation. They are seeking partners that can help optimize technologies like big data, ensure security and disaster recovery, and provide strategic solutions to business problems through technologies. The CIOs value technical skills, industry knowledge, cultural fit, and stability from IT services providers in order to navigate the challenges of balancing operational excellence with strategic priorities.
Human Capital Management Software Market Overview - 2015Jeff Monk
This document provides an overview of the human capital management (HCM) software market. It notes that the market is led by large vendors with core talent management platforms, surrounded by many smaller vendors. It also discusses trends of buyers replacing legacy systems with end-to-end cloud-based suites and looking to small innovative vendors for new tools to add on. The document predicts continued investment and acquisition activity in this space.
The document outlines an initiative to re-invent IT at a company. It discusses reorganizing technology domains, cost optimization strategies like chargeback models and new procurement methods, redesigning core processes and systems using approaches like microservices and containers, establishing an insights-driven culture by hiring data talent and implementing predictive analytics, and ensuring decisions lead to actions. The goal is to transform IT from an overhead division to an enabler of the business through initiatives that fundamentally reshape work and drive growth.
This report provides an analysis of the talent assessment market in 2014/2015. It finds that the market is large and growing as more companies adopt integrated talent management systems. The report classifies talent assessment vendors into four categories based on their product focus and business model. It also identifies opportunities for continued growth, such as through consolidation in the industry and greater integration of assessments into talent management suites. The complex nature of talent assessments means the market remains misunderstood, but their value for improving business performance is becoming increasingly recognized.
strategic changes in infrastructure services Gartner I&OMalik BC
The document summarizes a presentation on strategic changes in outsourced infrastructure services and how to source them effectively. It discusses key trends like price reductions in data center outsourcing and increased focus on digital workplace services. It provides frameworks for analyzing an organization's service portfolio, selecting appropriate sourcing strategies, and improving vendor management to coordinate multiple providers. The presentation aims to help infrastructure leaders develop plans to reduce costs and drive digital productivity through outsourcing.
Big Data Means Big Business
Big data has the potential to disrupt existing businesses and help create new ones by extracting useful information from huge volumes of structured and unstructured data. To realize this promise, organizations need cheap storage, faster processing, smarter software, and access to larger and more diverse data sets. Big data can unlock new business value by enabling better-informed decisions, discovering hidden insights, and automating business processes. While the technology is available, organizations must also invest in skills, cultural change, and using information as a corporate asset to fully leverage big data.
This document discusses why organizations need to become analytics-driven to succeed in today's data economy. It explains that analytics-driven organizations are 20% more profitable and 110% more valuable than their peers. The document outlines a framework for how organizations can master the analytics value chain and become truly analytics-driven with nine key dimensions. It concludes by providing guidance on how organizations can start their analytics journey and assess their current analytics maturity.
The enterprise software industry is being transformed by substantial investor capital, Cloud 2.0, artificial intelligence, data protection, preferred platforms, and a talent shortage, leading stakeholders of all kinds to make big changes, and big choices.
The numbers tell the story: 84% of C-suite executives believe they must leverage artificial intelligence (AI) to achieve their growth objectives, yet 76% report they struggle with how to scale. With the stakes higher than ever, what can we learn from companies that are successfully scaling AI, achieving nearly 3X the return on investments and an average 32% premium on key financial valuation metrics?
To answer that question, Accenture conducted a landmark global study involving 1,500 C-suite executives from organizations across 16 industries. The aim: Help companies progress on their AI journey, from one-off AI experimentation to gaining a robust organization-wide capability that acts as a source of competitive agility and growth.
Read the full report:
http://www.accenture.com/AI-Built-to-Scale-Slideshare
This document recommends investing in "new tech" companies focused on security, mobile/social, analytics, and cloud (SMAC) technologies. These areas are seeing high spending priorities and growth. Specifically, it suggests favoring security companies with strong fundamentals in cloud computing and mobile interfaces. Key risks include a sell-off in growth stocks or reduced technology spending from economic concerns.
Big Tech winners in 2015 can be identified as FANG (Facebook/Amazon/Netflix/Google) - The new Morgan Stanley Tech theme for 2016: think SMAC (Security/Mobile/Analytics/Cloud)
Five Ways Media Companies Can Generate Value from AICognizant
With some up-front thinking, tight alignment with business objectives, strong data hygiene and careful project governance, content organizations can move AI from the sideline to the business core and deliver on the lofty expectations set for this still-maturing technology.
The document discusses findings from a global market research project on how IT leaders are responding to the economic crisis. It finds that while many companies are struggling and cutting costs, a new breed of forward-thinking IT leaders understand how to use technology strategically. These IT leaders are reducing infrastructure costs, increasing efficiencies through virtualization and cloud computing, and better positioning their companies to weather the economic downturn. The document provides recommendations for IT leaders on managing through the recession, including modifying business plans, focusing on enabling the business rather than just costs, and exploring outsourcing and infrastructure consolidation.
This document examines how big data will influence the insurance industry. It suggests implementing a four-part strategy: 1) leadership commitment, 2) assembling and integrating data, 3) developing advanced analytic models, and 4) creating intuitive tools. Tactical steps are outlined to accelerate progress, and benefits, risks, and challenges of the recommendations are discussed. Implementing this strategy is expected to speed success by covering all critical elements and bringing results through a proven approach. However, risks include high costs of failure and not fully incorporating big data into operations.
Logic fin - company analisis example -alteryx 2014-11Diego Gutierrez
Company Descriptions
Product Offerings and Area of Focus
Growth Rate and Growth Potential
Funding Status (Seed, Series A, etc.)
Business Model
Customer Base
Big-Data-The-Case-for-Customer-ExperienceAndrew Smith
This document discusses how big data has evolved from data warehousing in the 1990s to today's focus on big data to better understand customers. It argues that many organizations fail to leverage big data to improve customer experience and gain business insights. To succeed with big data, organizations must develop a clear strategy to deliver business value, such as increasing customer retention and growth. The document recommends that organizations focus big data initiatives on improving the customer experience through integrating customer data and feedback and providing frontline employees with easy access to customer information.
Case study 3 piloting procter & gamble from decision cockpits- is & ec - gs...HjZulkiffleeHjSofee
Procter & Gamble implemented several decision-making tools to improve business analytics and decision making. Business Sufficiency provided executives with 6-12 month predictions on key metrics. Business Sphere gave executives a command center to visualize data and answer specific questions in real-time. Decision Cockpits provided all employees with real-time business data dashboards. These tools helped P&G anticipate events, respond faster to changes, and focus on business decisions using accurate and up-to-date data. The tools supported P&G's strategy of pursuing new IT to maintain a competitive advantage through faster and better-informed decision making.
Case study 3 piloting procter & gamble from decision cockpits- is & ec - gs...HjZulkiffleeHjSofee
Procter & Gamble implemented several decision-making tools to improve business analytics and decision making. Business Sufficiency provided executives with 6-12 month predictions on key metrics. Business Sphere allowed executives to visualize and explore data to answer specific questions. Decision Cockpits gave more employees access to real-time data and alerts through customizable dashboards. These systems helped P&G align analytics with its strategy of pursuing new technologies to maintain a competitive advantage through faster, better-informed decisions across 180 countries.
Cloud computing is now a viable option for businesses seeking to outsource part or all of their IT operations. But in this new era — where the power of the Internet is harnessed for IT tasks — outsourcing to the cloud can be a strategic maneuver, not just a cost-cutting measure.
The Digital Transformation of Asset & Wealth ManagementKurt Harrison
The document discusses the challenges facing the asset and wealth management industry, including poor investment performance, investor preference for passive strategies and ETFs, pressure on trading and operations, the rise of robo-advisory, and increased regulatory requirements. It argues that asset managers will need to adapt by embracing quantitative strategies, passive products, digitization, and hiring staff with skills in areas like artificial intelligence, electronic trading, and digital client experiences. Regulations are also driving the need for more technology-oriented compliance officers.
20 Red Hot, Pre-IPO Companies in 2015 B2B TechIDG Connect
This document profiles 20 privately held tech companies that the author believes have good prospects for an initial public offering (IPO) in 2015. It provides a brief overview and analysis of each company, including their market opportunity and competitiveness, funding to date, and interviews with executives. The author notes that not all of the companies will necessarily IPO, as some may be acquired, but they each have a chance to go public if market conditions are right and they can continue executing well. The purpose is to survey interesting pre-IPO companies, not to predict their success or failure on public markets.
Data-Analytics-Resource-updated for analysisBhavinGada5
Data analytics is the analysis of large volumes of data to draw insights. It is important for cost reduction, faster decision making, revenue growth, and risk management. There are four main types: descriptive analyzes what happened, diagnostic analyzes why it happened, predictive analyzes what will happen, and prescriptive recommends actions. Data analytics helps financial reporting and auditing through risk understanding, process improvements, and continuous monitoring. Businesses use analytics for insights to transform models and gain deeper customer insights. While investment in analytics is widespread, cultural challenges of people and processes are a larger barrier than technology.
A report on technology trends in 2017. Overview of activity by the big 5 (Alphabet, Apple, Amazon, Microsoft, Facebook) and the next 20 companies and Chinese challengers.
The document discusses how construction companies can leverage analytics to gain competitive advantage in the growing construction industry. It argues that analytics can help companies optimize their market focus and position, lower costs by analyzing activities in their value chain, and improve speed and delivery. Companies that adopt analytics will be well positioned to capture more profitable market share and revenue as the construction industry expands in value.
Building the Digital Business: The 2016 CIO AgendaTesora
This presentation discusses how organizations can build a digital platform and business. It recommends that organizations think differently by creating a portfolio of algorithms, data, and patents to exploit network effects. It also recommends innovating through a bimodal delivery platform to drive speed and scale, and modernizing the core IT infrastructure with an open platform to capitalize on network effects. Recommended actions include investing in a bimodal delivery platform, connecting across delivery modes, and adding IoT and ecosystems to the core infrastructure platform to architect a digital business.
Similar to Private Equity: Powering Alpha Via AI, Analytics & Automation (20)
Using Adaptive Scrum to Tame Process Reverse Engineering in Data Analytics Pr...Cognizant
Organizations rely on analytics to make intelligent decisions and improve business performance, which sometimes requires reproducing business processes from a legacy application to a digital-native state to reduce the functional, technical and operational debts. Adaptive Scrum can reduce the complexity of the reproduction process iteratively as well as provide transparency in data analytics porojects.
Data Modernization: Breaking the AI Vicious Cycle for Superior Decision-makingCognizant
The document discusses how most companies are not fully leveraging artificial intelligence (AI) and data for decision-making. It finds that only 20% of companies are "leaders" in using AI for decisions, while the remaining 80% are stuck in a "vicious cycle" of not understanding AI's potential, having low trust in AI, and limited adoption. Leaders use more sophisticated verification of AI decisions and a wider range of AI technologies beyond chatbots. The document provides recommendations for breaking the vicious cycle, including appointing AI champions, starting with specific high-impact decisions, and institutionalizing continuous learning about AI advances.
It Takes an Ecosystem: How Technology Companies Deliver Exceptional ExperiencesCognizant
Experience is becoming a key strategy for technology companies as they shift to cloud-based subscription models. This requires building an "experience ecosystem" that breaks down silos and involves partners. Building such an ecosystem involves adopting a cross-functional approach to experience, making experience data-driven to generate insights, and creating platforms to enable connected selling between companies and partners.
Intuition is not a mystery but rather a mechanistic process based on accumulated experience. Leading businesses are engineering intuition into their organizations by harnessing machine learning software, massive cloud processing power, huge amounts of data, and design thinking in experiences. This allows them to anticipate and act with speed and insight, improving decision making through data-driven insights and acting as if on intuition.
The Work Ahead: Transportation and Logistics Delivering on the Digital-Physic...Cognizant
The T&L industry appears poised to accelerate its long-overdue modernization drive, as the pandemic spurs an increased need for agility and resilience, according to our study.
Enhancing Desirability: Five Considerations for Winning Digital InitiativesCognizant
To be a modern digital business in the post-COVID era, organizations must be fanatical about the experiences they deliver to an increasingly savvy and expectant user community. Getting there requires a mastery of human-design thinking, compelling user interface and interaction design, and a focus on functional and nonfunctional capabilities that drive business differentiation and results.
The Work Ahead in Manufacturing: Fulfilling the Agility MandateCognizant
Manufacturers are ahead of other industries in IoT deployments but lag in investments in analytics and AI needed to maximize IoT's benefits. While many have IoT pilots, few have implemented machine learning at scale to analyze sensor data and optimize processes. To fully digitize manufacturing, investments in automation, analytics, and AI must increase from the current 5.5% of revenue to over 11% to integrate IT, OT, and PT across the value chain.
The Work Ahead in Higher Education: Repaving the Road for the Employees of To...Cognizant
Higher-ed institutions expect pandemic-driven disruption to continue, especially as hyperconnectivity, analytics and AI drive personalized education models over the lifetime of the learner, according to our recent research.
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Private Equity: Powering Alpha Via AI, Analytics & Automation
1. Digital Business
Private Equity: Powering Alpha Via
AI, Analytics & Automation
Embedding a data-driven approach that relies on the latest digital technologies,
tools and techniques can help to increase the value of portfolio companies and
enable them to transform – which can be critical while formulating exit strategies.
Executive Summary
The private equity (PE) industry has had a great run in
the last decade and seen rapid growth in assets, with
net asset value increasing seven times since 2002.1
Moreover, fundraising has hit record highs globally
as private market capital growth has outpaced public
market capitalization over the previous two decades.
Limited partners (LPs) have poured money into this asset
class, not only for diversification but also to tap growth
pockets across the globe.
However, the private markets industry’s success is creating
challenges as funds pour in in unprecedented amounts.
Industry dry powder is at record highs ($2 trillion).2
Company valuations have moved up as PE firms look to
invest in attractive, well-run companies. Valuations are
rising with deal multiples recording an average of 11.1x,
in 2018 from 9.6x in 2015 (see Figure 2, page 4). This is
posing a new set of challenges for PE firms. Combine
these industry-specific challenges with the larger
disruption in business models and business change across
industries and the challenge becomes even greater.
Cognizant 20-20 Insights
January 2020
2. PEfirmsneedtodeployunprecedentedsumsof
money,acquirestakesatrelativelyhighervaluations
andgenerateprofitableexits,whilehelpingportfolio
companiesnavigateindustrymakeovers.Clearly,
sustainingthesuccessofrecentyearswillbedifficult--
PEfirmswillneedtoworkmuchharderandgenerate
Alpha3
acrosstheportfolio–withoutbettingsolelyon
linearrevenuegrowthtosupporttheirexitstrategies.
One area that PE firms significantly underleverage
is automation, analytics and artificial intelligence
(AI), or the 3As. This is surprising, since the 3As
are becoming a mainstream phenomenon across
industries and geographies, enabling early
adopters to propel growth, reduce costs and
enhance operational efficiencies. (For more on the
mainstreaming of AI, read our white paper “Making
AI Responsible – and Effective.”)
A larger focus on digital technologies, including
the shift to cloud and automated processes, is
likely to be one of the key game changers for the
PE industry going forward. By focusing on the 3As,
the PE industry can create an exciting new avenue
for Alpha generation, one that holds significant
promise for them as well as their portfolio
companies. PE firms that learn from the industry
leaders, identify use cases and create a platform for
data-driven decision-making, and move decisively
in this direction, will stand to outperform their
rivals. Companies that do not take a data-driven
approach, and by extension a digital transformation,
will be left behind.
Interestingly, the value of the 3As will not be
restricted to Alpha generation for the portfolio
alone. It can be a critical differentiator in the
lifecycle of a PE’s investment process too, including
deal qualification, bid pricing, due diligence
processes and executing exit strategies.
To succeed, PE firms will need to set up a digital
transformation office to help portfolio companies
and themselves achieve promised outcomes. This
paper addresses the need, importance and impact
of the 3As for the PE business.
Cognizant 20-20 Insights
2 / Private Equity: Powering Alpha Via AI, Analytics & Automation
3. Cognizant 20-20 Insights
3 / Private Equity: Powering Alpha Via AI, Analytics & Automation
An industry in flux
When it comes to fundraising, private markets have
never had it better. Assets under management
(AUM) are at all-time highs at $5.8 trillion, and
money is coming in from a wide range of limited
partners, especially into private equity.
While this is a resounding vote of confidence for
private capital (and private equity) as an asset
class, this has also resulted in excess liquidity in the
ecosystem, with industry dry powder now at record
highs too, as Figure 1 reveals.4
Global private capital dry powder (in billions) 2006-2018
768
952
1,066 1,055
982 1,002
943
1,226 1,222
1,352
1,563
1,739
2,095
Dec. 06 Dec. 07 Dec. 08 Dec. 09 Dec. 10 Dec. 11 Dec. 12 Dec. 13 Dec. 14 Dec. 15 Dec. 16 Dec. 17 June 18
Figure 1
4. Cognizant 20-20 Insights
4 / Private Equity: Powering Alpha Via AI, Analytics & Automation
Originating deals that provide a profitable exit after
five years will be increasingly difficult as entry-
level valuations are already high and it is unclear
if these high valuations can be sustained over the
next decade. Betting on sustained, linear growth
in revenues is also likely to be simplistic and almost
naïve in an era with ongoing business model
changes, the entry of new players across industries
(aided by technology), and the massive digital
overhauls by incumbents -- as well as aggressive
plans by well-funded digitally native startups.
Therefore, PE plays are increasingly focused on
ensuring that portfolio companies continue to
maintain and accelerate profitable growth, optimize
processes and expand their business footprint. This
is where sharpening Alpha generation strategies
becomes so critical.
To do this, portfolio companies must apply digital
technologies such as cloud, automation, machine
learning (ML) and AI to deliver the highest Alpha in
their investment portfolios.
Private equity deal multiples continue to rise
Global median private equity multiples, 2007-18
Deal valuations have soared as too much money chases relatively few quality assets (see Figure 2).5
Data source: PitchBook
11.3
12x
10x
5x
0
8.9
6.4
7.8
9.1
8.6
9.0
10.0 9.6 9.8
10.4
11.1
4.7
4.1
3.2
3.5
4.4
4.3 3.8
4.3
4.5 4.8 5.0
5.5
6.6
4.7
3.2
4.3 4.6 4.3 5.2 5.6 5.1 5.0 5.4
5.5
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Debt/EBITDA
Equity/EBITDA
Valuation/EBITDA
Figure 2
5. Cognizant 20-20 Insights
5 / Private Equity: Powering Alpha Via AI, Analytics & Automation
The age of analytics
Technology acceleration over the last five years has
provided proper impetus for PE firms to consider
applying the 3As to their businesses:
❙❙ Analytics and cloud infrastructures are available
on demand, making it possible to scale up and
down quickly.
❙❙ Costs are variable and payable on usage (or
some other metric) basis.
❙❙ Open-source platforms and libraries are
reducing the cost of technological experiments,
negating the upfront investment required in
expensive licenses.
❙❙ Industrialization in processes, including data
sciences, have reduced the reliance on people
and cut model building time by up to 90%.
❙❙ Mainstream applications of varied types of
analytical techniques on diverse data sets --
structured, unstructured, and the Internet of
Things (IoT) -- are available.
❙❙ The availability of new and alternative data is on
the rise, which adds to the potency of analytics
models.
This has created a perfect storm for 3A adoption.
Over time, we expect 3A interventions to be
mainstream in all top, proactive PE firms. By getting
out ahead, these firms should lead the pack in
portfolio value creation.
Investments in 3A initiatives do not require
high investments upfront, barring some core
investments, and experiments can be set up quickly
by leveraging cloud infrastructures that allow for
quick data uploads, analysis and modeling. (Note:
This paper does not address the “how” part of the
equation – i.e., how PE firms can execute a plan to
leverage data and create insights.)
6. Cognizant 20-20 Insights
6 / Private Equity: Powering Alpha Via AI, Analytics & Automation
There are caveats, however:
❙❙ An important prerequisite for 3A intervention
is the availability, quality and sanctity of
the data available in an organization. This is
typically a challenge in most companies as data
sits in disparate systems, is widely accessed
and distributed across departments, lacks a
governance framework to ensure quality, has
inconsistent definitions, etc. This is a challenge
that cannot be wished away, but firms that
want to compete on data and analytics need
to address this problem head on. Addressing
data quality problems need not always be a
multimillion-dollar project but one that can be
addressed in pockets, on a case by case basis.
Companies must also take this opportunity to
start capturing new data, digitizing existing data
and incorporating alternate data sources (free or
paid) into the ecosystem.
❙❙ Not every cloud, ML, or automation project
will succeed. Success is a function of many
variables including the use case itself. However,
success rates have improved as the industry
has matured, especially in functional areas that
have been tackled many times over, such as
campaigns, risk, fraud, collections, etc. Challenges
often arise in new problems and while working
with new data sets; those need to be carefully
selected to ensure success. In our experiences,
we have found the overall return on investment
(ROI) of 3A investments to be very high.
The monetary value of the 3As
The 3As can add value across the PE investment lifecycle through:
❙❙ Deal identification and conversion.
❙❙ Portfolio value creation.
❙❙ Exit strategies.
7. By instituting a data and insights-driven decision-making culture,
the portfolio company can transform and remain fit for growth
long after the PE firm divests its stake. This legacy, by itself, can be
a compelling pitch for a potential company to be a part of a PE’s
portfolio.
Cognizant 20-20 Insights
7 / Private Equity: Powering Alpha Via AI, Analytics & Automation
Deal identification and conversion
Intelligent process automation (IPA), robotic
process automation (RPA) and analytics can
make the job of sifting through mountains of data
to identify potential targets more time and cost
efficient during deal identification. Evaluating
customer perception of products and services,
market penetration, and growth potential of a
target company is now a lot easier as the web offers
a treasure trove of data to analyze for insights.
The internet provides real customer feedback on
brands, products, services, competitive positioning,
pricing, etc. and can be an invaluable tool as
originating partners make investment decisions.
Besides, firms can also evaluate the digital readiness
of the target company in the pre-investment phase
by studying their digital presence, performance
and effectiveness. If these lag behind competitors
in an industry that is shifting to digital, then these
findings provide a fact-based view into business’s
potential upsides.
On a similar note, the ability to crawl and extract
data from the web and apply natural language
processing (NLP) to a variety of data sources can
automate legal due diligence on promoters and
directors of target companies.
Two Six Capital, a San Francisco-based firm,
has helped PE firms in the U.S. to determine
appropriate and stretch valuations during
investment due diligence.6
In competitive bid
scenarios, analytics and data science can help
estimate the upper limit of the bid value based on
potential revenues that a PE can generate from
existing customers, based on different metrics such
as customer lifetime value (CLTV), average revenue
per user (ARPU), product penetration, etc. This can
provide a distinct information edge to the PE firm,
as it seeks to win deals with a highly competitive bid,
while at the same time not being saddled with the
winner’s curse (i.e., overpaying). Although most PE
firms perform such analysis, a robust data-driven
approach will lend more credibility to the bid.
DealconversionprobabilitycanincreaseifthePEcan
pitchitsabilitytohelpthepromoter/management
transformthecompanyonthebackofthe3As.While
valuation,equitydilution,dealstructure,etc.matter
enormously(andagrowthpartnerisinvaluable),any
companymanagementandboardwillvalueaninvestor
thathelpsitnavigateitsdigitaltransformation.By
institutingadataandinsights-drivendecision-making
culture,theportfoliocompanycantransformand
remainfitforgrowthlongafterthePEfirmdivestsits
stake.Thislegacy,byitself,canbeacompellingpitchfor
apotentialcompanytobeapartofaPE’sportfolio.
8. Cognizant 20-20 Insights
8 / Private Equity: Powering Alpha Via AI, Analytics & Automation
Portfolio value creation
AlmostalllargePEfirmshaveoperatingteams/
valueoptimizationgroupsthatseektoincreasethe
valueofportfoliocompanies.Valuecreationhas
traditionallybeenobtainedviainterventionssuch
asinductingmanagementexpertise,providing
accesstonewmarkets,launchingnewproductlines,
offeringaccesstonewchannels,enablingstrategic
partnerships,fundinggrowth,automationandvendor
consolidation,andmore.WhileleadingPEfirmsare
nowlookingatdigitalasavaluecreator,itisfairtosay
thattheyarestillintheinfancyofthisjourney.Several
largefirmshavesetupexperimentalteamsandare
testingthebusinessimpact.
Thistentativeapproachissurprisinggiventheimpact
thatdigitalishavingacrosstheindustry,butweexpect
PEfirmstowakeuprapidlytothepossibilitiesofthe
3As.Figure3illuminatesthereasonswhy.7
Insight-driven use cases create value by either supporting growth
(topline) or reducing costs (bottom line)
Figure 3
Use cases Use cases
Assortment optimization Predictive maintenance
Cross-and upsell Marketing spend effectiveness
Chum prevention Demand planning
Pricing Fraud prevention
Stock and replenishment optimization Bad debt management
Promotion optimization Workforce planning
Space and shelf optimization Supply chain optimization
Reference impact+
Reference impact+
Sales
impact
Retail
impact
Cost
reduction
Bottom line
2.0%
1.5%
2.0%
2.0%
1.5%
1.5%
20-50%
of call center costs
5-10%
of marketing costs
20-30%
ofwarehousingcosts
1-5%
of fraud loss
10-20%
of bad debt loss
10-20%
of service costs
10-30%
of logistics costs
1.0 ppt
1.0 ppt
0.5 ppt
1.0 ppt
Impact values not additive and only achieved in case of investment and change management
+ Based upon 100+ reference cases; realization over 1-3 years
Source: McKinsey Advanced Analytics
While use cases for the 3As across industries and processes are numerous and diverse, they can
broadly be classified into three domains – revenues, cost and efficiency.
9. Cognizant 20-20 Insights
9 / Private Equity: Powering Alpha Via AI, Analytics & Automation
Revenue generation
SeveralmarketresearcherssuchasGartnerindicate
adistinctshifttodigitalinmarketingspend,where
measurementandattributionofrevenuesisrelatively
better,customerbehavioriscollectedinrealtime,and
organizationsbenefitfrommoregranulardata.8
Allof
theaboverequiresfirmstocapturetheclickstream
data,buildarchitecturestoleveragereal-timeuse
casesandapplyanalyticstosegmentandpersonalize
experiences.
NetflixandAmazonhavefamouslyleveraged
algorithmstorenderpersonalizedcontentto
consumerstoboostsalesandup-andcross-sellmore
productsbyleveragingadjacencies.Asbusiness
shiftsonline,moredataisavailableforanalysisand
itispossible,withtherightintervention,toidentify
consumersegmentsandunderstandtheirbrowsing
andpurchasebehaviors.Digitalhasmadereal-time
targetedmarketingpossible,sincecustomerscanbe
individuallyidentifiedandserved.
3Ainterventionsarepowerfulacrosstheentiresales
andcustomerlifecyclejourney(seeFigure4).
The impact of 3As across the customer journey
Figure 4
There is scope for optimization in each step of this (sample) journey. Analytics can enable
effective segmentation, and help organizations understand promotion effectiveness, consider
optimal product mix, and optimize multichannel marketing budgets to understand the who,
what and why of customers.
ACQUISITION
Customer segmentation
& acquisition analytics
Offer optimization
Activation strategies
Usage campaigns &
spend modeling
Response/risk
models and revenue
optimization
Lifetime value
management
Cross-sell/upsell
analytics
Usage campaigns
Retention analytics
CUSTOMERENGAGEMENT
GROWTH MATURITY SATURATION & DECLINE
10. Cognizant 20-20 Insights
10 / Private Equity: Powering Alpha Via AI, Analytics & Automation
We worked with a North American-based
specialty retailer to enrich customer data, link
taxation data with customer demographics and
improve campaign effectiveness, leading to a 14%
improvement in response rate. We have helped
clients across the spectrum:
❙❙ A leading North American insurer improved
qualified prospect identification by 45%.
❙❙ A financial services company provided
personalized campaigns and targeting to 97% of
known customers.
❙❙ A global automotive manufacturer drove higher
cross-sell and upsell business by analyzing
consumer behavior patterns.
If a PE firm has to start small, then personalization is
the place to start. It provides direct topline impact
and therefore valuation impact for a portfolio
company and PE respectively. PE firms that do not
help their portfolio companies in each of these areas
are leaving a lot of growth, and money, on the table.
Cost & loss reduction
Automationistypicallythebiggestleversincost
reduction,especiallyinprocess-intensiveactivities.
Whileroboticsandautomationhavebeenadoptedby
largemanufacturingfordecades,IPAandRPAhave
gainedsteaminrecentyearsinmostpeople-based
processes.
InastudyonthedeploymentofIPAacrossIndustries,
McKinseyidentifieda20%to25%annualrun-rate
costefficiency,anincreaseinstraightthrough
processingandanROIthat’softenintripledigits.9
IPAhastrulyarrived,especiallywiththeadventof
advancedprogramminglanguages,AI-enabled
naturallanguageprocessing(NLP)andnatural
languagegeneration(NLG).Well-established
companiessuchasAutomationAnywhere,Blue
PrismandUIPath(amongotherstoday)offerrobust
platformsandsolutions.
Takefinanceprocessesasanexample.Several
companieswithwhomweworkhavereapedbenefits
ofautomationintheprocessofhandlinginvoices,
processingthem,markingthemforpayments,making
decisionsonearlypayments(basedonearlybird
discounts,etc.)suchthattheentireprocure-to-pay
processcanbeoptimized.Firmsleverageanalytics
tooptimizespends,identifyinganomaliesandexcess
payments,aswellastoavoidpenalties.
Similarly,processescoveringclientonboarding,
KnowYourCustomer(KYC),reconciliations,claims,
andmorearepeople-intensivewithmultiplemanual
interventions,allofwhichareprimecandidatesfor
automation.Withincreasedsophisticationinoptical
characterrecognition(OCR)technologies,image
recognitionandNLP,combinedwithrule-based
automation,thereissignificantscopeinoptimizing
costsinmanualprocesses.Thebiggestimpact,
though,isinfraudreduction,whetherit’sclaimsfraud
ininsuranceorvariouskindsoffraudperpetratedin
banking.Fraudalgorithmshelppreventhundredsof
millionsofdollarsofpotentialfraudannually.
Wehelpedalargemultinationalmanufacturing
conglomeratethatmanages80,000invoices
annuallytoreduceerrorsinmanualprocessing
andslashhandlingtimeby50%byemploying
anRPAsolution.Wealsoworkedwithadigital
advertisingagencytodesignandimplementan
NLP-basedautomationtooltocreateadextensions,
identifyappropriateadplacementsandimprove
effectiveness.Theclientrecordeda10%improvement
inclick-throughratesand50%productivitygains.
Thesearethetypeof3AinitiativesthatPEfirms
shouldbringtotheirportfoliocompanies.
11. Cognizant 20-20 Insights
11 / Private Equity: Powering Alpha Via AI, Analytics & Automation
Operational efficiency gains
Improvedbusinessefficiencyresultsfromthe
reducedfrictionintheend-to-endlifecycleofvarious
processes.Forexample,PEfirmsneedtoinstillin
portfoliocompaniesthat:
❙❙ Client onboarding should be convenient, easy
and quick without compromising on KYC and
customer validation requirements.
❙❙ Collection processes must increase the
propensity to recover past dues while ensuring
customer care and legal compliance.
❙❙ Call center operations should be customer-
centric and retain high net promoter scores
(NPS) while reducing operating metrics such
as mean time to resolve (MTTR), average hold
times and the number of agents.
❙❙ Supply chain networks should work seamlessly
so that movement of goods are streamlined
without capacity buildups in fleets and people
and without excess inventory or stockouts.
❙❙ Financial services firms must identify and
mitigate multiple dimensions of risk without
compromising customer experience,
convenience and speed.
❙❙ IT teams need to provision an infrastructure
that is scalable, robust, secure, and resilient
with minimal latency, yet be democratic (for
information access), allow self-service, and be
cost-effective.
Automation,analyticsandAIplayalargepartin
addressingtheseseeminglyconflictingobjectives.
OCRandimagerecognitionalgorithmsensurethat
onboardingprocessesarestreamlinedwhileasingle
masterdatamanagement(MDM)platformbrings
togetherallcustomerandproductinformationto
avoidduplication.Financialservicescompanies
tacklefinancialexposure(fundedandnon-funded)
byrunningriskandpurchasepropensityalgorithms
inrealtimeviacloudplatforms,therebyensuring
in-contextoffersforcustomers.Similarly,cloud-based
microservices-basedarchitecturesallowforquick
access,scalabilityandsecuritywhilekeepingcostsin
check.
ArecentMcKinseyreportontheimpactofanalytics
incontactcentersconcludesthatcompaniesthat
leverageadvancedanalytics:10
❙❙ Reduce average handle time by 40%.
❙❙ Increase self-service containment rates by 5%
to 20%.
❙❙ Cut employee costs and boost conversion rate
on service-to-sales calls by nearly 50%.
❙❙ Improve customer satisfaction and employee
engagement.
Weworkedwithalifesciencesfirmtooptimizeits
entireprocure-to-payprocessesandweedout
inefficienciesintheprocessthroughacombination
ofautomation,analyticsandAI.Theclientimproved
invoicestraight-through-processingratesby
68%,optimizedfinanceprocessesandenabled
prioritizationofpaymentstoavailearlypayment
discounts,leadingtoseveralmilliondollarsinsavings.
Asnotedabove,reducingoperatingcoststhrough
the3AsaredisciplinesthatPEfirmscanandshould
bringtotheirportfoliocompanies.
12. Cognizant 20-20 Insights
12 / Private Equity: Powering Alpha Via AI, Analytics & Automation
Exits
Thecumulativeimpactofapplyingthe3Asacross
thesethreethemesistheoverallimprovementin
growthrates,costsandoperationalprocesses.Allof
thesehaveadirectimpactoncompanyvaluation.
Allotherthingsbeingequal,acompanythatdisplays
strongerdigitalmaturity(initsuseofcloud,analytics
andAI)willcommandahighervaluationpremium
comparedtoitscounterparts.Thisisevidentin
themarketvaluationtrends.AJune2019articlein
HarvardBusinessReviewnoted:11
❙❙ A 7% to 21% positive valuation impact for
companies that have implemented digital
initiatives over those that did not.
❙❙ Valuation benefits of going digital improve over
time, rising by 4% to 12% over the two years
following the launch of digital initiatives.
❙❙ An investor can make a 5% risk-adjusted annual
return (or Alpha, in finance speak) on a trading
strategy that considers whether firms report
digital activities.
13. The time is ripe for PE firms to institute an in-house digital
transformation office that will have a mandate to drive digital
change in all portfolio companies.
Cognizant 20-20 Insights
13 / Private Equity: Powering Alpha Via AI, Analytics & Automation
Looking forward: Green shoots in the PE industry
The good news is that some leading PE firms
have begun investing, albeit in a very small way, in
analytics, AI and automation. True North, an India-
based and India-focused PE firm, took the lead in
the first quarter of 2018 when it created Actify Data
Labs, a subsidiary with a $10 million investment
to focus on the 3As exclusively for its portfolio
companies.12
This was possibly the first instance of a
PE firm making a large dedicated investment in this
space in India if not globally.
In our experiences, many large PE firms are at
an experimentation phase and are making small
investments to gauge the impact on portfolio
operations. In November 2018, Temasek Holdings
announced the setting up of experimental pods
to focus on AI and blockchain technologies, which
it sees as long-term trends impacting multiple
industries and geographies.13
Conversations with
PE firms indicate that many have begun creating
small seed teams or are in the process of setting
up such seed teams dedicated to digital initiatives.
We see this as a trend that will gain momentum and
become mainstream over the next 18 to 24 months.
The PE industry needs to find new ways to generate
Alpha and add value to its portfolio companies
beyond the traditional routes that it has taken so
far. The time is ripe for PE firms to institute an in-
house digital transformation office that will have
a mandate to drive digital change in all portfolio
companies. This office will focus on the entire
digital spectrum, from the shift to cloud to process
redesign, while focusing on the 3As as a key lever.
PE firms that are able to reinvent their roles and
relationships with portfolio companies are likely to
achieve a higher degree of success.
14. Cognizant 20-20 Insights
14 / Private Equity: Powering Alpha Via AI, Analytics & Automation
Endnotes
1 Private equity includes buyouts, large PE firms and late-stage VCs. Private markets also includes private debt, real estate
and mezzanine funds, among others.
2 https://www.investopedia.com/terms/d/drypowder.asp.
3 Alpha refers to the excess returns generated by the investment manager, over a reference rate of return/benchmark index.
4 Naomi Feliz, “Alternatives in 2019: Private Capital Dry Powder Reaches $2tn,” Preqin Insights, January 28, 2019, https://
www.preqin.com/insights/blogs/alternatives-in-2019-private-capital-dry-powder-reaches-2tn/25289.
5 “Private markets come of age,” McKinsey Global Private Markets Review 2019.
6 Mary Kathleen Flynn, “Private equity firms embrace big data: Two Six Capital, Oak Hill, Clarion,” Mergers & Acquisitions,
September 20, 2018, https://www.themiddlemarket.com/news/due-diligence-meets-big-data-two-six-capital-oak-hill-
clarion-among-pioneers.
7 “Achieving business impact with data,” Digital/McKinsey, April 2018.
8 The Gartner CMO survey 2018-19 (a survey of 600 marketing leaders) noted that marketing technology (or martech)
now accounts for 29% of all marketing expenses, up from 22% just two years ago. Roughly 14% of all a CMO spend is on
personalization, while 25% of the total budget is on areas such as paid search, organic search, web and mail.
9 “Intelligent process automation: The engine at the core of the next-generation operating model,” McKinsey Global, March
2017.
10 “How advanced analytics can help contact centers put the customer first,” McKinsey& Company, February 2019, https://
www.mckinsey.com/business-functions/operations/our-insights/how-advanced-analytics-can-help-contact-centers-
put-the-customer-first.
11 Suraj Srinivasan and Wilbur Chen, “Research: Investors Reward Companies That Talk Up Their Digital Initiatives, Harvard
Business Review, June 18, 2019, https://hbr.org/2019/06/research-investors-reward-companies-that-talk-up-their-
digital-initiatives.
12 Swaraj Singh Dhanjal, “True North floats subsidiary focused on analytics, AI, commits $10 million investment,” livemint.com,
January 17, 2018, https://www.livemint.com/Companies/qFYBAcYQcqqQsQ7Uzn4q4I/True-North-floats-subsidiary-
focused-on-analytics-AI-commi.html.
13 Joyce Koh, “Temasek Will Explore AI and Blockchain Deals,” Bloomberg.com, November 21, 2018, https://www.bloomberg.
com/news/articles/2018-11-22/temasek-to-explore-ai-blockchain-deals-with-experimental-pods.
References
• “Private markets come of age” McKinsey Global Private Markets Review 2019. Mckinsey & Company, February 2019.
• “Intelligent process automation; The engine at the core of the next- generation operating model,” McKinsey Global, March
2017.
• Cognizant customer intelligence offering overview, https://www.cognizant.com/ai/pdf/customer-intelligence-offering-
overview.pdf.
• “How advanced analytics can help contact centers put the customer first,” McKinsey& Company, February 2019, https://
www.mckinsey.com/business-functions/operations/our-insights/how-advanced-analytics-can-help-contact-centers-
put-the-customer-first.
• “Global Private Equity Report 2019,” Bain & Company, 2019, https://www.bain.com/insights/topics/global-private-equity-
report/.
• “Global Private Equity Report 2018,” Bain & Company, 2018, https://www.bain.com/insights/global-private-equity-
report-2018/.
15. Cognizant 20-20 Insights
15 / Private Equity: Powering Alpha Via AI, Analytics & Automation
About the author
Vasant Rao
Assistant Vice President, AI & Analytics Unit, Cognizant Digital Business
Vasant Rao is an AVP in Cognizant’s AI & Analytics Practice. With 22-plus years of experience in business
and analytics across multiple geographies, he leads the company’s data science technologies sub-practice
globally, and is also responsible for driving advanced AI interventions in business processes for clients. He
has focused on building innovative AI and analytics products and solutions and has spearheaded critical
initiatives on growth and talent engagement at Cognizant. He holds an MSc in Finance from London
Business School, CFA charter from CFA institute and an MBA from Mumbai University. Vasant can be
reached at Vasant.Rao@cognizant.com | https://www.linkedin.com/in/vasant-rao/.