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Barbarians (no longer) at the gate

July 15, 2021

How digital transformation initiatives are changing the value-creation playbook in private equity

The Portonaccio Sarcophagus - III: Barbarians by Egisto Sani licensed under Creative Commons 2.0.

By Eric Bragg and Ben Bacon

In the modern era of private equity, the value-creation model that defines profitable investments has turned completely upside down from those of years past.

Value creation in the modern era

Deal structuring once accounted for half of the value in an investment. Long gone are the hostile days of Barbarians at the Gate, however.

What has changed for high-performing firms in the modern era of private equity?

As firms develop and execute their investment strategies, digital transformation for operational improvement has become one of their most influential and repeatable strategies to run.

Digital transformation has become synonymous with consolidation, scaling, and streamlining assets, both as standalone plays and platform plays—tying together both multiple expansion and operational improvement.

Leveraging digital transformation

Most large-cap PE firms have highly-developed, sophisticated digital transformation strategies, designed to optimize IT as a value creator for the company.

Middle-market firms lag their larger peers in their efforts to drive digital transformation initiatives. They often lack the depth of resources to build in-house centers of excellence (COEs) to provide thought leadership and to develop and deploy needle-moving digital initiatives across the portfolio. Thus, they quite commonly turn to trusted technology consultancies and industry partnerships to bring the required horsepower necessary to successfully execute on these digital initiatives.

In this series, the Infor Private Equity team will share best practices from leading subject matter experts, focused on how private equity firms are embracing digital as a core value-creation lever, and how they are realizing investment return benefits.

About the authors

Eric Bragg is a senior managing director with Infor’s Private Equity Practice. Eric’s 30-year career in private equity includes roles as managing director at Deloitte Consulting’s HCM and SAP practices. As alliance director at Kronos, he collaborated with colleagues to establish private equity as a channel.

Ben Bacon is a managing director with Infor’s Private Equity Relations Team. In his 20-year career, Ben has worked alongside hundreds of brands as a member of a variety of advertising agencies, global technology companies, and software leaders. He is in his fourth year with Infor, where he helped establish the analytics practice for private equity.

Filed Under
  • Private equity
Industry
  • Private Equity
Region
  • Worldwide
  • North America
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