Key Analytics to assist in managing portfolio companies.
Updated: Nov 30, 2022
Digital innovation is reshaping the way most industries and businesses function today. ML, virtual reality, sensor technology, the internet of things, and other disruptive technologies are transforming every industry.
Data is the new fuel accelerating the adaptation of these technologies in every industry. By 2030, data collection and analysis will become the basis of all future service offerings and business models in every sector.
The investment industry, including Private Equity (PE) and Venture Capital (VC) firms, is no different regarding data. A massive influx of data, including historical, operational, and market data, is now available. With the correct data strategy, this data can be converted into insights to assist both in getting the most ROI from the current portfolio of companies and future acquisitions. To achieve data-driven decision-making capabilities, investment firms should adopt a phased approach in the following key areas.
The due diligence process should incorporate insights derived from consolidated internal and market data for more informed investment decisions.
A repeatable methodology should be deployed to collect data from profile companies to drive insights for operational efficiency.
The performance of portfolio companies should be measured throughout their lifecycle by drawing insights on the consolidated financial and operational data.
To increase the market evolution of the portfolio of companies, processes should be implemented to collect and analyze market segment data.
To maximize the potential of sales, evaluation process data needs to be collected in a way that can drive meaningful insights.
ML/AL models should be built on top of the available data to provide more accurate predictions on areas relevant to the investment firm.
Every investment firm inspired to become a data-driven organization needs to integrate and understand the diverse data generated by its portfolio companies. A data strategy needs to be developed for the collection, consolidation, and analysis of data to enable deep, automated insights into the portfolio of companies to apply the right approach to grow these companies, increase market valuation and operational efficiency, and make more informed investment decisions.
The above-mentioned key elements are meant as information to ease your organizational processes. However, if you would like a more detailed overview, do not hesitate to reach out to me at email@example.com.
I have years of experience building Technology and providing Technology Due Diligence as a CTO, and I am available for fruitful discussions.