diamond circle


Intelligent automation and analytics in private equity

Amid COVID-19, CFOs remain committed to digital transformation

COVID-19 has shifted the way private equity investors look at potential portfolio companies, whose ability to adapt to market changes and stay on a path to growth is critical. Discover how private equity analytics and automation technology can help fuel that needed flexibility.

The rise of analytics and automation in private equity

In the wake of global economic shocks from the COVID-19 pandemic, chief financial officers (CFOs) broadly remain committed to finance transformation. In fact, according to Deloitte’s CFO Signals™ report for the second quarter of 2020, finance chiefs expect a major increase in automation by next year. They consider automation to be a key component of a sustainable finance function for the future.

Investment funds—innovators by tradition—are getting a jump on this trend through carefully chosen opportunities for private equity digital transformation, including intelligent automation and analytics. We’ve seen many start their digital journey in the finance department because of the opportunities for cost reduction, improved forecasting and planning, and more timely financial reporting. Intelligent automation and advanced analytics are often the tools of choice to enhance business processes. These technologies can also support broader finance transformation goals, such as greater transparency into financial performance, reduction of error-prone manual processes, and a central data repository providing a single “version of the truth” to drive more effective decision-making.

For private equity investors (PEIs), the appeal of intelligent automation and analytics takes on an added dimension. It can help their performance management teams identify opportunities to boost the value of portfolio companies by streamlining, modernizing, and reducing costs in their finance operations. At the same time, intelligent automation in private equity can lend greater visibility into the transactions taking place at each portfolio company, equipping private equity CFOs and performance management teams with insights that can shape decisions at the fund management level.

Back to top

Seven things PEIs want from their portfolio companies

The COVID-19 crisis has driven home the necessity of operational resilience and cost efficiency in the finance function. In the United States, offices shuttered just as many portfolio companies were closing their books for the prior year, leaving them scrambling to complete the process while working remotely. Now, investors are taking a closer look at how PEIs and their portfolio companies are able to adapt to market changes and stay on a path to growth through efforts that might include:

Any number of digital strategies can help these efforts along. But intelligent private equity analytics are of particular interest because they can support targeted finance transformation initiatives that can produce results within a shorter time frame and lead to a potentially more profitable exit.

Back to top


Deploying analytics across a diverse portfolio
PEIs are often structured in such a way that creates a “built-in” federated model in which governance policies, performance expectations, and efficiencies of scale can be established at the fund level and the portfolio companies can be encouraged to take advantage of them. This can create scaled efficiencies that few individual companies can match.

How automation and analytics can fuel private equity digital transformation

Intelligent automation and analytics in private equity often shine in situations where very tactical applications can drive tangible performance and growth.

This kind of data-wrangling and targeted use of intelligent automation and analytics in private equity isn’t just for individual portfolio companies. It can also give PEIs themselves a consolidated view of portfolio performance. The potential results? Real-time insight into a wide range of financial metrics; faster and more accurate forecasting, budgeting, and variance analysis; and a greater ability to drive value across companies.

What’s more, intelligent automation and analytics aren’t just for the largest PEIs. Midmarket PEIs, growth equity investors, and portfolio companies that want to drive growth without significantly increasing their workforce size and technology investments can benefit, too. In fact, organizations that try to sidestep the opportunities that private equity digital transformation represents may pay what the German philosopher Meister Eckhart called “the price of inaction.”

Develop a standout strategy

In a volatile market, investors are showing greater caution in how they distribute their capital. PEIs can stand out with strategic choices that include using digital technologies to reduce costs and effectively manage their portfolios and individual companies. Finance transformation, especially intelligent automation and analytics in private equity, can help portfolio companies refine their financial processes, improve operational efficiencies, and make them more resilient to external shocks.

Kirti Parakh
Intelligent Automation and Analytics
Audit and Assurance senior manager
Deloitte & Touche LLP
Cameron Andriola
Intelligent Automation and Analytics
Audit and Assurance manager
Deloitte & Touche LLP
Anthony DeAngelis
Consulting principal
Deloitte Consulting LLP
Mojgan Vakili
Advisory partner
Deloitte & Touche LLP

Fullwidth SCC. Do not delete! This box/component contains JavaScript that is needed on this page. This message will not be visible when page is activated.

Did you find this useful?