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Securing Private Equity Investment for Mid-Sized Companies

>> Written by Shane Finlay, Industry Value Engineer Lead, SAP

Do you have a Business Intelligence strategy?  This could be the key to attracting private equity to your mid-sized company. 

As Deloitte has pointed out, growth prospects, operational improvement and hitting targets are among the top attributes when a Private Equity firm is considering an investment.  All of these can be addressed with a robust BI strategy. Let’s unpack each of these aspects: 

Growth Prospects:

Techrepublic shares that Business Intelligence is an ideal way to establish a corporate growth plan: BI will generate the proof to support the growth strategy.   What will really “wow” the PE firm is how your analysis uncovers insights no one else has.   But how do you get to these insights?  The good news is that robust insights and analysis are affordable and attainable. 

Gartner research shows there is “an increasing need to focus on analysis to discover new insights”.   More than ever before in history, companies have faster access to information to showcase company performance.  The bar is set higher now for transparency and PE firms expect to be shown insights and opportunities that the company can leverage for growth. 

Operational Improvements:

“Pump and dump”:  It’s not a pretty phrase, but the street’s direction is clear – reduce costs and increase efficiency so we can raise the valuation to meet investor expectations.  The exciting part is that High tech and top management consulting firms have diligently collected statistics on every company that invested in analytics and have compiled a benchmarking library.  Specifically, BI can be mapped to affect a business process, value drivers and key performance indicators.   For example, reducing the Cost Of Delay by implementing real time tracking will result in a typical improvement range of 10%-25%*. Furthermore, reducing Days Sales Outstanding typically shows an improvement range of 10%-20%*.  These are just two of the many quantifiable areas that a BI strategy has been validated to impact.  PE firms want to know which specific KPIs and value drivers your company can improve on and what they are worth. 

Hitting Targets:

The tenure of a senior manager will be limited if targets are not met.  Having up to date, reliable information on the pipeline is key.  With the ability to see how much of the pipeline is real versus at risk, energy can be put toward the right actions to meet targets.  Moreover, the ability to explore all the operations and sales attributes to ensure everything is on track is a must have for high functioning executives.  Taking it further, companies can now leverage their BI to get predictive about their business. The ability to look at the past, present and future will give you the best shot at hitting targets.  These three views are now requirements from savvy PE firms looking to invest. 

Extensive research has been done on what private equity firms are looking for, and a good BI Strategy will go a long way.  The good news is that you can get your BI Strategy assessed for free at and determine where you are in the maturity curve.  Once you have your position determined you will have a place to start and you will be on your way to attracting new investment in your company.  The how-to part come’s with solutions like SAP’s Business Objects Edge software designed for midsized companies.  With SAP Edge, midsized companies can get large enterprise capability so they can ask deep questions about customers, see heat maps and explore trends.  Today the solutions and capabilities are within reach of midsized companies to outperform their peers and successful attract PE firms.

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