Explore pathways to value
Value preservation and creation require innovative strategies throughout the transaction lifecycle and within the fund. The evolving transaction landscape is reshaping operations, calling on PE firms to be fit for purpose. Unlock opportunities and drive market leadership by creating new pathways to value.
Value creation for fund executives
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Identifying the right investments to optimize productivity, create efficiencies and maximize top line growth is critical to delivering transformative results. A future-forward approach requires deployment of technology at speed, innovation at scale and thoughtful human experiences.
Growth transformation for portfolio executives
The pe-backed company has equipped over 800 agents with GenAI, with over a million summarized responses to date and is improving both agent and customer experiences. This technology has led to faster and more accurate responses cutting live chat handling times by 15%, with expectations for further gains as GenAI expands enterprise-wide. With a leading tech platform and GenAI architecture, the company is poised to rapidly deploy new capabilities across their channels and functions. A continued focus on responsible AI, maintaining human oversight and embedding critical thinking into company culture is a priority as the pe-backed company looks to maximize GenAI’s transformative potential enterprise-wide.
The outcome
The EY Private Equity team collaborated with the company’s data science and operational business leads to substantiate the return on investment and moved forward by integrating GenAI into live chat, streamlining interactions and personalizing customer service. GenAI summarizes chatbot and agent conversations, enabling agents to quickly address customer needs without repetition. Post-call, GenAI captures key details, enhancing consistency and future interactions. The cross-functional team executed the project in 12 weeks using an agile approach with iterative testing, then deploying and rolling out the solution across the business within four weeks. The EY team’s deep understanding of private equity and the insurance company’s business and tech ecosystem enabled a rapid implementation to successfully integrate AI into their customer journeys.
The solution
A private equity-backed insurance business, aiming to be a leading digital insurer, wanted to integrate generative AI (GenAI) to its digital operating model. Building on its three-year digital transformation with an EY team, the focus was to leverage GenAI to improve contact center efficiency and customer service. Scaling these solutions at speed was critical to capturing value and maintaining a market advantage.
The challenge
Ernst & Young LLP, with the help of the offshore delivery center in the EY Bengaluru office, is now aligned to the PE firm’s and portfolio company’s strategic transformational goals, delivering seamless integration, transparency, a flexible operating model, and an integration of culture and investments. The PE-backed company is streamlining its backlogged projects thanks to operational efficiencies. Leveraging the improved and efficient operating model at lower cost is yielding a savings of more than $6 million per year.
The outcome
Working alongside the CTO, EY professionals conducted a six-week assessment to identify different sourcing scenarios covering a range of capabilities and services, aimed at building a leading-class delivery center with a third party. Over the course of the assessment, the portfolio company identified the type of operational model that best suited its needs. Weighing all options, the C-suite chose to move forward with an offshore delivery center as opposed to alternative models, such as managed services or establishing its own offshore legal entity. Following the assessment and a rigorous evaluation, the PE-backed company selected the EY organization as a strategic advisor to support its transformational goals, beginning with the implementation of a new flexible operating model that entwined culture with investment.
The solution
A real estate company backed by private equity (PE) needed to expand IT operating capacity quickly and effectively to achieve growth goals. The chief technology officer (CTO), within her first three months at the firm, identified that the organization’s operating model could be more efficient and sought to understand a sourcing option that could work best for the firm culture and needs. Priorities included a flexible model, skilled talent across a range of functions, scalable operations, establishment of an innovation lab and cost optimization. Sensitivity to a seamless integration of employees and company culture was top of mind for leadership. The firm sought to improve operations while proactively building a model to be the foundation for the future of the company in growth, innovation and scalability opportunities.
The challenge
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Case study: Growth through AI efficiencies
Case study: Operating model transformation through offshoring
Value creation for fund executives
Operating partner expectations are evolving with increased emphasis on their impact to value creation realization and fund-level operations. Firms of all sizes have invested heavily in building capabilities using a wide range of models – everything from in-house generalist advisors, to highly specialized teams of functional experts, to deep benches of external advisors and consultants. In an era of higher financing costs and limited opportunities for multiple expansion, the Operating Partner role has never been more important.
What do we know about the way that PE firms structure and deploy these resources? Reach out for a customized report and personalized conversation on the range of practices across conducting diligence, identifying value creation initiatives and resource deployment and allocation.
QUESTIONS TO CONSIDER
What are the value creation levers that best-in-class PE firms incorporate into diligence to limit exposure and minimize unforeseen risks?
What are the levers that most commonly do not achieve their targeted ROI?
How do Operating Partner archetypes and models impact value creation targets?
Which value creation areas most commonly achieve its targeted ROI? Which ones miss the mark more than 50% of the time?
Research: Value Creation Benchmarks
Video: Creating value amidst uncertainty
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PE companies are creating value using tried and tested levers and newer enablers to achieve continued growth in a more challenged environment.
Growth focus on portfolio executives
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