BluWave welcomed a group of accomplished thought leaders June 22 for its latest VP forum.
The panel, comprised of Lauren D’Amore of Prelude Growth Partners, Mackenzie Laudel of Shamrock Capital Advisors and Yan Levinski of Trivest Partners was moderated by BluWave founder & CEO, Sean Mooney.
The experts delved into three critical aspects of the investment landscape: effective sector ideation strategy, bridging the buyer-seller valuation gaps and leveraging AI in the investment process.
Investment firms increasingly employ long-term thematic exploration for ideation, aiding their decision-making process and enabling differentiation.
The dynamic market environment necessitates innovative approaches like earn-outs to bridge buyer-seller valuation disparities.
AI is still nascent in the investment arena, with its integration and application varying greatly across firms based on their unique sectoral needs and strategic requirements.
The panelists stressed the importance of leveraging industry, consumer and market trends to formulate effective investment strategies. To this end, firms are differentiating themselves by immersing in a particular theme or sector over multiple years. This not only lends a unique perspective to every investment opportunity but also leads to more informed and strategic decision-making.
The panel also touched upon the importance of a focused investment universe. Some firms are moving away from a broad-spectrum approach to concentrate on mid-market, founder or family-owned businesses. This narrower focus facilitates a deep understanding of potential investments and leads to higher quality deal flow.
As the market continues to fluctuate, there’s been a shift in deal flow, with some firms noticing a lean toward growth equity deals. These deals offer more structural levers to pull during negotiations, proving to be advantageous in the current economic climate.
In response to sellers’ high expectations, firms have had to adapt and innovate their negotiation strategies. Earn-outs, previously less favored due to their potential complexity, are now being used more frequently to bridge valuation gaps. Firms are also exploring other attractive deal structures, such as rollovers and seeking to simplify negotiations by taking representations and warranties off the table.
Embracing AI in the Investment Process
The conversation on AI’s role in the investment process revealed a mix of approaches. Some firms have proactively set up AI task forces to explore how the technology can impact their portfolio companies and be integrated into daily workstreams.
But as mentioned above, the adoption of AI varies across firms. Some admitted to falling behind, expressing a need to engage AI consultants to bridge the knowledge gap. Conversely, others haven’t yet prioritized AI due to their investment in sectors where it has less relevance.
Whether you’re navigating investment strategies, bridging valuation gaps or exploring the potential of AI, the landscape of investing is continually evolving.
As these conversations unfold, BluWave remains committed to connecting you with the exact-fit resources and insights to navigate this ever-changing environment. To learn more, or to start your project, set up a scoping call with our research and operations team.
Service Provider Type: Specialized Interim Executives
Industry: Industrial Distribution and Services
The Need
Interim CFO, COO Team for Turnaround
A multi-generation family-owned business faced significant challenges due to declining financial performance and market dynamics. The company also suffered a cyberattack that exposed weaknesses in its IT infrastructure. Recognizing the need for help, ownership sought external expertise to guide them through a comprehensive turnaround.
The Challenge
Revitalizing Profitability, Building Value Creation Foundation
The business grappled with challenges related to its profitability and internal capacity. The cyberattack highlighted the urgency of implementing an effective IT infrastructure and strengthening the leadership team. An outside advisory board, hired by the family, immediately recommended that a multifunctional team with interim CFO and COO turnaround skills was crucial. The objective was to streamline operations, reduce costs and create a sustainable foundation for renewed growth in order to rebuild value for the family and company stakeholders. Trusted advisors introduced the family to BluWave.
How BluWave Helped
Proven Executive Duo a Perfect Match
BluWave sprung into action, first taking time to understand the unique situation and the factors needed for success. BluWave then swiftly matched the family business with a highly experienced interim CFO and COO duo from the BluWave Network who understood the complexities of the company’s industrial markets and possessed a background in turnaround and operational performance improvement. Because of the ready-to-go nature of the PE-grade, pre-vetted Business Builders’ Network, BluWave was able to introduce the perfect fit executives to the company’s family ownership within a single business day.
The Result
Accelerated Profitability, High-Valuation Sale
The transformative efforts led by the interim CFO and COO turnaround team resulted in significant improvements in profitability and operational efficiency. The company quickly took action to stabilize and reinvigorate revenue and optimize human capital, which increased EBITDA from approximately breakeven to more than $10 million in less than 18 months. The cultural shift toward performance and accountability empowered the employee base, enabling them to rise to the challenge and drive positive change throughout the organization. The family was then sold the business to a top private equity firm at a nine-figure valuation.
The collaborative partnership between the family, the interim CFO and COO combo and BluWave facilitated a comprehensive turnaround, leading to increased profitability, operational efficiency and a transformed organizational culture. The company continues to thrive under new leadership, supported by the foundation laid during the turnaround engagement. In fact, the current full-time CFO and the former turnaround interim CFO connected by BluWave keep in touch to this day.
There had to be a tremendous amount of change within the leadership team because we were driving a culture of change toward performance and profitability. They were invigorated by the accountability they saw and the opportunity, and they rose to that challenge.
How are private equity firms and their portfolio companies leveraging data and analytics to transform their business landscape? What are the emerging trends in AI and machine learning? These were the central themes June 13 in the latest BluWave-hosted PE Operating Partners’ Forum.
Our esteemed panelists, Tye Howell of Blue Point Capital Partners, Gregory Kegeles of Newlight Partners and Mark Steenhoek of The Stephens Group, LLC. teamed up for this insightful event.
Here’s are some of the key takeaways.
Summary Takeaways
View data as the new oil, demanding the investment of money, skills and experience to extract value
Foster a culture of data usage and analytical rigor in portfolio companies
Invest in data and analytics both internally and at portfolio companies
Be a catalyst for change and push companies toward a more data-driven approach
Identify and leverage the right people to lead the data and analytics transformation journey
Understand and stay ahead of emerging trends in AI and machine learning, such as generative AI and conversational analytics
The panelists shared insights on how data and analytics are transforming the private equity landscape. They emphasized the importance of evolving toward a data-driven culture to drive tangible results. They said it’s essential to be rigorous and proactive about this during both due diligence and value creation phases.
Fostering a culture of data usage in portfolio companies was also underscored, with a focus on the push-and-pull dynamics of growth equity. Firms are often seen as catalysts for change, nudging portfolio companies toward sophisticated reporting and analytics.
The Impact of People and Learning Curve
People are critical to this transformation journey, according to the panelists, particularly in managing the pace of technological advancements. Developing an effective learning curve, choosing the right leaders and even outsourcing certain operations are critical factors in successful data and analytics implementation.
Emerging Trends in AI and Machine Learning
The discussion later veered toward the exciting prospects of AI and machine learning in the private equity space. Generative AI, with its potential applications in quality assurance, marketing and customer support, was discussed. The panelists also expressed interest in the advancements in conversational analytics and low-code, generative support technologies.
When you’re ready to harness the power of data and analytics like the top PE firms, contact BluWave to set up a scoping call with our research and operations team. Whether navigating the complex landscape of data and analytics, managing your workforce or any other business building services, we have an exact-fit solution for you on standby.
In today’s interconnected business landscape, a company’s value and performance are largely influenced by its technological prowess.
That’s why IT due diligence is an essential component of any business transaction. IT due diligence is a key aspect of mergers and acquisitions, focusing on a comprehensive review of a company’s IT infrastructure, software, data management and cybersecurity measures.
This assessment identifies potential risks and opportunities, offering vital insights into compatibility and potential integration issues that may arise during an M&A transaction.
The Role of AI and Data Analytics in IT Due Diligence
The emergence of Artificial Intelligence (AI) and data analytics has ushered in a new era of possibilities for IT due diligence. The capability to process large volumes of data, identify patterns, and make accurate predictions has revolutionized the traditional due diligence process, providing a more robust view of the target company’s IT landscape. These advanced technologies can illuminate potential IT risks, uncover hidden synergies and even predict the future performance and needs of the IT landscape.
The Value Proposition of AI and Data Analytics in IT Due Diligence
Incorporating AI and data analytics into the IT due diligence process offers a multitude of benefits:
Efficiency: AI’s capacity for rapidly processing and analyzing large data sets drastically reduces the duration of the due diligence process.
Accuracy: AI algorithms minimize the risk of human error, thus ensuring a more accurate analysis.
Predictive Power: AI’s ability to identify trends and predict future performance offers valuable foresight.
Cost-Effectiveness: By automating routine tasks, AI can result in significant time and cost savings.
Implementation of AI and Data Analytics in IT Due Diligence
The application of AI and data analytics in IT due diligence involves a step-by-step process:
Data Collection and Preparation: Comprehensive data on the target company’s IT assets and operations are gathered and meticulously cleaned and prepared.
Selection of AI and Data Analytical Tools: Appropriate AI and data analytics tools are chosen based on the unique needs of the due diligence process.
Analysis and Insight Extraction: This stage focuses on deriving meaningful insights that can guide the M&A decision-making process.
Reporting and Decision Making: The final stage involves presenting the findings in a comprehensible format, which can inform strategic decisions about the transaction.
Challenges and Risks in AI and Data Analytics for IT Due Diligence
While AI and data analytics offer significant benefits, their implementation isn’t without challenges:
Algorithm Bias: Algorithms can inadvertently perpetuate existing biases. Therefore, transparency and fairness in AI application must be ensured to avoid skewed analysis results.
Data Quality and Completeness: The quality and completeness of the data can significantly impact the success of AI and data analytics in IT due diligence. Poorly maintained or incomplete data can lead to misleading insights and flawed decision.
The Future of AI and Data Analytics in IT Due Diligence
Looking ahead, the role of AI and data analytics in IT due diligence is set to grow:
Continuous Improvement in AI Technology: As AI technology evolves, we can anticipate more sophisticated tools offering deeper insights and greater accuracy, revolutionizing the M&A landscape.
Increasing Importance of Cybersecurity Assessment: As cyber threats proliferate, assessing a company’s cybersecurity practices is becoming increasingly crucial. AI can facilitate thorough cybersecurity risk assessment, adding an additional layer of protection during M&A transactions.
Real-Time Analysis and Predictive Modeling: AI advances could enable real-time analysis during IT due diligence, offering immediate insights. Improved predictive modeling capabilities could also facilitate forecasting of future IT needs, contributing to a comprehensive understanding of the target company’s potential.
To optimize the benefits of AI and data analytics in IT due diligence, organizations should consider developing internal capabilities or collaborating with external experts. With its expertise in connecting organizations with the right service providers, BluWave can be an invaluable partner in this journey. Whether you need assistance in selecting appropriate AI models, interpreting complex results, or mitigating potential risks, BluWave can guide you through the due diligence process, helping ensure successful M&A transactions.
Ready to enhance your IT due diligence process with AI and data analytics? Contact BluWave’s team today, and let us connect you to the perfect resource for your needs.
A portfolio company in the food and ingredients industry needed help assessing the viability of integrating three distinct supply chains. They were looking for a supply chain diligence provider with industry expertise.
The Challenge
Consolidating Supply Chains
The client had two food platforms and was in the early stages of putting them together. They also had a third business they were considering integrating for human capital synergies. They had three distinct supply chains for various ingredients, all of which were outsourced. They needed to assess the viability of integrating them to identify potential opportunities for cost savings, operational efficiencies and a competitive advantage.
How BluWave Helped
Synergies Found in Supply Chain
BluWave presented the client with multiple industry-specific resources in less than a business day, including operations consulting firms with expertise in the food/snacking/ingredients space. The client engaged one of the recommended service providers, who conducted a thorough supply chain diligence assessment.
The service provider assessed the sustainability and scalability of the client’s three distinct supply chains, which included co-manufacturers in the US, Mexico, and Canada. They evaluated the potential synergies and opportunities for integration and identified areas of potential cost savings and operational efficiencies.
The Result
Expectations Exceeded
The supply chain diligence assessment provided the client with a clear understanding of how they could integrate their three distinct supply chains. The service provider’s deliverables and reports were high-quality and exceeded the client’s expectations. They were flexible and responsive to the client’s needs and provided valuable insights into potential opportunities for cost savings and operational efficiencies.
Colocation services provide businesses with the space, power, cooling and security required to host their IT equipment in a data center. Colo security providers offer a wide range of services tailored to the requirements of organizations of all sizes, from small businesses that may need only a few server racks to large enterprises that require entire data halls.
With cybersecurity as important as ever, it pays to work with information technology experts who can help store and manage your data. Specialized third-party service providers know how to do exactly that, no matter your company’s size or industry.
Let’s talk in more detail about what colocation security is, as well as its benefits.
Improved uptime and reliability: To ensure that your data is always available, colocation data centers have implemented security measures against physical threats, as well as redundant power and cooling systems. This can result in improved uptime for your IT infrastructure.
Reduced costs: Colo services are also a great way to lower costs as it’s much more affordable than building and maintaining your own data center. Colocation providers have economies of scale that you can benefit from.
Improved security: Colocation providers have a strong focus on security, with strict physical and environmental security measures in place, protecting your most sensitive data from unauthorized access, theft or damage.
Enhanced performance: You’ll also tap into high-speed networks and other resources that can improve the performance of your IT systems. This can be important for businesses that need to process large amounts of data or that need to provide high-availability services.
Greater flexibility: Scale your IT infrastructure up or down as needed, so you can easily accommodate changes in your business. Businesses that are growing rapidly or that are facing seasonal fluctuations in demand will find this especially helpful.
Improved compliance: Experienced providers often have experience working with businesses in regulated industries, and they can help you to meet your compliance requirements.
Access to expertise: Each provider’s experts can help you to manage your IT infrastructure. This can free up your internal IT staff to focus on more important projects, such as developing new products or services.
Peace of mind: Knowing that your data is safe and secure in a colocation data center can set your mind at ease. That way, you can focus on running your business without worrying about your IT infrastructure and sensitive data.
By colocating your IT equipment in a colocation facility, you can ensure that your data and applications are always available, even in the event of a disaster. Colocation facilities have redundant power and cooling systems, as well as security measures in place to protect against physical threats. This can help to ensure that your data is always available, even if your primary data center is unavailable.
Compliance
Many industries, such as financial services and healthcare, are subject to strict compliance regulations. By colocating your IT equipment in a colocation facility, you can ensure that your data is being stored and managed in accordance with these regulations.
Colocation providers often have experience working with businesses in regulated industries, and they can help you to meet compliance requirements.
Data Protection
Colocation can help you to protect your data from unauthorized access, theft or damage. Colocation facilities have strict physical and environmental security measures in place, such as 24/7 security guards, video surveillance and fire suppression systems.
Colocation facilities are located all over the world, in major cities and data center hubs. Some of the most popular locations for colocation facilities include:
North America: The United States and Canada are home to some of the largest and most reliable colocation facilities in the world. Major cities in North America with a high concentration of colocation facilities include:
Europe: Europe is another major market for colocation facilities. Major cities in Europe with a high concentration of colocation facilities include:
London
Frankfurt
Paris
Amsterdam
Dublin
Asia: Asia is a rapidly growing market for colocation facilities. Major cities in Asia with a high concentration of colocation facilities include:
Beijing
Shanghai
Hong Kong
Singapore
Tokyo
When choosing a colocation facility, it is important to consider the following factors:
Location: The location of the colocation facility is important for both performance and security. You want to choose a facility that is located in a low-risk area with access to high-speed networks.
Security: The security of the colocation facility is critical. You want to choose a facility that has strong physical and environmental security measures in place.
Uptime: The uptime of the colocation facility is important for your business. You want to choose a facility that has a high uptime guarantee.
Cost: The cost of colocation can vary depending on the size of your equipment, the level of services you need and the location of the facility. You want to choose a facility that fits your budget.
What is the Difference Between Cloud and Colocation?
Cloud computing and colocation are both viable options for hosting your IT infrastructure. Cloud computing can offer scalability, cost-effectiveness, and reliability, while colocation can offer more control, dedicated environments and high availability.
Ownership and Control
With cloud computing, you don’t own the physical hardware or infrastructure that runs your applications. Instead, you rely on the cloud provider to manage and maintain the underlying technology.
With colocation, on the other hand, you own and control the servers and other hardware that run your applications. This can give you more control and flexibility over your IT environment, but also requires more management and maintenance from your team.
Scalability
While both cloud and colocation can be scalable, the process is different. With cloud computing, you can easily add or remove resources as needed by adjusting your subscription or service plan with the provider. With colocation, you need to physically add or remove servers and equipment as needed, which can take more time and resources.
While cloud computing can be more cost-effective than traditional on-premises infrastructure, it’s important to note that costs can vary widely depending on your usage, the services you choose and the provider you use.
With colocation, you pay for the space and power your equipment uses, as well as any additional services like security or maintenance. Over time, the costs of colocation can add up, especially if you need to invest in additional hardware or infrastructure.
Security and Compliance
Both cloud and colocation providers offer high levels of security and compliance, but the responsibility for maintaining that security is different. With cloud computing, the provider is responsible for securing the underlying infrastructure, while you are responsible for securing your applications and data.
With colo security, you are responsible for both the hardware and the applications, which can give you more control, but also requires more resources.
Ultimately, the choice between cloud and colocation will depend on your business’s specific situation. A dedicated third-party resource can be a valuable asset as you consider the pros and cons of each.
This is the most common type of colocation, where a company rents space in a data center to house its own servers and equipment. The organization is responsible for the hardware, software and security of its systems.
Wholesale Colocation
A company leases an entire data center or a portion of a data center. The company is responsible for the hardware, software and security of its systems.
Hybrid Colocation
This is a combination of retail and wholesale colocation. The company leases space in a data center to house its own servers and equipment, but the colocation provider also provides some of the services, such as power, cooling and security.
Managed Colocation
The colocation provider also manages the customer’s servers and equipment. This can be a good option for businesses that do not have the resources or expertise to manage their own IT infrastructure.
Carrier-Neutral Colocation
This type of colocation facility offers connections to multiple telecommunications providers, making it ideal for businesses that require high levels of network connectivity and redundancy.
Edge Colocation
This type brings the data center closer to end-users by placing it in smaller, more distributed locations. This can improve latency and reduce network congestion for applications that require real-time processing.
Containerized Colocation
IT equipment is placed in shipping containers that can be transported easily and deployed quickly in different locations. This can be useful for businesses with dynamic infrastructure requirements, such as those in the events or construction industries.
A colo rack is a specialized cabinet or enclosure designed to house servers and other IT equipment within a colocation facility.
Typically, colo racks are either 42U or 47U in height and come in either an open-frame or enclosed design. While open-frame racks are more affordable, enclosed racks provide a more secure environment for IT equipment.
Colocation racks often come with additional features such as power distribution units (PDUs), cable management systems and security features such as locks and security cameras.
When choosing a colocation facility, it’s essential to select a colo rack that meets your specific situation. Your choice depends on your IT equipment’s size, your budget and your security requirements.
Larger colo racks are more expensive but can provide more space for your equipment. On the other hand, smaller racks may be a better fit for smaller businesses with less equipment or lower budgets. Additionally, you must consider security features to protect your IT equipment from unauthorized access.
Our latest quarterly insights report showed that cybersecurity continues to be a top priority for private equity firms and their portfolio companies. Private and public companies are also investing heavily in this area.
With so much at stake, many companies are turning to expertly matched third-party resources to walk them through colo security services. Our research and operations team works hand-in-hand with the top cybersecurity firms in industries including healthcare, manufacturing, technology and more.
When you’re ready to connect with a niche-specific provider to explore and enhance your colocation security strategy, we’ll be ready to make tailor-made introductions within a single business day.
Are you a business leader looking to take your organization to the next level? Are you struggling to find the right structure to support your growth? If so, you’re not alone.
Many companies struggle with org chart planning, but it’s a critical step in any successful growth strategy.
Let’s explore the benefits of org chart planning and how a senior advisor or consultant can help you create a structure that supports your growth goals.
Org chart planning is the process of designing an organizational structure that aligns with your business goals. This includes determining the roles and responsibilities of each employee, as well as the reporting relationships between them. A well-designed org chart can help you streamline your operations, improve communication, and increase efficiency.
The Benefits of Org Chart Planning
Improved clarity and accountability: By clearly defining roles and responsibilities, a well-designed org chart can improve clarity and accountability. This prevents confusion and overlap, while ensuring that everyone knows their job.
Better communication and collaboration: The right org chart can improve communication and collaboration by breaking down silos and displaying how different teams and departments interact.
Increased efficiency and productivity: Streamlining procedures and processes can increase efficiency and productivity, saving both time and resources while improving work quality.
Greater adaptability to changing business needs: Flexibility is key in today’s rapidly changing business environment. The right structure design can help your company adapt to changing needs.
Increased employee satisfaction: Org chart planning also gives employees a clear understanding of their role and provides them with the necessary resources to succeed. This can cause greater motivation and productivity.
Creating an effective org chart requires experience and expertise in organizational design. This is where a senior advisor or consultant can be invaluable. A senior advisor with COO/management experience can help you:
Improve your current org chart and identify areas for improvement: An experienced consultant can thoroughly analyze your structure, ensure that it is efficient and align it with business goals. They can also detect any overlapping roles or confusion to eliminate redundancy.
Design a new org chart that aligns with your growth goals: A management pro can identify key areas of focus and design a structure that supports them, creating a flexible org chart that accommodates future growth.
Ensure your org chart supports your company culture and values: An expert in organizational design can analyze your current structure and identifying discrepancies with your mission, vision and values. They can then make sure your updated org chart accurately reflects those priorities.
Guide you on implementing the new org chart and managing change: A skilled advisor can help you communicate the new org chart to your employees and manage the transition process, including addressing any concerns or resistance. Strong communication and the ability to address employee questions and concerns is key.
Manage the transition process: An experienced change management professional identify potential challenges and develop a plan to address them. They can also track the progress of the transition and make any necessary adjustments.
Effective org chart planning requires a strategic approach.
Having a clear understanding of your growth goals: Before you begin designing your org chart, you need to have a clear understanding of your growth goals. What do you want to achieve in the next year, three years, five years? Once you know your goals, you can begin to design a structure that will help you achieve them.
Identifying key areas of focus: Once you know your growth goals, you need to identify your business’s key areas of focus. These are the areas where you will need to allocate the most resources in order to achieve your goals. For example, if you are planning to expand into a new market, you will need to allocate resources to marketing and sales.
Allocating resources to support your key areas of focus: Once you have identified your key areas of focus, you need to allocate resources to support them. This means hiring the right people, providing them with the training they need, and giving them the tools and resources they need to be successful.
Creating a Structure for Growth
Your org chart should be designed to support your growth strategy.
Create a scalable structure: Your org chart should be designed in a way that allows you to add new employees and departments as your business grows. This may mean creating a flatter structure with fewer levels of management, or it may mean creating a more decentralized structure with more autonomy for individual teams. There is not, however, a magic bullet for this step.
Build in flexibility: It should also be flexible enough to adapt to changing business needs. This may mean creating cross-functional teams that can work together on projects that cut across traditional departmental boundaries. It may also mean reorganizing to better align with your growth strategy.
Regularly review your org chart: Don’t set it in stone. It is important to regularly review your org chart to make sure that it is still aligned with your top KPIs and while remaining flexible enough to adapt to changing needs.
Org chart planning is a critical step in any successful growth strategy. By creating a structure that aligns with your business goals, you can improve communication, increase efficiency and build a foundation for future growth.
Private equity firms often seek outside help to reorganize their portfolio companies, but private and public organizations can also reap the benefits of a niche-specific senior advisor.
Our research and operations team knows the exact resource you need before you ever contact us, and they’re ready to connect you in less than 24 hours. Reach out now to tap into the invite-only Business Builders’ Network that’s already helped thousands or companies like yours with growth strategy.
Artificial intelligence (AI) has emerged as a powerful tool for data analytics in the business world.
AI-driven analytics is the use of artificial intelligence and machine learning techniques to analyze and interpret data. It involves the application of algorithms that can learn from data, identify patterns and make predictions or recommendations based on that analysis.
It’s also a way for organizations and businesses to unlock insights and make decisions faster and more accurately than traditional methods.
“When people are thinking about AI, they’re thinking about the sentient robots that play Go and talk to you,” says Mike Datus* of AI Business Analytics, one of our trusted Business Intelligence & Analyticsservice providers. “Then there’s this other part of the world which is ‘business’ AI or machine learning, which is really using mathematical models to predict things and find really deep patterns.”
Let’s explore the benefits of AI for business intelligence and analytics, the tools available and the role of AI data analysts in modern organizations.
AI Analytics vs. Traditional Analytics
Traditional analytics methods involve using statistical techniques to analyze historical data and identify trends and patterns. But they also have limitations in processing and analyzing large and complex data sets.
In contrast, AI analytics methods can process massive amounts of data in real-time, identify complex patterns and make accurate predictions.
“I think this is something where when we talk about it, the CEOs’ ears perk up,” says Steve Holms, also of AI Business Analytics. “Either because that’s something they thought about, but they thought it was just out of reach, or they’re just like, ‘Oh, I never thought you could do that.’”
These tools, and many others like them, use machine learning algorithms and statistical models to analyze data and provide insights. They also offer features such as natural language processing, data visualization and predictive modeling. They can help organizations improve their decision-making, streamline processes and gain a competitive advantage.
Some of them are proprietary, and only available when you work with an innovative third party.
Datus recalls a food industry client they worked with that reduced shrinkage by 7.5 percent year-over-year.
“What they were traditionally doing was somebody was doing a spreadsheet calculation and looking at the last month and saying, ‘OK, we’re going to do what we did last month,’” Datus says. “But that doesn’t always make sense, because people like making hotdogs in the summer and not in the winter, right? So with an AI model that predicts how much chicken or some food people will want, you can get those numbers dialed in more tightly in simulation.”
“They make widgets for training doctors and nurses to do hospital procedures,” says Datus. “Because the method before was very traditional, not using advanced mathematics, it could be wildly off, and very often it would get overridden by people’s emotions.”
By giving the AI tools a chance, the medical firm boosted revenue by 5 percent for the year.
Lead scoring is one example of how AI analytics can help businesses prioritize their leads and focus on the most promising ones.“How can we help you stack rank all the leads so you can basically work your most promising leads? How do you be more efficient with your sales team?” Holms says.
AI analytics can predict which leads are more likely to convert and provide personalized recommendations to sales teams.
Churn prediction is another example of how AI analytics can help businesses retain their customers.
“What if we can tell you which one of your customers are likely to unsubscribe in the next three months?” Holms says. “Maybe your customer success team should focus on those right away, right? Because it’s a lot easier to prevent a churn than to, once they churn, try to get them back as a customer.”
Demand forecasting is also an essential area where AI analytics can help businesses. By analyzing historical data and market trends, AI analytics can predict future demand and help businesses optimize their inventory and procurement processes. This can lead to significant cost savings and improve operational efficiency.
Datus recalls a time when a skeptical CEO they worked with gave their AI model an opportunity.
“We deployed the AI model, and it predicted a massive spike in demand in the near future. The CEO said, “You know what, I’ll swallow the inventory cost, but let’s produce up to what this AI model says.’ It turns out that spike that the AI model predicted gave them another 5 percent revenue for that year,” Datus says. So that’s the power of these things. If you give it the right data and you build it the right way, it can be more accurate and less biased than traditional analytics.”
An AI data analyst is a professional who uses AI analytics tools and techniques to extract insights from data. They are responsible for analyzing large and complex data sets, developing predictive models and providing recommendations to decision-makers.
AI data analysts should have a strong understanding of machine learning algorithms, statistical modeling and data visualization. They should also have excellent problem-solving skills and the ability to communicate complex ideas to non-technical stakeholders.
AI Business Analytics is just one of the expertly vetted resources that make up the invite-only Business Builders’ Network.
Our research and operations team is ready to connect your PE firm, portfolio company, or private or public company to a niche-specific third party that can help you get up to speed with a artificial intelligence business analytics.
Whether healthcare, manufacturing, technology, retail or any other data-driven industry we know the resources you need before you even contact us.
*Privacy is important to us. While the source and company name have been changed, these are real quotations from a real service provider in the BluWave Business Builders’ Network.
Every quarter our team analyzes the projects we work on with our 500+ PE firm clients to get a bird’s eye view of the market. We recently compiled our Q1 2023 findings into our BluWave Insights Report. You can request your copy and our client coverage team will be in touch.
Key findings from Q1 ’23 include:
Value creation activity is at an all-time high, matching Q1 2022.
Human capital remains PE’s primary area of focus at 45% of all Q1 activity, also matching an all-time high.
Technology remains a priority at 11% of all Q1 PE activity.
