We all aspire for the best results and in business achieving the highest returns of investments (ROI) is a crucial goal. Technology is an essential and ever-evolving ally in this respect, so what is the smartest way to go about things to secure ideal outcomes?
This is where the importance of establishing differentiating and clear tactics for value creation through technology comes in. Put differently, success comes from not just understanding the latest trends but also executing strategies effectively with the support of a knowledgeable tech partner. That’s what will set you apart in securing investment victory.
And that’s why today we will be looking at the power of technology, with a special focus on Artificial Intelligence (AI), and how when used at its full potential it can significantly impact the valuation of Private Equity investments, particularly within their portfolio companies.
At Making Sense, a leader in digital transformation and technology value creation, we specialize in product modernization and tech enablement services. With unparalleled expertise, we are well-positioned to guide you on this transformative investment journey. Are you ready?
The Digital Paradox
Digital transformations such as Artificial Intelligence (AI), which are currently revolutionizing how things are done, are having a massive impact on companies’ overall activities and processes. Such innovations are what lead to shifts in how firms create, deliver, and capture value.
But, in spite of there being noteworthy investments in diverse digital fields, enterprises often struggle to yield the most out of those advancements. This is what we call a ‘digital paradox’.
How can this be solved? What does this mean for business? The ‘digital paradox’ leads to the conclusion that, for successful digital-driven business model innovation, isolated technology implementation is not enough.
Therefore, a comprehensive strategy and expert guidance is more indispensable than ever before in achieving the true success that companies seek. And that’s precisely why finding the right tech partner is now more vital than ever before.
Navigating the Complexities of Artificial Intelligence: The Crucial Role of Expert Partnerships
As we can observe in the illustrative graph above, innovation is an undeniable source of competitiveness for organizations. It is also clear that innovation and value creation go hand in hand. In this sense, there is no doubt that Artificial Intelligence (AI) is reshaping production processes and the overall ways companies create and capture value.
Now, despite AI being a promising avenue to seize such opportunities, we must keep in mind that during times when companies are going through periods of financial strain, the focus is not only on the ‘what’, but rather on the ‘how’. This means that tech related priorities are now being reevaluated by investors and tactical questions are asked before making final decisions.
Key strategic AI questions
✅What impact will generative AI have on our industry and company both immediately and in the future?
✅How should we structure our organization to integrate generative AI effectively?
✅Do we possess the essential skills and resources to implement generative AI successfully?
Alongside this thought-out planning, enterprises are also doing a lot of practical work to prepare their businesses for AI, such as generating or gathering the kind of data that such effective implementation will require.
Priorities to consider when looking at incorporating AI:
- Use generative AI (GenAI): A responsible use of it can deliver the most value, such as high-quality data plus an innovative culture.
- Fast-track for visible results: Create an AI-based roadmap during due diligence to enhance a portfolio company’s value at exit.
- Get ‘Data-ready’: Implement robust data frameworks and quality management to ensure that data is clean, complete, and reliable for AI applications.
Also to keep in mind, sometimes the speed at which this wave of digital initiatives is carried out does not always include the profound business transformations needed for success in this digital age. Recent stats reveal that a full transition toward AI is not always as easy as it seems.
As a result, many executives express concerns about falling behind in making the accurate choices that lead to verifiable victory. What this complex scenario means is that when it comes to top-of-the-line executive decisions, simply implementing technology adjustments doesn’t automatically guarantee results.
Achieving those milestones depends not only on the technical expertise behind these implementations, but more so on partnering with the right technology experts to execute the transformations effectively!
Driving Value Creation in a Data-Driven Economy: Insights, Challenges, and the Role of Digital Transformation
According to the Digital Economy Report (2021), the United States is focusing like never before on value creation. The US excels in its capacity to engage in and profit from a data-driven digital economy, making it evident that the influence of digital transformations (DT) on the business world is indisputable.
Also, when talking about ‘value’, we mainly refer to the economic and social benefits generated through business activities. Keeping in mind its current centrality in business evolution and progress, let’s take a special look at Artificial Intelligence (AI).
AI generates value for business by:
- Automating processes
- Enhancing decision-making
- Personalizing customer experiences
- Analyzing vast amounts of data
- Providing actionable insights
- Improving efficiency
- Enabling more targeted marketing.
For example, AI-driven recommendation systems make it possible for an increase in sales by suggesting relevant products to customers, while predictive analytics can optimize inventory management, cutting down costs and streamlining services. All in all, AI empowers businesses to operate more effectively, innovate faster, and foment greater value creation.
In the case of a well known online streaming business, by analyzing user data their AI system enhances user experience and retention, guiding content creation plus acquisition. This has resulted in viewer engagement and subscriber growth, and thus the company has potentialized a stronger market position and greater overall value.
Evidently, the end goal of such digital transformations is not merely digitization, but more so capturing growth and increasing value. This is backed by the McKinsey Global Institute, which predicts that advanced digital technology will generate an annual economic value of $1.2 trillion to $3.7 trillion by 2025.
McKinsey’s research, which surveyed over 800 traditional enterprises globally, also shows that while 70% have embarked on digital transformation, 71% of these are still in the experimental phase.
As mentioned, small and medium-sized enterprises (SMEs) often struggle with implementing DTs effectively, such as AI, resulting in limited progress. The challenges faced are diverse and have been studied in terms of talent, technology, and organizational issues.
Once again, having the right tech partner to accompany you throughout the DT process, is key in the journey towards best results and optimal financial gains. Don’t miss out up next key tips we look forward to sharing with you today!
5 Premier Technology Services for Optimal Business Performance
In this regard, we present to you below five of our top-of-the-line tech tactics, all provided by Making Sense, with over 20 years of boutique experience in the field.
We are the undisputable expert in mastering technology and implementing the most efficient, revolutionizing and promising courses of action in gaining differentiating results for your business endeavors.
This is because Making Sense is a leading Technology Value Creator, meaning that we not only succeed but rather excel in bringing products to life and executing unmatchable digital transformation journeys.
5 Leading Tech Strategies for Business Excellence
1️⃣Technology Modernization: Upgrade legacy systems and integrate new technologies to enhance operational capabilities.
2️⃣Process Optimization: Redesign business processes to be more efficient and responsive to changing market conditions.
3️⃣Operational Efficiency: Streamline operations for heightened productivity and resource optimization.
4️⃣Innovation & Growth: Drive revenue by developing and launching innovative products and services.
5️⃣M&A Integration: Seamlessly integrate systems post-merger or acquisition for cohesive operations.
From the early concept stages up to completion, we accomplish together with our partners technology solutions that surprise and delight customers beyond their expectations.
Ultimately, Making Sense will make business goals truly come to fruition, transforming enterprises into future proof organizations, by together unlocking their unforeseen value.
Thus, Making Sense will:
✅Make your company scale
✅Accelerate its growth
✅Surpass its goals
✅And disrupt industries overall!