With deal flow down and cost management being a huge consideration in the current suppress market, making the right digital moves to drive value has never been more important. AlixPartners Mark Veldon speaks with Paul Kelly and Mike Pitts to discuss the current state of digital activity in the market, the perceived trade-off between value creation and value protection, and the Private Equity priorities for digital transformation.


Key takeaways

  • Private Equity has different levels of appetite for digital transformation
  • The primary focus of value creation activities has shifted to cost control in the last six months due to the change in priorities and tightening budgets
  • Most firms are avoiding large-scale re-platforming or systems implementations
  • With new deals low in number, firms are doubling down on their existing portfolio companies and focusing more on carve-outs to streamline their operations
  • Cybersecurity and remediation of existing platforms remain critical for value protection
  • Digital transformation initiatives can take cost out, deliver better products faster, and hit top and bottom-line benefits, but they can be costly and carry associated risks
  • The balance of value creation versus protection has been a key challenge for a very long time 
  • The most digitally savvy are prioritising key initiatives to beat the trade-off between value creation and value protection
  • Prioritisation and knowing where to invest and in what order remains a subject of real challenge
  • A three-step process is recommended: assess the state of the technology environment, identify the major areas of investigation, and prioritise initiatives based on potential impact and risk