Not long ago, artificial intelligence (AI) was interesting to people who followed technology, but not really anyone else. For the rest of the population, it was a concept that would, at best, impact their lives decades or more down the road.
Well, AI has “arrived” sooner than expected and is having a game-changing effect on many industries. Increasingly, private equity firms are in that group.
The Pandemic as Rocket Fuel
PE firms were already considering AI’s potential benefits before the COVID-19 pandemic. However, that event and the global lockdowns it triggered were like rocket fuel to the rise of AI.
Unable to use many of the processes they’d previously relied on, firms got serious about figuring out how they could leverage AI. And from data management to outreach efforts, they’re using it effectively in a long (and growing) list of ways today.
It Only Takes One
As with any groundbreaking change in how businesses operate, all it took for firms to “see the light” about this new technology was a few organizations adopting AI successfully. Suddenly, they were head and shoulders above the competition in productivity, accuracy, and other factors.
Firms that had dismissed AI as “science fiction” found themselves scrambling to figure out how and where to use it most effectively. Optimizing workflows and eliminating paper-based processes were some of the first tasks that firms sought to complete using AI, but others were close behind.
3 Ways Firms Are Using AI
Three major areas have emerged as ideal for AI assistance:
- Back-office processes. Firms are ditching manual processes and adopting AI to complete repetitive tasks faster, more accurately, and cost-effectively. And as a result, they’re freeing back-office staff to work on more important projects.
- Portfolio monitoring. Keeping an eye on portfolio companies used to be a labor-intensive activity. However, AI can do in seconds what used to take hours.
- Target identification. While target selection must be performed by humans and their understanding of the nuanced interplay of several factors, firms can leverage AI to quantify and narrow down the field. This saves team members a significant amount of time.
A Holistic Approach Delivers Better Results
The PwC 2022 AI Business Survey produced some interesting insights. One is that companies that focus on using AI to help them achieve three business goals as opposed to just one are much more likely to report high adoption of and substantial value from AI.
This includes creating value through several types of initiatives, the top three being:
- Increase productivity and improve efficiency
- Improve decision-making
- Streamline development of new products and services
Improving the customer and employee experiences follow closely, as do developing new, data-driven business models and increasing agility.
Adopting AI isn’t without its challenges, of course. The top three in the eyes of survey participants are:
- Developing AI datasets and models that are applicable across the organization.
- Training employees about AI and helping them get comfortable working with it.
- Recruiting, hiring, and retaining workers who are already proficient in using AI.
Once the companies have decided to implement AI solutions, they must look for ways to accelerate adoption and improve results. But when they achieve those goals, they’ll be empowered to get more work done with the same number of team members, make their employees happy, and fill talent gaps by hiring data experts who can be taught the other skills they need.
AI and the Altvia Product Suite
Like AI systems, our private equity solutions are built with efficiency and productivity in mind. They were developed—and continue to be enhanced—using our deep industry expertise and understanding of the functionality that firms need to succeed.