Using data analytics to enhance the bottom line

Using data analytics to enhance the bottom line

Jeremy Smith Blog, Private Equity

The exponential increase in the amount of data available means there are more opportunities than ever for businesses to drive profitable growth and enterprise value. Many companies are already making use of the data available to them and a survey published by Forbes found that 53% of companies have adopted big data practices, up from 17% in 2015.

However, there is a huge disparity in the way businesses leverage these insights. While some simply gather and store information, others are able to break down and analyse data to drive their growth strategy and optimise costs. It is in this space that Private Equity owned organisations uncover opportunities to accelerate value creation.

Collate, analyse and action

Many businesses have access to the data required, however, the first step is pulling it together and inputting it into a usable format. Information is frequently stored across multiple solutions, reports, documents and spreadsheets. The latter require manual work to update and more importantly do not provide a holistic view of the business.

The emergence of ready-made solutions designed to collect and analyse this data, mean collating it is easier than ever before. Once gathered, this mass of data often requires the implementation of Analytics at Scale.

Actionable insights

4C Associates has created a suite of tools able to interpret huge data sets, which would exceed Excel’s one million row limit many times over. These tools are user friendly and tailor made for organisations. They collect, clean and isolate data, enabling businesses to spot and respond to changes and opportunities quickly and effectively.

This implementation allows for continuous improvement – the crucial element of effective data analytics. While there is value in running a number of data audits over a period of time, continuous analysis is the real key to unlocking value and staying ahead of the curve.

The resulting analysis provided by these tools has been used to impact the bottom line in a number of ways. For example, to drastically reduce the time it takes to identify key insights and negotiation levers during discussions with suppliers.

Accessibility and impact

At present, data is being used to drive growth in a number of areas, the most profitable typically include:

  • Data warehouse optimization
  • Accessibility and visualisation
  • Enriching customer and supplier analysis
  • Predictive maintenance

For leading PE firms, data forms a pivotal part of the diagnostic and due diligence stage, whereby disparate finance data is collated and analysed to provide full visibility of indirect spend and overall business performance. This allows businesses to consolidate and leverage spend more effectively and identify opportunities to optimise costs. 4C Associates is currently developing a number of algorithms able to replicate the expertise of senior procurement specialists to further enrich this initial analysis.

Sometimes the value of data becomes apparent when displayed in a pictorial or graphical format. This enables decision makers to quickly grasp complex situations and identify patterns that would not otherwise be apparent.

Working with a leading high street retailer, 4C Associates built a custom dashboard for buyers. The key was to create a single version of the truth and ensure everyone had access to the same information. As a result, buyers were able to rapidly and holistically make decisions as a team, meaning they were no longer on the back foot in their conversations with suppliers.

A universal opportunity

Data is a huge opportunity, but also a challenge for businesses of all sizes. Start-ups live and die based on the analysis of sometimes limited data points, whereas established businesses are at risk of rapidly evolving customer expectations. This new landscape impacts all sectors and activities, from new customer and portfolio acquisition, through to the development of new solutions and assets.

However, it is not enough to simply collect data. It needs to be cleaned, continually updated, analysed and actioned. The development of ready-made, cost-effective, scalable solutions, offers businesses a means to access disparate data and provide swift, visual insights. Combined with informed decision-making and analysis, these can be used to drive rapid and sustainable growth and ultimately impact the bottom line.

4C Associates are a proud sponsor of the Operating Partners Forum Europe 2018 on 8th-9th May at The Waldorf Hilton in London.

The Operating Partners Forum Europe 2018 is the only event bringing together European private professionals focused on value creation to meet with their peers, exchange ideas and keep up to date with the latest developments in the market.

As the only event for operating partners in the industry, this is the meeting place to discuss best practices, examine new models and explore the many challenges you face in today’s competitive market. The Forum provides a unique opportunity to hear from experienced operating partners and C-level executives on how they deliver value creation strategies, create top-line growth and drive EBITDA improvement in their portfolio.

To see the full agenda and book your ticket please visit the event website.