Author: Kyle Johnson

Companies often rely on limited, internal data to define their ideal customer profile (ICP) and total addressable market (TAM). This creates an echo chamber in which businesses miss opportunities to target their most valuable clients.

To combat this challenge, revenue operations specialists come alongside these companies. They deploy a meticulous process, which equips sales teams with a clear plan to maximize revenue.

“The point is to make sure that you’re reaching out to the right people with the right message at the right time,” says Max Scayler*, co-founder of MegaGrowth.

MegaGrowth is one of the world-class service providers in the Business Builders’ Network. Let’s look at the six steps they undertake to help companies define their ICP and TAM.

READ MORE: How RevOps Increases Time to Value for Investments

1. Interview Internal Stakeholders

No one knows their existing customers like a company’s sales team. While the ICP + TAM process doesn’t end here, it’s a great place to start.

“The first step is always to talk to the humans. Interview all the stakeholders, have them tell you what they think the ideal customer profile is,” Scayler says.” That’s important. And there’s always knowledge in that, in the tribal knowledge that is valid.”

This sets the stage for business to understand the perceived ideal customer profile versus the reality.

READ MORE: What is the Voice of the Customer Survey?

The interviews are usually conducted with sales, marketing and customer success teams. A revenue operations firm might ask them about their best accounts and personas to gather anecdotal data alongside the internal customer database.

“Have them tell you what they think it is,” Scayler says, “the type of company where they need to be and why.”

Many ICP exercises stop here, severely limiting a company’s opportunity to understand its customers without testing their hypotheses. But MegaGrowth’s process is just getting started at this point.

2. Analyze Historical Data

The process continues with an internal exercise that goes beyond anecdotes: past sales and performance.

“When we look in the historical data, it’s usually previous orders from customers,” says Ryan Murphy*, MegaGrowth’s other co-founder. “You try to follow the journey, so to speak, out of that.”

Specifically, RevOps firms will review past sales orders and customer purchase data to identify patterns and discrepancies in target industries or customer segments.

CASE STUDY: Sales Benchmarking, Growth for Construction Company

“You’re just looking at very early signs of like what type of industries or customers they bought into to help develop a hypothesis,” Murphy adds. “A lot of times these people will have an idea who bought, like nonprofits or construction or manufacturing, or they’ll have their own industry segmentations that don’t necessarily make sense.”

Internal data helps clarify these points, but relying on it too much can be limiting.

“They’ll get the data and then be like, ‘Oh, there’s not enough data here,'” Murphy says.

That takes us to step three in the process.

READ MORE: Importance of RevOps in Due Diligence

3. Analyze External Data

Once internal stakeholders have been interviewed and historical data has been pored over, it’s time to get outside help.

“Let’s make sure we’ve got all the list of accounts of people that have Salesforce out there that we could sell to and we have that data,” Scayler says. “What is the universe of accounts I can buy from ZoomInfo that I haven’t considered?”

CASE STUDY: Enhancing Channel Sales Strategy in SAP Ecosystem for Payroll Solutions

MegaGrowth then looks at marketing data such as intent signals.

At this point, the company will have a much clearer idea of its ideal customer profile and total addressable market. To be as effective as possible, though, it must also prioritize these targets.

4. Determine Account Tiers

One approach to this step is to divide your accounts into tiers from the highest chance of success to the least.

The top tier, or Class A, if you will, could be referred to as BCOS (pronounced like “because”) accounts. That is, “best chance of success” based on the analysis done in steps one through three.

READ MORE: How To Analyze Sales Data

“Class B accounts that are worth going after, but not top priority,” Scayler explains. “Then class C…you don’t hunt down specifically. They might buy from you, but they’re not really the perfect profile. So you send them some marketing emails, but you’re not having people manually call them.”

With a clear priority of which accounts to go after, the company is now ready to get buy-in from leadership.

5. Align Leadership Team

Achieving consensus among leadership is one of the top challenges of this whole process, but also the most important.

“That’s a non-trivial step,” Scayler says. “You do all this stuff, you lay it all out, you still have to go through the change management process of getting them all to agree.”

Scayler says that this can be a lengthy process, depending on the makeup up the leadership team and their existing understanding of an ICP and TAM.

6. Build Sales Territories

The sixth and final step is often the most exciting. It’s when your sales team can take all the synergy created from steps one through five and start to go after clients with fresh clarity and motivation.

“We help them size how to approach and scale these accounts and then create a mechanism for them to move them correctly,” Murphy explains.

READ MORE: What is Product Positioning?

Armed with a clear picture of client tiers, a team structure and sales territories are redefined. This system enables the company to efficiently manage and cycle through accounts.

“If you have 10 reps, some salespeople will say, ‘Well I’m just going to assign those 33,000 accounts to all these sales reps.’ Well, that doesn’t make sense,” Murphy says. “The sales rep doesn’t have focus. So a lot of the times we talk about structure and creating a mechanism where they can maybe work on a hundred or 200 or 300 accounts and then cycle those accounts as they work them correctly.”

MegaGrowth works hard to get their clients – whether independent companies, public companies or PE firms and their portfolio companies – all the way through the six-step process.

“Otherwise you just get a lot of churn and burn and nothing’s created,” Murphy says.

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The culmination of all this work may look similar to more traditional ICP + TAM exercises – a list of accounts and contacts within those accounts – but a skilled revenue operations resource can help your business go much further.

“Sales teams get excited because they know these are the right folks and we’ve got the marketing materials to back it up and we know who we’re going after,” Scayler says. “That’s the ultimate result. … It’s also building the sales territories, getting it loaded into their CRM and they start turning the crank.”

When you’re ready to work with a BluWave-grade third-party service provider, our revenue and operations team can scope your need and provide a short list of options tailored to your situation within a single business day. Set up your scoping call today to get started.

*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.

Selecting and implementing the right Enterprise Resource Planning (ERP) system is a crucial decision for technology software companies. The journey from legacy systems to more dynamic solutions offers a glimpse into the ambition of tech companies to harness technology for operational excellence.

Choosing between Sage and NetSuite, Microsoft Dynamics 365 and Acumatica or Quickbooks and SAP are just a few examples.

But this complex process demands a meticulous approach and seasoned expertise. Working with neutral, third-party service providers can help ensure businesses make the best possible decision.

Here are some of the factors these industry-specific experts consider when assisting private equity firms and their portfolio companies, as well as private and public companies.

The Foundation of a Successful ERP Transition

A successful ERP implementation begins with a deep dive into your current processes, systems and technology stack. For software companies, this might involve moving from basic accounting software to a comprehensive solution that streamlines finance, operations and customer service.

CASE STUDY: Streamlining Patient Engagement with Salesforce in Healthcare

Understanding your specific needs — be they enhancing document management in healthcare or integrating complex billing systems in SaaS — sets the cornerstone for selecting the right ERP system.

Selecting the Ideal Implementation Partner

The expertise of your implementation partner is crucial. Whether transitioning to NetSuite or integrating Epicor’s P21, the importance of partnering with a team that not only understands ERP technology but also the unique challenges of the software industry cannot be overstated.

A third-party resource like BluWave excels in connecting businesses with these specialized experts, ensuring your ERP project is in capable hands.

Navigating Data Conversion and Integration Challenges

Migrating data from various legacy systems into a new ERP platform is a delicate task that requires precision and strategic foresight. The process involves not just technical know-how but also an understanding of how data conversion impacts future operations.

It’s here that the value of a knowledgeable partner becomes evident, offering insights into best practices for data integrity and system functionality.

Custom Solutions for Billing and Subscription Management

For companies with intricate billing models, implementing a new system presents unique challenges. Expert guidance is invaluable in evaluating potential platforms and ensuring the selected system aligns with your business model.

Strategic advice can help navigate the complexities of vendor selection, avoid common pitfalls and manage the implementation process effectively.

ALSO SEE: IT Due Diligence: Technology, Software Industry

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The Business Builders’ Network is full of exact-fit expertise necessary for software companies to achieve their ERP implementation goals, and fast.

Our research and operations team specializes in connecting you with the ideal service provider, turning the daunting task of ERP selection and implementation into a strategic success story.

Partnering with BluWave not only simplifies the process of finding the right ERP solution but also ensures that the journey enhances your competitive edge. Set up your scoping call today, and we’ll provide a short list of situation-specific resources within a single business day.

Revenue operations unify the go-to-market strategies across sales, marketing, customer success and finance, streamlining processes from lead generation to revenue realization.

Whether private equity firms are deploying revenue operations during the due diligence process, or private and public companies want to be more efficient, this process can accelerate the time to value for investments.

“We define RevOps as a holistic approach to all of the go-to-market processes that a company uses to run their sales, marketing, customer success and finance teams all the way from lead to cash,” says Max Scaler*, co-founder of MegaGrowth. “I think it’s important to say it’s not sales ops. A lot of people think RevOps is just another name for sales ops or marketing ops, and that’s not the case.”

Let’s take a deeper look into how revenue operations can bring your business more value on a faster timeline.

RevOps: Greater than the Sum of its Parts

RevOps enhances the efficiency and effectiveness of go-to-market teams by eliminating operational bottlenecks and enabling faster, more informed decision-making.

“It is a force multiplier for your go-to-market teams,” Scaler says, “removing things that slow them down.”

Beyond enhancing efficiency, RevOps fosters a culture of continuous improvement and innovation. By breaking down silos, it encourages cross-functional collaboration, leading to creative solutions that drive growth.

READ MORE: Defining Your ICP, TAM with Revenue Operations

Create Leadership Alignment

Investment in RevOps fosters alignment among leadership teams, ensuring cohesive planning and execution toward revenue goals.

“Investing into our function creates leadership alignment, but it also creates the ability to put into place a plan tracking how they’re driving revenue,” says MegaGrowth’s other co-founder, Ryan Murphy*.

This alignment extends beyond mere agreement on objectives; it cultivates a shared vision for success that permeates every level of the organization, ensuring that every team member is working toward the same goals with a unified strategy.

Track, Drive Revenue Like Never Before

RevOps provides a structured approach to track and drive revenue, supporting strategic decisions on leadership supplementation and operational focus post-investment.

The right strategy not only tracks revenue but also identifies new revenue streams and opportunities for expansion, providing a comprehensive view of financial health and growth potential.

How To Improve Efficiency, Productivity of Sales & Marketing Teams

Implementing RevOps also means embracing agility in sales and marketing strategies, allowing teams to quickly adapt to market changes and customer needs for sustained growth and competitiveness.

“Marketing attribution…lets you reallocate that money to places that are working,” Scaler says.

CASE STUDY: Board Member To Enhance Operations for Orthopedic Practice Growth

RevOps optimizes sales and marketing efficiency by ensuring investments like marketing spend are allocated to the most effective channels, improving overall team productivity.

Here are other ways a solid revenue operations strategy can benefit sales and marketing teams:

• Marketing Attribution: By accurately attributing marketing spend to revenue outcomes, companies can optimize their marketing strategies.
• Lead Scoring and Routing: RevOps enhances the management and prioritization of leads, ensuring high-value prospects are engaged promptly.
• Customer Success: It focuses on maximizing customer lifetime value through streamlined support and engagement processes.
• Quote-To-Cash: RevOps streamlines the quote-to-cash process, reducing friction and accelerating revenue recognition.
• Subscription Management: Effective management of subscription models ensures consistent revenue streams and customer satisfaction.

Benefits of Neutral Third-Party Strategy Consultants

A neutral third-party consultant in RevOps can provide unbiased insights and recommendations, helping to resolve internal disagreements and align strategies with best practices.

“Part of the value any strategy consultant brings is an objective third-party opinion,” Scaler says.

READ MORE: Revenue Operations in Due Diligence: How it Creates More Value

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The RevOps resources in BluWave’s invite-only network of service providers specialize in helping the world’s top business builders on an industry-by-industry basis. They have worked alongside countless companies to operate more efficiently, saving time and money.

Efficient implementation of RevOps can significantly reduce the time to achieve investment goals, acting as a multiplier for returns by streamlining operations and enhancing decision-making processes.

“Time is the biggest issue,” Murphy says. “If you can cover the time perspective of that and reduce it, you get a multiplier in your investment.”

Our research and operations already knows the resources you need before you contact them. They’ll scope your business’s unique situation and provide a short list of tailor-made options within a single business day. Set up a call today to make revenue operations a part of your value creation process.

*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.

Revenue operations is a valuable strategy businesses use to align sales, marketing, customer success and finance operations to drive growth. RevOps is not just a buzzword; it represents a holistic approach to removing silos between departments, ensuring that each function is working toward the same goals.

By integrating processes, people and technology across the organization, RevOps facilitates a seamless customer journey, from initial awareness through to renewal and expansion.

Private equity firms can benefit from implementing a revenue operations strategy as part of their due diligence process. Traditionally focused on financials, competitive analysis, legal compliance and market position, due diligence that includes a company’s revenue operations provides even greater return on investment post-acquisition.

“Historically, nobody thought about rev ops during the diligence process,” says Max Scaler*, co-founder of MegaGrowth, a service provider in the Business Builders’ Network. “There’s a growing awareness that you need to consider it at least early in an investment.”

This early analysis allows investors to devise a roadmap for RevOps, ensuring the acquired company can hit the ground running post-deal.

READ MORE: Equipping Your Sales Team with ICPs, TAMs Using RevOps

RevOps Process in Due Diligence

When MegaGrowth works with PE firms at the diligence stage, they do what Ryan Murphy*, the service provider’s other co-founder, calls a “soup-to-nuts diagnostic analysis.” This exercise leaves the firm and its portco, should they sign off on the deal, with a clear path forward. It also identifies any risks to the business the PE firm should know about.

READ MORE: What is Commercial Due Diligence?

“What should we prioritize? What projects do we do first, second, third, and building a roadmap, usually for six months or a year at least,” he says. “On day one we’re going to have them launch off and start working on this roadmap. And here’s why, and here’s the return we’re gonna get for each stage. And that’s what we would advocate people do.”

Maximizing the Investment Period

“It’s not just about bolting these together,” Scaler says, “it’s thinking of it as one cohesive process.”

The MegaGrowth co-founder says PE firms typically think about RevOps tactics about six months post-acquisition. It then takes another six months to implement them, meaning the business misses out on an entire year of more efficient growth.

Instead, private equity firms should incorporate revenue operations into their due diligence process.

Case Study: Board Member To Enhance Operations for Orthopedic Practice Growth

“Once you’ve got an LOI in place, that’s when it makes a lot of sense to start thinking about this,” Scaler says.

This way, PE firms identify potential efficiencies and growth levers within an investment. Expert third parties who do this on a regular basis can then provide the firm and its portfolio company with a detailed roadmap for post-acquisition value creation.

Budget Planning

Another reason to get a jump on RevOps initiatives is that it makes it much easier to find room in the budget.

“If you did the analysis right after the LOI and you understood what you have, you can earmark or bookmark money for it a lot earlier and then get the investment faster,” Murphy says.

If the company is going to need a new software, it makes more sense to fold that cost into the overall purchase price instead of creating a new line item months into the partnership.

“If the company needs a Salesforce upgrade, if it needs whatever else – a CRM – it’s a lot easier to have that conversation and put it into the company plan when you’re buying it,” Murphy adds. “Once that deal closes and they bought the company it’s very hard to find budget six months afterward once you find these issues and you can’t get it working right.”

READ MORE: How RevOps Accelerates Time to Value for Investments

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When private equity firms invest in revenue operations by partnering with experts like MegaGrowth, they open the door to moving up their value creation timeline while significantly enhancing the return on investment in their hold period.

The RevOps resources in the Business Builders’ Network specialize in helping PE firms on an industry-by-industry basis. They have worked alongside countless companies to operate more efficiently, saving time and money that comes back to them at the end of their hold period.

When you’re ready to connect with one of these service providers, our research and operations team will be here to help. They’ll scope your need and provide a short list of tailor-made options within a single business day. Set up a call today to make revenue operations a part of your due diligence process.

*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.

As part of BluWave’s quarterly Private Equity Insights Report, BluWave CEO Sean Mooney shares predictions on the PE industry and economy at large.

These forecasts are based on BluWave’s proprietary data, publicly available economic data and Mooney’s instincts from nearly 20 years working in private equity.

To hold himself accountable, here’s a look back at past prognostications and how they fared, as well as current predictions.

ALSO SEE: Top Private Equity Innovators Awards

2024 Predictions

Prediction 1

An Economic Rebound Takes Root

The economy is set to enter a new traditional 6-to-8-year market cycle during the second half of 2024, with the Federal Reserve’s monetary policy more closely reflecting past pre-boom cycles as compared to the “all gas, no brakes” approach during the most recent 15-year cycle.

Prediction 2

PE Sponsors Start Selling

The exit logjam will start to break, driven by an increase in sponsor-backed deals. The median age of PE portfolios is at a nine-year high, and distributions as a percentage of NAV are at a 13-year low. Limited partners are pressuring general partners to provide liquidity and persuading GPs to sell assets, even if below full potential. Top-tier companies will continue to sell at premium valuations, but companies viewed as lower quality will adjust toward more traditional pre-2022 peak-cycle valuations. M&A investment bankers will also support this trend as they need to cover overhead and increase their revenues.

Prediction 3

Now is the Time to “Buy the Bottom” and “Hit the Gas”

Private equity deals completed in 2023 and the first half of 2024 will yield the best returns over the next 6-to-8-year deal cycle, capitalizing on the bottom of this most recent economic cycle.

Prediction 4

Dealmakers Realize AI is a Tactic, Not a Strategy

Just like with the internet circa 1995, the AI boom will evolve, with businesses newly understanding and leveraging AI technology as a value-creating tactical tool that can lower costs, increase the speed of processes and improve decision-making, rather than an overarching ill-defined business strategy in itself.

Prediction 5

Follow the Data

Data scientists will be the hottest new hire in PE firms. As modern data sets continue to expand and evolve and competition in PE grows, PE firms will look to more fully make use of the large data sets that are available, use statistics and apply more powerful tools like Python, SQL and ML/AI techniques. Some private equity firms have already established a considerable first-mover advantage in acquiring these skilled professionals, and the rest of the industry will increasingly follow.

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2023 Predictions

Prediction 1

A Recession is Coming

A recession has to be created in some form by the Fed in order to prevent a situation like the 1980s from happening again. Look for a shallow recession in 2023. PE-backed portfolio companies as a whole will outperform their peers due to their access to liquidity and the preparations that they have taken during the past two years.  As such, look for PE portcos to emerge first and the rest of the economy to follow.  Expect to see real bankruptcies for the first time in more than a decade, which will avail opportunities for special situations investing. Add-on acquisition opportunities will likely also be high as baby boomer owners don’t want to wait for the next cycle and wounded companies seek safety in the hands of more stable PE-backed portfolio companies.

Outcome

We were largely on target here. Whether key segments of the economy are growing less than ~1% or declining ~1%, the impact on broader business was largely the same.

Accuracy

3/3

Prediction 2

Bursting of the VC Bubble

FTX is a canary in the coal mine. Close to $1 trillion was invested in VC during 2017-2021, ~1/3 of which occurred in 2021. Many in the current vintage of VC-backed companies were invested in with relatively little due diligence and are burning significant cash at a time when few can afford to. This will likely lead to a large number running out of runway. For PE tech investors, this will provide platform turnaround and product add-on tuck-in acquisition opportunities.

Outcome

The bank failures at SVB, Signature and First Republic ultimately catalyzed the tumult in VC. Many later-round, non-AI VC-backed companies will continue to experience significant pain and failures. Seed-round companies are and will be funded at more reasonable valuations. A gigantic wave of funding is going into AI startups, in many cases based on the reputation of a single person. Look for many losers and a smaller number of winners in this cohort to ultimately change the world.

Accuracy

3/3

Prediction 3

Return of In-Person Work

Productivity rates plunged by the sharpest rate since 1947 in 2022, in large part because of virtual work, which isn’t as efficient as in-person work. As more companies catch on to this correlation, expect to see in-person work continue to make a return. Hybrid working environments will stay around, but fully virtual environments will increasingly come to an end because businesses with those models are quickly losing ground to more agile in-person competitors.

Outcome

Most of the PE firms we support have strongly returned to mostly in-person work. Many of the latest AI startups in Silicon Valley are also reported to be doing the same based upon the inherent competitive advantages and enhancements to agility and collaboration. Individual contributor roles that don’t require collaboration and mentorship may likely continue to be virtual. Those roles that require collaboration, mentorship and developmental management will increasingly return to meaningfully in-person work.

Accuracy

3/3

Prediction 4

Branding in PE Becomes More Important

In 2023, brands will become evermore important in private equity. Capital is no longer a differentiator, so firms must therefore be able to clearly communicate their unique capabilities to businesses and those in search of capital in the form of a brand. Look for more “Chief Marketing Officer” roles being played in the PE firm landscape.

Outcome

We are seeing ever-increasing engagement by PE firms in places like LinkedIn, email marketing and media channels such as our Karma School of Business private equity podcast. We have yet to see a meaningful increase in chief marketing officers at PE firms but believe this trend will ultimately come to fruition over time.

Accuracy

3/3

Prediction 5

The Broad Rise of Analytics and AI

Tools that were previously only accessible to businesses with multi-million-dollar tech budgets are now accessible to virtually every business. Every company should at the very least be using tools like Snowflake and Tableau or Power BI. The harder part for newly adopting businesses is going to be data quality and defining key metrics. Capable third parties are making use of these tools more actionable. After data quality and visualization are taken care of, PE portcos will move on to higher-order analytics, machine learning, and AI.

Outcome

Throughout Q2 and Q3, we received strong demand for BI, analytics and artificial intelligence for both PE firms and portfolio companies. The advent of AI is proving to be the biggest single catalyzing technology since the dawn of the modern internet in the mid-1990s.

Accuracy

3/3

The manufacturing sector, with its complex supply chains and reliance on precision, stands on the brink of a technological renaissance. As companies look to acquire or merge with manufacturing entities, IT due diligence emerges as a pivotal element, one that can reveal the technological prowess or deficiencies of a target company.

This meticulous examination goes beyond surface-level assessments, delving into the digital sinews that could either empower or inhibit a manufacturing giant’s capabilities.

Let’s look at each aspect of the IT due diligence process and how they can be tailored to manufacturing industry targets.

Preparation

A robust preparation phase is crucial for IT due diligence, particularly in the manufacturing industry where systems and practices may have remained unchanged for decades. This initial stage is about more than just assembling a team; it’s about cultivating a mindset geared toward comprehensive evaluation and future-proofing.

The team must not only have expertise in current IT trends but also in the legacy systems that are often prevalent in manufacturing. They need to be prepared to ask the right questions and to look beyond the surface to understand how IT systems support the manufacturing process, from inventory management to quality control.

Additionally, the preparation phase should involve establishing clear communication channels with the target company to facilitate a smooth and transparent information exchange.

READ MORE: What is Commercial Due Diligence?

Information Gathering

The information-gathering phase extends beyond cataloging software and hardware. It involves understanding the interdependencies of these systems and how they support the manufacturing process. A thorough analysis includes reviewing the lifecycle of IT assets, understanding the maintenance schedules and assessing the robustness of disaster recovery plans.

In manufacturing, where just-in-time delivery models and lean inventories are common, the ability of IT systems to provide real-time data and analytics is critical. This phase should also include interviews with key IT personnel to gain insights into the day-to-day operations and the challenges faced by the current IT infrastructure.

Asset Evaluation

Asset evaluation in the manufacturing sector must account for the unique demands of the industry. This includes considering the impact of IT assets on operational continuity, the ease of integrating new technologies and the support of continuous improvement initiatives.

Evaluating the IT assets also means considering their role in compliance with industry standards and regulations, which can be particularly stringent in manufacturing. The assessment should factor in the scalability of the IT systems to support business growth, the flexibility to adapt to new manufacturing methods and the ease with which the systems can interface with those of suppliers and customers.

READ MORE: Procurement, Sourcing in Manufacturing Industry

Contract Review

A meticulous contract review is essential to uncover any constraints that could limit the target company’s ability to adapt and grow. This step goes beyond confirming service levels and support terms; it involves evaluating the strategic implications of IT-related contracts.

For example, are there long-term agreements in place that could restrict the adoption of more advanced technologies? Are there exclusivity clauses or penalties for changing vendors that could financially burden the company post-acquisition?

The review should also consider data ownership and access rights, which are increasingly important in an era where data is a critical asset.

Risk and Opportunity Identification

Identifying risks in the IT domain requires a keen understanding of the manufacturing sector’s reliance on uninterrupted systems operation.

Risks can range from cybersecurity threats to the obsolescence of critical hardware or software. Conversely, the identification of opportunities should focus on areas where IT can provide a competitive edge, such as through the implementation of advanced analytics for process optimization or by enabling more responsive supply chain management.

This step should also consider the cultural aspects of IT change management within the manufacturing environment, recognizing that the adoption of new technologies will impact employees and workflows.

READ MORE: Power of AI, Data Analytics in IT Due Diligence

Recommendations

The final recommendations should provide a clear, actionable strategy for IT integration and improvement. This strategy must be aligned not only with financial objectives but also with the operational realities of manufacturing.

Recommendations might include a phased technology rollout plan that minimizes disruption to production, or suggestions for workforce training to ensure a smooth transition to new systems. The recommendations should also prioritize initiatives that can deliver quick wins, such as process automation or data centralization, to build momentum and demonstrate the value of IT investments.

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As the manufacturing industry continues to evolve, the significance of IT due diligence cannot be overstated. It is a critical exercise that, when executed with precision, can uncover hidden risks, validate the value of IT assets and identify strategic opportunities for technological advancement.

For investors in the manufacturing space, facing the complexities of IT due diligence requires a specialized skill set. A third-party expert, with a deep understanding of both IT and manufacturing, can be an invaluable ally. They bring a level of insight that ensures due diligence is not just a checkbox exercise but a strategic evaluation that informs investment decisions.

BluWave stands at the ready to connect you with the bespoke expertise your manufacturing IT due diligence requires. Our network of pre-vetted service providers is equipped to handle the unique challenges of the manufacturing sector, ensuring that your IT due diligence process is thorough, insightful and tailored to your specific needs.

To learn more about how BluWave can assist in your IT due diligence efforts and help secure the technological future of your manufacturing investments, reach out to our research and operations teams. Let us guide you to the ideal service provider and ensure that your next acquisition is technologically equipped to thrive in the modern manufacturing landscape.

Commercial due diligence is a critical step for private equity firms considering investment targets. Whether conducting a market analysis, understanding voice of customer or getting intel on the competition, the more accurate information a PE firm can obtain, the more informed their investment choices will be.

In the automotive sector, the stakes are particularly high given the industry’s complexity, rapid technological advancements and shifting consumer preferences.

As the global automotive landscape evolves, with an increased focus on electric vehicles (EVs), autonomous technology and innovative mobility solutions, CDD becomes an indispensable tool for investors to navigate the terrain with confidence.

CASE STUDY: Strategic Buy-Side Search in Healthcare Services

Let’s discuss the main aspects of commercial due diligence and how they apply to the automotive industry.

1. Comprehensive Market Analysis: Size

The automotive industry encompasses a vast ecosystem, including original equipment manufacturers (OEMs), dealerships, aftermarket providers and myriad service-related entities. To understand the market size, investors must dissect the industry into digestible segments. For instance, in the dealership and aftermarket spaces, it’s essential to quantify the number of potential service providers and the extent of services they offer. The goal is to identify the market’s expansiveness and potential growth areas.

A case in point is the burgeoning sector of tech-enabled EV charging infrastructure. As the adoption of EVs accelerates, so does the need for extensive charging networks. A CDD provider must evaluate the current infrastructure, forecast the demand for charging solutions and assess the scalability of businesses within this niche.

2. Comprehensive Market Analysis: Total Addressable Market (TAM)

Determining the TAM provides insights into the revenue potential across the automotive industry’s sub-sectors.

For instance, the TAM for digital marketing platforms serving auto dealerships is shaped by advertising budgets and the digital transformation of marketing strategies.

Similarly, in the emerging market of adventure vans, understanding the TAM involves analyzing consumer trends toward outdoor and lifestyle vehicles, the average spend on upfitting, and the potential for market expansion.

READ MORE: What is Commercial Due Diligence?

3. Competitive Landscape

A robust competitive analysis is crucial to understand the dynamics of the automotive industry. This involves identifying key players, their market shares and differentiators.

For example, in the machine handling space with applications in automotive manufacturing, it’s important to evaluate the competitive stance of companies providing pneumatic automation systems and their relevance to the industry’s move toward aluminum and other lightweight materials.

When evaluating merger and acquisition brokerage for auto dealerships, understanding the competitive landscape means assessing the consolidation trends, identifying the major players and evaluating the services offered to capture market share in a niche yet dynamic segment.

4. Voice of the Customer (VoC)

VoC research provides a window into the target market’s perceptions and needs. For automotive dealerships, it may involve gathering insights from general managers to understand the effectiveness of digital marketing services and the impact of technological changes such as the shift away from third-party cookies.

For providers of aftermarket products, VoC can reveal customer satisfaction levels, preferences for customization, and the importance of e-commerce channels.

CASE STUDY: Nearly $15 Million Saved on Resin Procurement for Plastics Company

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BluWave clients are increasingly seeking specialized providers on an industry-specific basis. As a result they’re getting valuable insights that would otherwise be unattainable from a generalist third-party.

In times where other PE firms are struggling to get the right information on the timeline they need, equipping yourself with unique data quickly will provide you with competitive edge.

The expertly vetted service providers in the BluWave network have performed countless commercial due diligence analyses specifically in the automotive industry.

Contact our research and operations team to get connected with a short list of PE-grade service providers within a single business day.

READ MORE: Voice of Customer Process: Methodologies for Better Service

Commercial due diligence in the media and entertainment industry brings with many nuances. A one-size-fits-all approach isn’t enough for private equity firms evaluating potential acquisitions.

Technological advancements and shifts in consumer behavior only complicate this process, making a thorough understanding of the market even more crucial.

Let’s discuss the four foundational aspects of CDD and how they can be applied to media and entertainment targets.

What is Commercial Due Diligence?

At a high level, there are four aspects to the commercial due diligence process.

Here’s how BluWave and its invite-only network of service providers see them through the lens of the media and entertainment industry.

1. Comprehensive Market Analysis: Size

A detailed examination of the market size offers the foundational knowledge required for any investment in the M&E space. This involves assessing the current scope and potential growth areas within segments like production, digital platforms, live events and direct mail and advertising.

For instance, clients exploring opportunities in live event production services, especially around sporting events, need to gauge the market’s expansiveness, including the demand for technical staffing and tech enablement solutions.

Similarly, investments in companies producing animated kids’ content necessitate an understanding of the spending trends on children’s episodic content and how they fit within the broader M&E market.

2. Comprehensive Market Analysis: Total Addressable Market (TAM)

Identifying the TAM enables investors to estimate the revenue potential within the M&E industry’s sub-sectors. This aspect is particularly significant for businesses like those offering digital marketing platforms for CPG brands or experiential marketing services.

By understanding the TAM, investors can evaluate the scalability of the business models and their ability to capture market share.

Assessing the TAM for a digital promotions platform, for example, requires insights into the digital vs. paper advertising space and the future of direct mail in the digital age. Similarly, for experiential marketing firms, understanding the TAM involves analyzing corporate marketing budgets and how they withstand economic downturns.

3. Competitive Landscape

A thorough competitive analysis uncovers the landscape within which an M&E company operates. It highlights the main competitors, their market share, strengths, weaknesses and differentiators.

In the context of the M&E industry, this could range from evaluating the competitive stance of a B2B media company across its business segments to understanding the unique selling propositions of firms in the live events production space.

Such an analysis helps investors identify the target company’s position in the market, potential threats and opportunities for differentiation and growth.

4. Voice of the Customer (VoC)

VoC research is invaluable in understanding the target market’s perceptions, needs and satisfaction levels.

In the M&E sector, this could involve gathering insights from broadcasters, streaming platforms and the end audience for content production companies.

READ MORE: Voice of Customer Process: Methodologies for Better Service

For businesses focused on technical staffing for events, VoC can reveal the reliability and quality of the workforce provided. Meanwhile, for companies in the direct mail and advertising realm, VoC helps ascertain the effectiveness and ROI of different advertising mediums from the advertiser’s perspective.

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We have recently seen many firms turn to more specialized providers due to the valuable insights gained.

In times where other PE firms are struggling to get the right information on the timeline they need, equipping yourself with unique data quickly will provide you with competitive edge.

The expertly vetted service providers in the BluWave network have performed countless commercial due diligence analyses specifically in the media and entertainment industry.

We vet each resource before they’re admitted into the network, and again before connecting them to you. After your initial scoping call with our research and operations team, you’ll meet the two or three “best fits” within a single business day.

Tell us about your project now, and we’ll get started with selecting your tailor-made solution.

Financial planning and analysis is an important tool for businesses in the complex industry of healthcare services.

Companies increasingly outsource their financial modeling, particularly as they seek to elevate their financial analysis to meet post-M&A requirements.

Leveraging the expertise of third-party specialists not only streamlines this transition but also injects a level of analytical rigor and foresight that can be transformative. Such partnerships empower companies with the insights and frameworks necessary for making informed decisions, ultimately driving growth and operational excellence in a competitive sector.

Let’s talk about some of these specific tactics and how they can help your healthcare services company.

The Need for Specialized FP&A in Healthcare Services

The healthcare services sector includes businesses such as Intellectual and Developmental Disability (IDD) services, hospice care and behavioral health supports. These sensitive areas present unique challenges for the FP&A process.

One of the primary tasks is the transition of projection models from annual to quarterly outputs to enhance capital investment planning. This shift allows for a more granular analysis of financial performance, facilitating better-informed strategic decisions.

Here are some of the hurdles you might encounter:

Challenges in Implementing FP&A Solutions

Outsourced Modeling for Projection Adjustments

Transitioning financial projection models from an annual to a quarterly basis poses a significant challenge, especially for organizations lacking in-house resources.

This process is essential yet complex, requiring expertise in financial modeling to ensure accuracy and relevance. The demand for such specialized skills highlights the importance of outsourcing, even for tasks perceived as straightforward but critical for long-term planning.

Post-Acquisition Financial Integration

Following mergers and acquisitions, the integration of financial systems and the standardization of KPIs to private equity standards become paramount. This process involves establishing a comprehensive opening balance sheet, developing appropriate KPIs and enhancing reporting capabilities.

The need for a robust FP&A resource to mentor the CFO and oversee this transition underscores the intricacies of financial integration in the healthcare sector.

Professionalization of Finance Functions

The professionalization of finance and accounting functions is a broad requirement within healthcare services, particularly in dealing with Medicaid and Medicare billing complexities.

The expertise in specific systems, such as Microsoft Dynamics, is crucial for the seamless operation of financial departments, emphasizing the need for seasoned professionals in these roles.

Solutions and Strategies

Expertise in FP&A and Modeling

Addressing the challenges outlined requires professionals with a blend of specific qualifications and experiences. An investment banking background, coupled with familiarity with healthcare services, positions FP&A professionals to effectively manage financial complexities and drive strategic initiatives.

READ MORE: Value of Senior Advisors in Healthcare

Strategic Decision Making

An FP&A professional’s role in guiding strategic decision-making is invaluable. By analyzing financial data and identifying trends, these experts work closely with CFOs to shape the strategic direction of healthcare organizations, ensuring that financial planning aligns with operational goals and market dynamics.

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Instances of outsourced FP&A expertise or the incorporation of specialized financial analysts have markedly improved financial planning, reporting and strategic decision-making within the healthcare services industry.

These success stories highlight the tangible benefits of specialized financial analysis, from enhanced accuracy in forecasting to more informed strategic planning.

As healthcare organizations navigate post-acquisition challenges and strive for enhanced financial reporting and forecasting, the value of specialized financial analysis expertise becomes increasingly evident.

BluWave is ready to connect your organization with top-tier financial analysis and modeling experts, tailored to meet the unique challenges of your healthcare services business. With our deep network of pre-vetted professionals, we ensure that you have access to the right skills and insights to elevate your financial strategies.

Set up a scoping call with our research and operations team and we’ll connect you with a short list of options within a single business day.