Need: Due Diligence

A Wave of Deals is Coming: Commercial Due Diligence Webinar

September 20, 2023 Kyle Johnson

The private equity deal market has been slow in 2023. There are signs, however, that that could change soon.

In fact, BluWave founder and CEO Sean Mooney believes PE is ready to “call a bottom” based on proprietary internal data. That means that firms must have their due diligence resources lined up ahead of the anticipated wave of deals this fall and beyond.

Mooney was recently joined by BluWave Head of Technology Houston Slatton and Hidden Harbor CP Partner Andrew Joy to discuss the intricacies of commercial due diligence on a live webinar.

Watch the Webinar Replay
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Here are some of the top takeaways from their conversation:

Understanding Target Markets

The panel touched on how commercial due diligence is pivotal in assessing market conditions.

“The definition of commercial due diligence in my mind is a synthesis of all factors, both historically and in the future that affect the growth and the competitiveness of the target in that particular model,” Joy said.

This “synthesis” involves myriad factors, from end-market demand drivers to regulatory inputs and global competition. The goal is to understand not just the immediate future but to project growth and trends 10-20 years ahead.

“Commercial due diligence is a term of art for a market study,” Mooney added. “It’s standard operating procedure by the best private equity investors in the world.”

READ MORE: What is Commercial Due Diligence?

The Role of Due Diligence in Bid Strategy

The competitive landscape of private equity demands a unique approach to bid strategies.

Mooney said private equity firms aim to see something unique in their investment targets that others don’t.

“One of the big trends is investment bankers are starting to put sell-side commercial due diligence studies in the data rooms,” Mooney said. “The incentive may be for private equity firms, ‘Oh, this is great, I can rely on the money that they’ve spent and I’ll just take their word for it.’ “But a newsflash is, if you’re buying the market study, you get to pick what it says so you can frame it.”

He added that that’s one of the reasons the private equity industry still uses its “own source of truth.”

Joy elaborated on other challenges PE firms are facing.

“I think as information and data has become more commoditized and more accessible, it’s becoming harder and harder to really find areas where you have a competitive advantage,” he said.

Finding that unique angle in a saturated market can make all the difference for a firm.

READ MORE: Buy-Side Commercial Due Diligence Strategies

Choosing the Right Commercial Due Diligence Provider

The choice of a due diligence provider can make or break a deal.

Mooney emphasized the importance of team experience and relevance.

“When you’re vetting your group, I’ll show exactly how we do it. It’s ‘What is your experience in the defined industry you’re exposing? Which projects have you worked on in this industry?’ When did they work on it? Who is the team that worked on it?”

In the end, he said, it comes down to ensuring that the diligence team has relevant experience with the target, the market and the industry.

“I think it’s really finding the right team that has the most relevant experience and just knows the market cold,” Joy added.

Mooney also warned against trying to pull an up-market firm down to your budget. Because of scarcity of resources, this could mean they don’t put their best team members on your project.

Commercial Due Diligence Resources

As the PE world braces for influx of new deals, having your diligence sources lined up ahead of time is key. To learn more about how to prepare, you can watch the webinar on demand.

If you would like to hear about the commercial due diligence resources in the Business Builders’ Network, contact our research and operations team to scope your need.

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Panelist Bios:

Transforming Big Data into Actionable Insights for Legal Services

Industry: Professional Services

Service Area: Technology

Client Type: Portfolio Company – B2B Legal Services

Service Provider Type: Business Intelligence, Analytics and AI Firm

The Need
Efficient Analytics for Transaction Lode

A portfolio company in the B2B legal services sector reached out with a specific challenge. They had an Excel dataset with three tabs, each containing 1 million rows of transaction data. Their objective was to create cohort analyses and slice and dice this vast amount of information. Given Excel’s limitations, they needed a more robust solution.

The Challenge
Large Datasets and Tight Deadlines

The company, which offers online legal services to SMB customers, had recently accessed a large transaction database that was cumbersome to manage in Excel. They needed to make use of the new data trove for an upcoming project on a short timeframe. Their previous go-to firm, which used Tableau for data visualization, was unavailable for immediate assistance.

How BluWave Helped
The Right Big Data Connections, Fast

Understanding the urgency and the scale of the data challenge, BluWave tapped into its network to identify a boutique business intelligence, analytics and AI firm with the expertise to handle large datasets efficiently. The selected firm was lauded for its ability to work at “deal speed,” ensuring that projects were completed promptly without compromising on quality.

The Result
Seamless Integration, Insightful Analysis

With the expertise of the selected service provider, the portfolio company successfully integrated their vast transaction data into a more manageable and analyzable format. The firm not only set up the database for easy manipulation but also provided rigorous analysis, offering valuable insights that were highly appreciated by the company’s management team during diligence. The entire process, from initial setup to detailed analysis, was completed within the tight deadlines, ensuring the company was equipped for its key upcoming project deadline.

Their analysis was rigorous, and a company’s management team found their work to be insightful during diligence. They operate at deal speed and frequently work late at night and over weekends to ensure clients receive quality work product on time. I’d highly recommend their services.

-Vice President at PE Firm

Revamping Market Positioning, Expanding with M&A

Service Area: Commercial Due Diligence

Client Type: Portfolio Company

Service Provider Type: Merger & Acquisition Strategy Firm

Industry: Generalist

The Need
Reinvigorating Market Strategy and Exploring M&A Opportunities

A portfolio company sought help improving its market positioning and evaluating strategic M&A prospects within the HR SaaS sector. With a strong tech-focused approach, the firm aimed to identify adjacent markets and solidify its foothold through targeted acquisitions.

The Challenge
Navigating Complex Market Dynamics

The challenge lay in revitalizing the company’s market strategy. The client required a comprehensive analysis of their current positioning and an exploration of potential adjacent markets. Additionally, the portco sought guidance on devising a strategic M&A roadmap that aligned with their growth objectives and unlocked synergies.

How BluWave Helped
Strategic Insight and M&A Roadmap

BluWave connected the client with an M&A strategy firm well-versed in the HR SaaS industry. This partnership offered the portfolio company strategic expertise to analyze their current positioning and identify gaps. The specialized firm crafted a tailored plan for expansion into adjacent segments, including evaluating potential M&A targets. Weekly interactions with the investment team ensured alignment and effective execution of the strategy.

The Result
Empowering Informed Decision-Making

Through this collaboration, the client gained in-depth insights into their current market standing and potential growth opportunities. The M&A strategy firm’s expertise assisted the client in devising a strategic roadmap for M&A, considering tuck-in acquisitions and larger-scale ventures. This collaborative approach enabled the firm to make informed decisions, enhance its market presence and strategically leverage its investment for maximum impact.

The service provider was knowledgeable about the sector. They provided concrete action items and feedback. They also responded to feedback on the initial draft report to provide a final project in-line with expectations.

-VP at Private Equity Firm

Healthcare Compliance: Due Diligence Checklist

August 21, 2023 Kyle Johnson

Healthcare is a hot sector for private equity firms looking to acquire new portfolio companies.

Buy-side commercial due diligence on healthcare compliance is table stakes before any deal gets done.

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One expert service provider from our network says his firm has seen an influx of diligence requests in this industry since the beginning of 2022, and it hasn’t slowed down since.

“There continues to be a lot of interest in the healthcare sector, whether it’s device manufacturers or contract manufacturers, and even services,” Don Jenkins* of M&A Healthcare Experts says. “Whether it’s tele-health-related services or just other technology platforms that can address healthcare service delivery.”

Here are some of the top trends and must-haves in healthcare due diligence.

Private Equity: Healthcare Sector

With so much money to spend on hand, Jenkins says that middle-market private equity is all over the map.

When he thinks about the last 50 projects they have done for private equity firms, he estimates they would span 20 different markets.

There are a couple, however, that have stood out since as we head deeper into an uncertain, if not turbulent economy. One of those is healthcare.

Firms want to dig deep to learn more about the devices and software systems being used in hospitals. Just as popular, though, are in-home services that allow people to receive diagnosis and treatment from the comfort of their home. This trend has become especially important since the onset of COVID.

Healthcare Due Diligence Process

“Essentially the goal of commercial due diligence is to validate the story that the target’s telling, or to identify the reality of the marketplace out there so that they can make an informed decision on their investment,” Jenkins says.

While the fundamentals of commercial due diligence are the same from one market to another, there are nuances to businesses based in hospitals, pharmacies and other related medical organizations.

Since these companies are creating or using products that affect people’s health, there’s increased risk, which means more scrutiny is needed.

“It can be a very different set of objectives, but if it’s a product, then there definitely will be regulatory issues involved,” Jenkins says.

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Service providers in healthcare aren’t just trying to make better products and improve services, they also want to be more affordable.

“It’s still technology, but we’re not trying to design the greatest device, the greatest stent in the world, or the greatest cardiovascular diagnostic product ever made,” Jenkins says. “It’s really what sort of products and services can we develop that are going to not only get the job done, but do it in a more cost-effective manner so that it’s more affordable for the healthcare ecosystem.”

In particular, that ecosystem includes insurance providers and patients. The easier it is for them to engage with a health company’s products or services, the more successful the business will be.

“There are just a lot of moving parts in healthcare that make it an interesting space,” Jenkins adds.

BluWave co-head of research and operations Scott Bellinger most frequently fields calls related to these areas:

  • Medical Devices: “Regulatory review on manufacturing processes to make sure they’re FDA compliant.”
  • Operational Diligence: “Understand how you can manufacture those devices at a faster more efficient clip.”
  • Ancillary Service Buildouts: “For example, if you’re ear, nose and throat, do they have an ambulatory services center?”

Jenkins isn’t the only one seeing an increased demand for commercial due diligence in healthcare. It continues to be one of the most important industries to our clients as well.

That’s why we spend so much time connecting with and evaluating due diligence service providers who know healthcare – and every other sector that touches private equity – inside-out, backward and forward.

Our research and operations team takes a hands-on, white-glove approach to every project they service, from the first scoping call until after the engagement is complete.

If you’re looking for proven, PE-grade service providers to conduct buy-side diligence on your healthcare acquisition, contact us today. We’ll provide two or three best-fit options for your exact situation and specific needs within a single business day. From there, we’ll hold the third-party resource accountable and make sure they’re meeting all your needs until the ink is dry.

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*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.

What To Do When Your Service Provider is at Capacity

August 15, 2023 Kyle Johnson

Connecting with a service provider you can trust is like looking for a great dentist. Once you find “the one,” you wouldn’t put your teeth in anyone else’s hands.

The same goes for your business. After a successful engagement with a trusted third party, you save a lot of time by contacting them directly the next time you have a need.

There are reasons you have go-to service providers: they’re fast, reliable and they know your business.

But if you love them so much, you’re probably not their only client. Far from it.

So what happens when you reach out and they tell you they simply don’t have the capacity to take on more work on the timeline you need? Or worse yet, they give you their B-team.

We’re glad you asked.

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There are a number of reasons service providers could suddenly be in high demand. A bounce-back from a recession. A surge in deal flow. A hot new trend of which everyone’s trying to stay ahead.

When this happens, BluWave is on standby with a deep bench of trusted, PE-grade third parties who can deliver the exceptional work you expect no matter what your industry.

In fact, we experienced this post-COVID recovery when the whole world got back to business at once and it seemed like there wasn’t enough help to go around. At that time, we heard from dozens of private equity firms that couldn’t book their preferred third-party resource.

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We helped those firms by connecting them with industry-specific firms and consultants that understood their business’s most pressing needs.

Every service provider in the Business Builders’ Network has gone through a rigorous vetting process, giving us confidence in every match we make whether it’s a first-time engagement or a repeat relationship.

BluWave founder and CEO Sean Mooney has three tips for organizations when their usual service providers are at full capacity.

1) Use Alternatives

“If you’re go-to is sold out, don’t try to force them into giving you capacity. You’ll get the C team,” Mooney says. “There are plenty of other comparable PE-grade specialists that you should use.”

2) Use Substitutes

“There are other diligence and value creation products that go by a different name but still serve your need,” he adds. “For instance, if you can’t get a commercial due diligence group to meet your deadline, use a voice of the customer group to do a deep dive on your target’s customers.”

3) Use Independent Consultants

“There’s a select world of independents who spun out of name-brand shops and can give you the same product at a fraction of the cost,” Mooney says. “This cohort works well not only for commercial diligence, but also for operational and HR diligence as well as value creation.”

Mooney recognizes that trusting your most important work to new partners can be scary. With the right introduction, though, the risk can have a huge payoff.

“Using new groups can be nerve-racking,” he says, “but the BluWave network of PE-grade resources is on standby to meet your specific needs.”

Get Connected Now

Whether your go-to service providers are at full capacity, or you just don’t know who to turn to, give our research and operations team a call. They’ll connect you with a shortlist of exact-fit third parties within a single business day, and be by your side until the completion of the project.

Market Study for Financial Services Acquisition Target

Service Area: Commercial Due Diligence

Client Type: Upper-Middle Market Private Equity Firm

Service Provider Type: Strategy – Market Study

Industry: Professional Services

The Need
Niche-Specific Financial Services Market Study

An upper-middle market PE firm wanted to conduct a comprehensive market study on an acquisition target: a company that provides part-time finance resources and accounting services to non-profits.

The Challenge
Navigating Multifaceted Industry

The challenge lay in dissecting the multifaceted industry landscape, combining accounting, consulting and staffing. The market study would need to reveal client behaviors, buyer dynamics, TAM and competitive landscape.

How BluWave Helped
Strategic Connection for Deep Market Insights

BluWave identified a market study firm with:

Non-profit Expertise: Specializing in financial services, offering insights into accounting, consulting and staffing dynamics.

Comprehensive Analysis: Explored client behavior, buyer landscape, competitive positioning and growth potential in nonprofit financial services.

Future-Forward Focus: Investigated data analytics and cloud synergy with nonprofits, enhancing AI/ML capabilities and implementation strategies.

The Result
Study that Surpasses Expectations

The market study revealed all the PE firm had hoped for and more:

Holistic Understanding: Unveiled nonprofit finance nuances, including part-time resources and consulting, providing a comprehensive sector view.

Strategic Opportunities: Analyzed client behaviors and growth prospects, empowering the PE firm with expansion strategies.

Future Resilience: Explored data analytics and cloud services’ role in nonprofit finance, boosting sector resilience and innovation.

Great communicators with a strong command of the materials and the mandate.

Director at PE Firm

Navigating an Intercontinental Aerospace Merger

Service Area: Merger Planning & Integration: Post Merger Integration

Client Type: Middle Market Private Equity Firm

Service Provider Type: Post Merger Integration Consultant

Industry: Manufacturing: Aerospace

The Need
Forging Unity Across Borders

When a middle-market private equity firm acquired an international aerospace entity, the challenge of seamless integration across borders emerged. Seeking expertise beyond their organization, they turned to BluWave for strategic matchmaking with a post-merger integration (PMI) specialist.

The firm understood the critical role of effective integration in maintaining business continuity and customer trust, and they wanted outside help to do it.

The Challenge
Bridging Gaps in Aerospace Integration

With a multi-country aerospace entity acquisition, the complexities of integration spanned geographical, operational and cultural dimensions. The task of harmonizing processes, systems and customer interactions across 14 countries presented a formidable challenge. The focus was on preserving customer trust, especially with industry giants, while optimizing operational efficiency in the global landscape.

How BluWave Helped
Industry-Specific Resource with International Experience

BluWave’s intimate knowledge of the world-class service providers in its network accelerated the PE firm’s selection of an exact-fit service provider:

Expert Identification: BluWave knew exactly which PMI specialists had aerospace knowledge and cross-border integration experience.

Customized Matching: Through a thorough assessment of the client’s requirements, BluWave matched them with a PMI consultant whose expertise aligned with the specific challenges of aerospace integration.

Strategic Alignment: BluWave ensured that the chosen PMI expert understood the client’s objectives, including maintaining customer trust, achieving operational efficiency and realizing synergies.

The Result
Achieving Integration Excellence

The PMI specialist delivered for the PE firm across the board:

Seamless Transition: The acquired aerospace entity underwent a smooth integration, preserving customer relationships and business continuity.

Operational Excellence: Cross-border collaboration and efficient integration processes contributed to optimized operations.

Customer Trust: Through meticulous execution, customer trust and satisfaction were upheld, especially with industry giants.

Exploring Uncharted Territories: Fireworks Industry Due Diligence

Service Area: Commercial Due Diligence

Client Type: Middle-Market Private Equity Firm

Service Provider Type: Growth Consulting Firm

Industry: Consumer Products

The Need
A Precise View in a Unique Landscape

With an upcoming deal on the horizon, a middle-market private equity firm recognized the need for a comprehensive due diligence process tailored to the distinctive consumer products landscape. The target industry was fireworks, a space characterized by its unique challenges, regulatory intricacies and global sourcing complexities.

The firm’s aim was to gain insights that spanned beyond a typical market study, encompassing both regulatory risk and market dynamics.

The Challenge
Navigating the Fireworks Ecosystem

The fireworks industry presented multifaceted challenges, including sourcing aspects predominantly tied to China, intricate state-by-state regulatory variations and the growing importance of e-commerce channels.

The private equity firm needed a partner to conduct a thorough regulatory analysis, evaluate state-specific risks and conduct a comprehensive market study to assess competitive dynamics and potential growth avenues.

How BluWave Helped
A Holistic Approach to Due Diligence

BluWave connected the firm with an industry-specific strategic partner. Collaborating closely with the private equity firm, they embarked on a multifaceted due diligence journey:

Comprehensive Market Study: Leveraging industry expertise and research capabilities, the service provider delved into the fireworks ecosystem. Through diligent analysis, they unraveled competitive dynamics, potential market growth and identified untapped opportunities.

Regulatory Risk Assessment: Recognizing the paramount importance of regulatory compliance, the service provider meticulously assessed state-by-state regulatory variations. This proactive approach provided the private equity firm with a comprehensive understanding of potential hurdles and growth enablers.

E-commerce Landscape: The rise of e-commerce channels posed an intriguing challenge. The service provider scrutinized the potential of e-commerce platforms for fireworks distribution, uncovering the nuances and challenges specific to this consumer product.

The Result
Empowering Confident Transactions

The comprehensive due diligence approach conducted by the growth consulting firm facilitated a well-informed transaction decision for the private equity firm. The insights garnered proved invaluable, contributing to:

Informed Decision-Making: Armed with a deep understanding of the fireworks industry, the private equity firm could assess regulatory risks and potential growth pathways with precision.

Proactive Strategy: Regulatory insights provided the firm with a strategic edge, enabling them to develop a comprehensive roadmap to address challenges and capitalize on opportunities.

Collaborative Partnership: The partnership between the service provider from BluWave’s invite-only network and the private equity firm yielded a fruitful experience, setting the stage for potential collaboration in future projects.

The team was excellent and we enjoyed working with them. I would be surprised if we didn’t find a way to utilize them in more projects moving forward. Very solid work product – clear, concise and easy to follow. Had a very good experience.

-Associate at PE Firm

Seamless Integration for a PortCo’s First Add-On Acquisition

Service Area: Merger Planning & Integration

Client Type: Lower-Middle Market Private Equity Firm

Service Provider Type: Integration Consultant

Industry: Professional Services

The Need
Navigating the First Steps of Expansion

A lower-middle market private equity firm’s portfolio company was poised for its first substantial add-on acquisition. The organization specialized in transaction-based due diligence support for law firms, encompassing vital tasks such as litigation summaries, background checks and certificates of good standing.

With a dedicated team of paralegals and a proprietary tech-enabled workflow tool, the company had carved a niche in the market. The impending integration of the add-on acquisition marked a pivotal step, though, demanding meticulous planning and expert execution.

The Challenge
Orchestrating Harmonious Integration

The challenge lay in orchestrating the integration of the add-on acquisition while ensuring minimal disruption to the existing operations. The portfolio company’s unique business model involved a distributed setup across multiple fulfillment offices nationwide. Siloed workflows and varying systems compounded the integration complexity. With aspirations to synchronize operations and create a standardized platform, the portfolio company sought an integration consultant to guide them through the process.

How BluWave Helped
Crafting a Blueprint for Seamless Integration

Collaborating closely with the portfolio company, the BluWave-selected service provider crafted a comprehensive integration strategy that aligned with the company’s growth objectives. The multifaceted approach encompassed:

Pre-Close Planning: The service provider defines integration objectives, assessed synergies and outlined the integration process.

Tech-Enabled Solutions: Given the nature of the portfolio company’s operations, the service provider recognized the potential for tech-enabled solutions. Robotic process automation (RPA) was explored to alleviate repetitive computer-based tasks and streamline workflows, enhancing efficiency and reducing the burden on human resources.

Operational Harmonization: Finally, the service provider facilitated discussions and collaboration between headquarters and fulfillment offices, fostering a unified approach. The integration plan focused on gradually migrating offices onto a common system while preserving operational continuity.

The Result
Paving the Path to Scalable Growth

By providing a clear roadmap, harmonizing operations and leveraging tech-enabled solutions, the integration process yielded several outcomes:

Smooth Transition: The integration was executed with minimal disruption to ongoing operations, allowing the portfolio company to maintain service quality and customer satisfaction.

Operational Efficiency: The implementation of RPA reduced the burden of repetitive tasks, freeing resources to focus on value-added activities.

Scalability: The integrated platform laid the foundation for future acquisitions by creating a standardized framework and a playbook for successful integration.

Manufacturing Growth through Market Insight Diligence

Service Area: Commercial Due Diligence: Market Study

Client Type: Middle-Market Private Equity Firm

Service Provider Type: Market Research Firm

Industry: Manufacturing

The Need
Seizing Growth Potential in Heat Treating

Our middle-market private equity firm client sought to empower its portfolio company operating in industrial manufacturing. The portco was a leader in gas nitriding technology, primarily catering to the automotive, aviation and industrial sectors. The firm aimed to broaden the company’s horizons by identifying new opportunities within heat treating, especially in areas beyond gas nitriding. The goal was to expand its offering through strategic add-ons that leveraged different heat treating technologies, driving further growth and market penetration.

The firm knew it would need a world-class commercial due diligence resource to match its ambitions.

The Challenge
Navigating the Complex Industry Landscape

The private equity firm faced the challenge of exploring a highly specialized sector – heat treating technology – to identify viable add-on opportunities. The task required pinpointing key players, understanding market drivers and evaluating potential target companies that aligned with the portfolio company’s capabilities and ambitions. Budget constraints demanded resourcefulness in delivering valuable insights without compromising quality.

How BluWave Helped
Industry-Specific Research Firm To Drive Expansion

BluWave connected the private equity firm with a PE-grade resource to conduct an in-depth market study, leveraging their expertise in market research and manufacturing. They then uncovered key players, market trends and drivers within the heat treating technology sector. Leveraging their understanding of the end-use industries, including automotive and aviation, the firm identified strategic alignment opportunities.

Their familiarity with furnace manufacturing, heat treating elements and component industries enabled them to analyze competitive processes, production methods and best practices.

The Result
New Pathways to Expansion

The third party firm’s market study equipped the portfolio company with a roadmap for expansion in the heat treating sector. By identifying key players, drivers and market trends, the private equity firm gained insights into new growth avenues. The study not only laid the groundwork for strategic add-on acquisitions but also provided a broader understanding of market dynamics, fostering informed decision-making.

The portfolio company was empowered to consider new technologies and approaches, aligning its offerings with the evolving demands of the automotive, aviation and industrial sectors.

The Road to AI Implementation: Strategic Planning, Data Management, Cybersecurity

July 18, 2023 Kyle Johnson

What’s worse than not implementing artificial intelligence tools into your business?

Implementing them without a plan.

While it might feel like you’re falling further behind competitors every day you’re not adding AI to your tech stack, you’re better off waiting a little longer to get it right. Rushing out a half-baked product will only cause you more harm in the long run.

Let’s dive in to some of the key precursor activities for implementing artificial intelligence into your business.

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Aligning AI with Business Strategy

As you choose your AI use cases, it’s essential to align them with your broader digital and business strategies.

Nik Kapauan, principal at Access Holdings, recently talked about this on a BluWave-hosted webinar, Activating AI.

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“Your strategy for using AI obviously needs to tie to your broader digital strategy, which needs to tie to your broader business strategy as a firm,” Kapauan said. “I’d also bifurcate it because when we say AI, it’s a broad spectrum of things. You have your traditional analytics, which is descriptive analytics, just getting stuff on a screen and reporting. And then you have your more predictive analytics for predicting the future.”

In either case, Kapauan reiterated the importance of aligning with your overall goals, noting that predictive analytics allow for more flexibility.

“The way you’d approach that strategy is a bit more iterative, a bit more experimental,” he said, “trying to get use cases and experimenting as soon as you can to figure out where the value is.”

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Tackling Data Challenges

Data is at the heart of any AI initiative. The service providers in our network say the number one hurdle businesses face to adding artificial intelligence tools is not having a good sense of data availability or hygiene, respectively.

“A lot of people want to jump to the model or the technology. ‘What if we could do this with customers?’ I think it’s really important to start with, ‘What is the space of data that we have at our disposal?’” Michael Woods*, the CEO of an AI consulting firm BluWave works with regularly, said in an interview. “Then just as importantly, ‘Do we have any sense of the inaccuracies or things that could really lead us astray in that data?’

On the AI webinar, Kapauan said that handling data is often the most significant part of large analytics projects.

“That centralization of data, the cleaning of data, the ongoing maintenance of data, is the lion’s share of the effort,” he said.

BluWave CEO & Founder Sean Mooney said the effort, however, is worth it.

“You’ve got to do the unglamorous data cleanliness part… the only thing worse than no data is bad data,” he said. “Keep [the data] good because it’s like a piece of equipment that’s gotta be maintained. Anytime there’s rotation and force in anything, it wants to lose calibration.”

READ MORE: AI Data Analytics: BI Tools

Change Management: A Key Component

Kapauan emphasized the need for a high-level leader to drive the change internally when significant changes are being made to the way a business operates.

“I think one of the biggest predictors of success is a champion inside the organization that could really own the vision and drive the opportunity. And often that’s the CEO or someone the CEO directly holds accountable for the digital agenda,” Kapauan said. “Having that leadership voice to set the vision and drive the organization and mobilize change is critical to success for analytics and any other kind of major digital transformation.”

Mooney added that this is a key part of change management.

“AI’s going be part of your strategy,” he said. “It’s a tactic, it’s not your strategy.”

Securing Your Data Assets

Finally, as businesses build up their data assets, it is vital to safeguard them.

“We want to make sure that we protect [our resources] from theft, making sure that if someone gets into our organization that they can’t pull that model out and take it with them to use somewhere else,” said Keith Thomas, the Cybersecurity Operations National Practice Lead at AT&T. “There are some ways that we protect using different security tools, and different security capabilities support the idea of a [data] model theft by attackers.”

Thomas also emphasized the importance of having a robust disaster recovery plan. If an AI system goes down, the team must be prepared to mitigate any negative impact on data and analytics.

“Even if it is to go to a manual approach, that’s OK. Having the plan is the most important part of that,” Thomas said.

Mooney pointed out that various resources are available to help businesses of all sizes protect their most critical asset: their data.

“Once again, we’re seeing this theme of, ‘failing to prepare is preparing to fail,'” Mooney said. “You’ve gotta do the work in advance. Not just even on the data and the analytics side, but also in protecting your data.”

BluWave has seen a rapid uptick in demand for AI-related services recently. What many firms lack, though, is the necessary foundation to get started.

Aligning your AI tactics with your overall business strategy, preparing your data, identifying an internal champion and protecting your data assets are crucial precursors to implementing these powerful new tools.

Whether you’re at a private equity firm, portfolio company or private or public organization, BluWave’s Business Builders’ Network is full of expert third-party AI resources. These highly vetted service providers can not only help you with the aforementioned preparations, but will also work with you to implement these tools.

Contact our research and operations team to learn more, and we’ll connect you with an industry specific expert to assist your digital transformation using artificial intelligence.

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*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.