Digital Transformation

Why Should Private Equity Firms Invest In Tech?

Modern technology is completely changing the way organizations today operate, and private equity firms must adapt to succeed.

Blog Post

4 minutes

Feb 10, 2022

Modern technology is completely changing the way organizations today operate, and private equity firms must—like any other business—adapt to ensure they remain competitive in the services they can offer partners.

We’ve rounded up four compelling and key reasons PE firms should invest in technology.

Take a look and learn why it’s important for the private equity industry to adopt and implement plans for digital transformation now.

Get Ahead of the Game

It’s not uncommon for private equity firms to be operating with outdated technology solutions for their work.

Endless, manually-inputted, spreadsheet databases on different systems can lead to an experience for firms that suggests they are not prepared to effectively fundraise or manage any process with a modest level of sophistication.

A majority of organizations take the view that technology investment is key in securing their future business prospects, and private equity firms are no different.

53% of firms now see technology as a key competitive differentiator that enhances their capabilities.

Modern solutions are made to help firms provide investors with a modern experience—mobile-ready applications and strong analytics, reporting, and communication tools.

These tech solutions make it easier to share relevant information with investors and build successful partnerships more effectively.

Private equity firm use of data | Why Should Private Equity Firms Invest In Technology?

Data Integrity at Risk with Old Working Processes 

The use of legacy applications and an over-reliance on manual processes actually risks the integrity of data relating to firms PE companies are investing in.

Modern solutions on centralized cloud databases allows PE firms to create a central hub of all information, totally secured and available to be accessed by every stakeholder that needs it.

Lack of Workflow Streamlining

Manual processes predominantly lead to two consequences—an unsatisfied workforce and inefficient workflows.

Applications today can streamline many working processes with automation that provides every piece of necessary information to the appropriate stakeholder within an automated framework that removes the need for unnecessary human input unless required.

The result of this is a far more productive working environment where data flows quickly and is funneled to exactly where it needs to be in an instant.

It also provides the added benefit of freeing up employee time so they can direct their efforts towards tasks that need a human touch.

Lack of Visibility

Sharing data with limited partners often involves several communication channels and instances.

These forms of communication are slow, lack visibility, and are not always secure.

Instead, private equity firms are investing in portals that allows partners to find the information they need with ease and on their own terms.

These portals are hosted on a secure platform and provides visibility in that verification can be ensured, documents can be electronically managed, and who’s seen or signed what can be viewed through a central management suite.

Siloed Systems Keeping Things Slow

It’s very common for organizations to have siloed systems—databases and applications that are disconnected from one another; often as a consequence of a slow build-up of software solutions over a long period of time.

A modern organization will often operate with an ERP, like Microsoft Dynamics. These ERPs are used to merge all applications into one central platform, preventing siloing and allowing decision makers to build a system where data from different apps is fed into a central hub in real-time.

This will typically include things like financial accounting, investor relations, portfolio management, and analytics reporting.

Bottom Line

Like many other industries, the need for private equity firms to improve their processes and embrace digitization is growing each year.

For those businesses that are still operating with older, legacy-style systems and applications, it may be worth considering whether a modern cloud solution may provide the necessary tools to ensure that partners can be better satisfied through the leveraging of this tech.

With more access to data, more transparency about information regarding partners, and a more effective way to present relevant information to them, investing in new technology solutions is a great way to improve this outlook.

If you’re considering investing in new technology to further your digital goals, then Impact Networking is the managed service provider you need. We offer the tools and expertise to help the modern company get their digital infrastructure in place and the means to compete and succeed. Learn more by taking a look at our digital transformation solutions.


Digital TransformationStreamline ProcessesPrivate Equity


Impact Insights

Our latest insights, articles, and videos delivered straight to your inbox.

More From Impact

View all Insights