As the shift to remote working due to the pandemic becomes the new norm for financial hubs, private equity firms’ push towards digital transformation has significantly accelerated. GPs have been forced to update their technology stacks to adapt to the operational challenges presented by covid-19 quickly and efficiently. One core way in which this has been done is by implementing cloud-based technology.
The industry has been slow to adapt to technological change; however, forward-thinking GPs are looking to the cloud to provide a competitive edge. Today, savvy GPs need to expand their cloud comprehension beyond private, public or hybrid cloud types to include knowledge of how cloud specializations, such as productivity and data clouds, are used to dramatically improve front, middle and back office operations.
Productivity clouds are designed to enhance operations so that teams can effectively collaborate across departments and locations in real time. This functionality has been key to the success of remote working strategies following covid-19. As we start to see the model of traditional physical office presence and on-premises tech infrastructures challenged, new flexible models accessible through cloud technology may become the mainstay given they provide many benefits over communication alone.
The deal management team will also see benefits when assessing a new opportunity. For example, they can use Microsoft 365 to automatically create a dedicated channel in Teams for improved communication, a folder in OneDrive to work collaboratively on deal docs, and generate a calendar invite to provide all the items the deal team need to be organized efficiently. With all these tasks automated, the deal team’s time is freed up so that they can focus on more strategically important items such as origination and deployment.
The productivity cloud is not the only relevant specialized application of the cloud for GPs. As private equity investing becomes more data-driven (as GPs look for any sourcing or deployment edge they can find), the need for a significant increase in efficient data exchange between GPs, LPs and portfolio companies is more important than ever. By utilizing the “data cloud,” hosting data on a modern cloud platform, firms can democratize their data and make it easy to access and share securely across a firm’s business ecosystem. It also allows for the storage, management and manipulation of data in centralized locations. This lends itself well to remote working, scaling up and down quickly and maintaining the flexibility to react effectively to unexpected events such as covid-19. Existing investments in legacy systems can often be integrated into a new cloud environment, or firms may decide to future-proof by upgrading to cloud-ready systems.
Utilizing purpose-driven clouds, whether productivity or data-focused, improves investment decision-making, communication and collaboration and takes the heavy lifting out of traditionally time-intensive manual processes. By partnering with a cloud and application specialist, the robust functionalities the cloud offers can be customized and tailored to help GPs embrace digital transformation and gain the competitive edge they require.