March 13, 2018

Disrupting Private Equity: How IT Can Change the Way You Do Business

by: Align


Photo Credit: © Sikov -

Private equity has been slow to embrace the benefits of modern IT. Disruptive firms are leveraging data and analytics to gain a competitive advantage, but they remain a pityingly small minority – most firms are stuck with processes that have long since become inefficient in the wake of more complicated metrics and changing partner expectations.

Stuck in the past

Despite the constant stream of disruptive technologies that are changing the way a lot of industries do business, private equity is stuck in a rut bound by outdated processes and operational inefficiencies. In an industry where data security is paramount and reporting and regulatory requirements are bringing increased scrutiny and higher stakes, manually data entry into spreadsheets will not suffice. It’s imperative for modern private equity firms to embrace and explore what the latest technology can do for their workflows to both stay competitive and remain compliant.

The time for change is clearly long overdue. A process as time-consuming and error-prone as manual spreadsheet entry is an extraordinary operational bottleneck. It is ultimately a waste of company resources (likely involving multiple employees) in an imprecise process, which can easily be automated and better-executed through the functions of a data management system. Resources expended on manual data management are better allocated to staying abreast of ever-evolving regulatory requirements and managing partner relationships.

Regulatory and Compliance Requirements 

Data management systems are also essential to maintaining regulatory and compliance requirements. The need for a reliable, robust system will become especially imperative with the global implications of the General Data Protection Regulation, which goes into effect in May of 2018. There are numerous data management systems that integrate backup, recovery, archival and search capabilities which allow private equity firms to customize how their data is classified, where it resides and how it is used. Additionally, many solutions include security capabilities to protect proprietary firm data. Regulatory scrutiny necessitates empowering businesses with technologically-strong processes, and data management systems can pave the way there. 

Private Equity Cybersecurity

Automated processes powered by technology are just the beginning. Data security – particularly with regards to the PE landscape and within the global regulatory environment – places considerable expectations on firms to furnish information for compliance purposes. All of this is made more difficult when data is poorly-entered and poorly-managed, meaning on the fly inefficiency can create huge headaches down the road. Recent regulatory standards come with the threat of significant fines, so it’s in a firm’s best interests to sort out their security before – not after – a breach happens. The business incentive to demonstrate a thorough and trustworthy due diligence process is not only for the purpose of staying competitive, but for avoiding legal repercussions.

Changing the way you do business can seem like an overwhelming task. Where do you start? How long will it take? How do you implement changes? Making a major technology shift requires a trusted partner to guide you through what you need to know. The experts at Align leverage over three decades of experience in managed and professional services to provide tailored, holistic solutions to meet our clients’ needs.

For more information, explore Align's Comprehensive Cybersecurity Risk Management Solution.


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