Private Equity and Digital Transformation – Creating Value Through Vision

The Holy Grail for private equity is to find a business you can grow rapidly and profitably. One area of growth that private equity (and everyone else) cannot ignore is the power of Digital Transformation. OK, that sounds a little like the start of a super-hero film but give this a moment.

Actually, a superhero doomsday setting isn’t that far off the mark. It’s a fact that a huge number of businesses are not prepared for the digital age. They don’t have a digital strategy and they are going to begin to fail more frequently, more rapidly as all aspects of digital marketing and digital buying continue to be felt.

So what does that mean for private equity firms? First and foremost, there are going to be some pretty good deals out there soon, but only for firms that understand the power of Digital Transformation. Instead of just growing value through acquisition and better management, prudent firms can target companies that can’t figure out how to transform their business model or processes to cut costs, gain more market share, and profit through digitization. Turning around these companies might be as simple as instituting a CRM system, or putting up a truly strategic transactional website to attract and convert more visitors. These are going to be the Private Equity Rockstars in the coming years. But that is the future – it’s now that counts.

The private equity firm that starts Digitally Transforming now is going to be way ahead of the curve. Look at the possibilities, the CRM, the strategic website, but look up, way up – two words: mission and vision. Think of the best companies on earth and you know what their vision is. Apple’s vision is to provide their customers with endless tech toys that all link together seamlessly. Netflix is all about bringing you endless entertainment for a monthly fee – and smashing the cable companies along the way. U.S. Steel is – steel. Nothing fires up a company more than knowing who it is and where it’s going.

This is an area that Digital Transformation excels at – transforming a company through vision. And in this case the vision is not a core principle – but the idea that the core principle needs to be transformed. Digital Transformation is about taking a company and growing profitability while you move the company into the 21st century. And that is exciting! Not only does it mean employees enjoy their work more as you eliminate duplication and admin work, but it conveys to everyone a new sense of purpose. Digital Transformation is really about changing HOW a company operates and not necessarily WHAT it does. Steel is steel – but that doesn’t mean U. S. Steel can’t digitally transform.

Think about that from a private equity setting. Supercharge a portfolio by transforming companies from within utilizing best practices for the 21st century – make them more profitable, revitalize entire cultures – maybe a Digital Transformation is a little like a super-hero movie! If you want to build ROI, create efficiencies, and drive a successful portfolio, you have to know how to implement a Digital Transformation.

Just one thing – stay in the suit – form fitting spandex is definitely a step in the wrong direction!

Digital Strategy Doesn’t Need to Be Overwhelming

If you have been studying digital transformation, website design, social media methods, online marketing or reading my recent articles, you may be feeling a little overwhelmed. It might seem like you need to have a masters degree and five years of experience in pretty much everything to do with the web to even start to develop a digital strategy. Many business owners decide to quit early and stick to traditional model and methods.

Unfortunately, traditional methods of doing business are becoming less effective. People are switching their business behaviors and doing everything online. You could be doing everything right, but not turning as much profit as your competitor and possibly working a lot harder as well. How do you get out of this fix?

Get help from someone who knows

We’ve lost count of the number of seasoned businessmen we have shocked when we presented a full digital strategy to them. There are so many components that have to work together to make it work. The first impression they have is, “My goodness, I’m not a digital guru! I don’t have time to learn this and keep my business going!” In short, they panic.

It’s true, there is a lot to keep up with. Not only that, but things like the online marketing landscape is always changing making it even more difficult. Google algorithm changes, pay per click or PPC ad placement shifts, new social media portals, new acceptable use policies, and many other things require digital strategists to constantly be on their toes. In fact, I would say 95% of all marketers don’t know how to properly implement a digital strategy. The technology and mindset is so new and so fast-paced that it’s hard to keep up unless you’re in the thick of it every day.

Part of what a digital strategist should do for you is to take away all that stress and just make online strategies work. Any good strategist will remove the feeling of being overwhelmed by your digital strategy and things like social media and website conversions become a source of excitement and not stress. Our clients tell us that by turning websites into conversion engines, we help them, as business owners, focus on their core business, while also building positive online reputation.

Doing it yourself can kill your business

Being an entrepreneur myself, I really respect business owners that try to dive in but this can hurt more than it helps if they haven’t done adequate research. Many business owners make the big mistake of thinking that SEO is the digital strategy. This is just a tiny component if at all anymore but businesses fall prey to companies that hound your business with “get ranked quickly ” schemes but if it’s done incorrectly, it could get your business completely wiped off of the search engines. Again, SEO is not a digital strategy, it is just a small component but let’s spend a moment on it.

SEO is a big culprit here. SEO is a set of methods used to boost the visibility of your website on search engines. If you’re easier to find, and ranked higher on the page, the more likely your site is to be clicked on. Sounds reasonable, but there’s a lot of ways that people have tried to manipulate the rankings over the years. Using methods that worked back in 2012 or earlier could get your site de-listed. Many of the strategies from that era focused on manipulating links back to your site in ways that went against Google’s core mission. When they implemented their Panda, Penguin, and Hummingbird updates to their engine, many sites got trashed in the rankings. Not just small time businesses either. JC Penny had to completely start over with their overall SEO strategy after they got hit by these updates.

Does that in itself sound overwhelming? If you don’t know where to begin, or if you thought you implemented a digital strategy and it’s just not gaining any traction, hire a digital strategist to transform your business. The investment is well worth your time and instead of just losing market share to your competitors you could start taking some of theirs!

Digital Transformation in Real Estate

In the last five years, however, the paradigm of real estate transactions has gone through a major change with digital transformation of our societies being at the heart of this change.

Every aspect of our lives has changed drastically in the last two decades and much of the change has been fuelled, catalysed and necessitated by the increasing digital awareness and ubiquity. The Real Estate industry, although, much slower to adapt to this change has since picked up pace and is now at the forefront of some of the cutting edge innovations.

As our lives are more connected, and there is greater financial freedom with easier movement possible, a greater value has now been found in attempting and executing phone system transactions online. There is less apprehension and greater confidence being shown by buyers, sellers, brokers, lessors in deploying digital mediums to conduct their real estate business.

The National Broadband Network in Australia is set to take this transformation into a much higher terrain as improving connectivity and access will bring about better transmission of data, improved transparency and a much larger populace into the online phone systems fold. Consumers will be able to view and evaluate properties from far and wide, while developers will be in a position to pitch them to a more varied audience. The brokers will find themselves being able to create unified platform for the interaction of both buyers and sellers.

Digital transformation in the real estate sector also means that there is an improved coordination and liaison amongst the various parties involved. Virtual meetings, conference calls and video conferencing means that physical presence is no longer the clinching requirement to close a deal. Digitization also moves the land records and ownership documents to the online sphere, this reduces fraudulent transactions and improves confidence amongst buyers.

Thus, we see that the actual transformation brought in by increasing digital presence in the real estate industry is to increase transparency and improve confidence amongst buyers. This has in turn allowed for a greater organization of the sector. Real estate brokers are now no longer regional players but can scale their operations with considerably decreased costs. For the buyers, there is a greater sense of security in real estate transaction. They have greater access to information which in turn provides them a clearer picture of the property in question and the sellers on hand. For the sellers, the new digital age has opened up new market avenues hereto non-existent. Wider scope, better targeting and improved conversions have helped bottom lines.

In conclusion, digital transformation has been a holistic and all-encompassing phenomenon that has helped each one of the stakeholders in the telephone systems chain.