Our services
Our approach
Where technology is a driver of investor value, ROI is a function of the entire technology ecosystem encompassing both commercial, technology and operations.
So we consider the full breadth of the ecosystem, from the senior management team’s aptitude to technology (which influences adoption and capital efficiency) to technology architecture and operational infrastructure which can dictate regulatory compliance and the ability to expand into new services and new geographies.
And we go into the detail because we know from experience that an entire investment thesis can be derailed by one or two factors buried deep down in the organisation.
We provide a view on the current and the future, on performance, risk and opportunity.
If we find issues, we present you with options and a view on cost, risk and time to mitigate.
01. Technology advisory
Technology strategy
We draw from our deep operational experience and current best practices to author strategies which deliver significant ROI and are practical to implement.
There are common objectives, such as increasing revenue, reducing operating costs and building Intellectual Property, and common levers including data, product management, proprietary development and adoption of third-party systems. The details of implementation, however, vary greatly depending upon the specific organisation, its markets and regulatory environment, and the EBITDA and time objectives of your investment thesis.
Second opinion
We review vendor proposals and third-party analysis to give an independent view. We provide clarity and articulate the true risks and value to your investment.
AI risk and opportunity analysis for funds
Whilst the speed of transformation and the impact varies by sector, almost every industry is adopting AI into mainstream operational processes. This is both a value opportunity and an investment risk. We explore AI opportunities within a portfolio company and the threat from use of AI by its competitors to articulate how it might increase the valuation multiple, be an existential threat or drag down value at exit, or raise revenues and reduce costs.
Exit preparation to maximise price and reduce deal friction
In the months preceding exit, it is possible to improve the technology assets and organisation so that the business is more attractive to potential buyers. This aim is to reduce value-drags, such as probable post-acquisition integration costs, and demonstrate the ability to support growth levers under the next investor. Effective actions can range from planning and strategy development to implementation.
02. Technology due diligence
Service delivery mapping
Different companies seldom use technology in exactly the same way, therefore we start our technology investigation by mapping the service delivery processes that drive most of the investment thesis value. Mapping the service delivery articulates:
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Where proprietary and third-party technology is critical to the investment thesis, and where components can be substituted by the company or made irrelevant by its competitors.
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FTE dependencies (‘human links in the chain’) that present risk and growth constraints or, more typically, must also scale as the technology scales resulting in erosion of operating margins.
Performance assessment & benchmark
Our performance benchmark is a blend of historical observations made by us and of best practices currently being deployed in industry leaders throughout the world.
To ensure consistency of our assessment, we have developed proprietary questionnaires that our due diligence teams use to synthesise their findings. These are not given to the target company to answer, nor asked verbatim. We combine this with programmatic analysis of cybersecurity, code and infrastructure to produce quantitative performance assessments and benchmarking.
Some risks, such as poor cybersecurity posture, are purely technical and can be identified with programmatic tools. Others are structural, such as inadequate database architecture, or operational in nature, such as poor regulatory compliance or poor adherence to cybersecurity practices. For these risks, identification requires a blend of structured assessments and interpretation based upon operational experience.
For every risk to the investment thesis we identify, we reach out to our global network of practitioners to explore best-in-class mitigation options, the value at risk, mitigation effort and the probable cost of mitigation.
Risks, challenges & mitigation options
We have developed a standardised risk assessment framework which quantifies risks for both the immediate and longer term, giving a view on how a risk is likely to play out over the intended investment timeframe. The assessment highlights the both the potential impact and the likelihood of occurrence.
Along side risks, such as the departure of key personnel, we also identify potential challenges to the investment thesis, such a lack of cloud hosting capacity or probable difficulty in meeting a product release schedule. For both risks and challenges we articulate the value at stake and options to mitigate, giving an indication of effort, time and cost to resolve.
Value creation as standard
In almost all our due diligence work we come across aspects of the target's technology ecosystem that could be improved to deliver greater EBITDA or shift the valuation multiple at exit. Such opportunities range from adjusting the mix of skills and seniority of roles, to redeveloping proprietary technology to align with market consolidation trends for the next investor.
We report on these opportunities as standard, articulating options, risks, costs and ROI.
03. Digital transformation to tech-enabled service delivery
Technology and operations strategies to achieve tech-enablement
We author technology strategies for portfolio companies to implement tech-enabled service delivery. Our strategies balance the short-term rewards of implementation, the later impact on Enterprise Value at exit, and the risk of revenue loss due to service interruption. They assess components of the Target Operating Model to identify the current efficiency in operational processes and the benefits of introducing technology to fulfil part or all of the process outcome.
We articulate the optimal technology solutions (impact, cost and ROI), the best approach to implementation, and register key risks and challenges with associated mitigation options.
The core technologies of tech-enablement are CRM and ERP systems, which can be implemented using third-party solutions, developing proprietary systems, or a combination of both.
Implementing third-party solutions is a trade-off between customising the technology and changing the operational processes to suit the presets of the technology. Customisation and process redesign both require investment and both present risks to service continuity. Most organisations that have advanced technology enablement with third-party systems have heavily customised the vendor solutions (which they are designed to enable).
In esoteric services there is an advantage to developing proprietary technology because the time and cost of adapting third-party solutions often gives a poor ROI.
We have not seen any negative impact on valuations due to high levels of customisation – it is a necessary cost of both third-party and proprietary technology for the foreseeable future. Nor have we seen a market pricing that differentiates between the main vendors such as Sage, Microsoft or Oracle. We have seen that having a single view of the customer, which such systems can deliver, reduces deal friction and, in some cases, increases the valuation multiple.
Reducing cost of technology operations
Our approach to cost reduction is to focus on the core technology-related levers of the company’s Free Cash Flow.
Renegotiating supplier contracts, moderating cloud consumption costs and rationalising the product portfolio can all be achieved within 6 months without additional investment. Introducing AI to improve discrete operational processes does require investment but can be implemented and delivering a positive ROI within months.
There are also key longer-term actions, notably changing processes and infrastructure of Customer Support and Engineering. These require materially higher effort and upfront investment, and take longer to deliver.
As with all of our work, we deliver fully costed recommendations that consider time and risk to implement.
04. Operations due diligence of tech-enabled businesses
Maturity of tech-enabled service delivery
We assess the maturity of tech-enabled service delivery in portfolio companies by reviewing the level of technology and human intervention in three core operational journeys: Lead to Cash, Trouble to Resolve, and Concept to Market (service feature development). These journeys are common across all industries.
Lead to Cash is the customer journey from enquiry through purchasing, service delivery (including provisioning by the company to deliver the service) to reporting, invoicing and payment. Tech-enablement in this journey increases process efficiency, resulting in increased EBITDA and shorter service completion times. It also increases quality and consistency of service delivery, resulting in reduced customer churn and ultimately lower cost of customer retention. Implementing advance service automation in this journey has the greatest impact on EBITDA.
Trouble to Resolve is the customer services journey, from when a customer seeks to find an answer to their problem, through to that problem being resolved to their satisfaction. With recent advances in customer service SaaS, most notably embedded Generative AI, the customer service can be highly automated whilst ensuring (an indeed increasing) customer satisfaction. Automation is not a replacement – input from human service agents will always be required for difficult issues, but at very reduced levels. The investor returns from automating this journey tend to come later in the investment timeframe, with sustainable increases in EBITDA arising from increased customer loyalty and with a clear single view of the customer contributing to the valuation multiple.
Concept to Market is not a customer journey, but the internal process of developing service features that ultimately benefit service delivery to the customer. High levels of automation tend to reduce time to market and increase utility, and thus improve ROI. But the main benefit of advanced automation in this operational process is a shift in valuation multiple at exit.
Target operating model
We assess the target operating model by investigating:
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Operational processes – how the target achieves its EBITDA across the entire range of activities including core revenue generation, Finance, HR, Procurement and customer services.
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Service delivery model – the structure of the organisation, outsourcing and partnerships that delivers the core services.
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Technology – all systems from front line to back-office.
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People – roles, responsibilities, utilisation, efficacy, skills, process activities and retention.
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Management insights – what is reported and measured, and how the data is gathered and utilised.
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Governance – risk management, controls, communications and regulatory compliance.
