“We marveled at our own magnificence as we gave birth to AI…” — Quote from The Matrix (1999)
The world is currently consumed by chatter about AI. And Private Equity (PE) is no different. For PE, where pressures to generate value in a short timeframe are already intense, AI has added further complication to the myriad of options and pitfalls being discussed. PE professionals are urged by their investors and peers to select the right platforms and tools to capitalize on AI’s promise. But what is the best approach for PE firms when it comes to leveraging AI?
Welcome to the AI Jungle
There is no escaping the AI conversations and options that seem to multiply each day. Everything seems new, with limited long-term case studies to rely on. It’s a jungle that has sprung up overnight. The key to getting through this jungle is to have a reliable map and an effective tool for cutting through the branches.
In this case, the map is a road map for the things to test and accomplish — milestones. And the tool to cut through the branches is an effective selection rubric.
Milestones need to build on top of one another. The foundational milestone is always to get the process and the data right. These don’t have to be perfect, but they should be enough to start producing directionally correct outputs. Then further milestones to produce more accuracy through additional complexity can be layered on.
A fair selection rubric can align expectations, measure meaningful progress, and mitigate a propensity to chase shiny things. Separating AI tools on the rubric by their use case, rather than lumping all AI into one, is especially important. A chat bot may have a substantially faster on-ramp than a decision-intelligence tool. But the decision-intelligence tool could have outsized value creation potential compared with a chat bot.
AI for AI’s Sake is a Mistake
One easy way to get lost is to think of AI in a standalone way. Rather, AI should be thought of as a vessel to enhance an existing goal. Just as facial recognition AI enhanced security, and large language models enhanced customer service, AI can enhance PE’s ultimate goal — portfolio value creation — in various ways.
Better governance? There’s an AI for that. Faster cost savings? There’s an AI for that. Each PE firm, and even each portfolio company within a PE firm, likely has an existing strategy for how to maximize value. AI will be able to supercharge those strategies, or even help to unblock strategies that were sidelined due to prior constraints such as budget.
Super Cooper
Cooper AI is the only AI platform available today focused specifically on PE portfolio company value enhancement. It emulates the PE mindset around driving EBITDA improvement through operational best practices. It ingests, cleanses, and analyzes enterprise data to continuously monitor improvement opportunities. As opportunities surface, they are prioritized and presented to C-Suite management for decision-making. It is a decision-enablement tool for enterprise leaders that is ultimately a value-acceleration tool for PE professionals.
Cooper starts with a data capability assessment. For good decisions to surface, decent data must exist in the right systems, and decent data collection processes must be in place. Cooper provides a grade on general AI-readiness as well as simple steps on how to immediately improve output. This data capability assessment, completed in 1–2 weeks, is a useful foundational starting point for any AI platform that the enterprise wishes to explore.
With Cooper, PE professionals have an AI tool that is fit-for-purpose to supercharge their existing value-creation goal. The AI jungle can become the AI garden, as data is pruned and continuous visibility into opportunities is set. And those explorers that harness the power of AI now will be in position to reap the benefits of the New World.
