Operational Excellence Unlocks Portfolio Potential in Private Equity

By Henna Plit, Senior Advisor at Staria

Operational excellence has quickly become the key to success in PE-backed companies. Bain & Company’s 2024 Global PE Report reveals that a remarkable 72% of firms now see operational improvement as the top strategy for boosting returns - a significant jump from just 48% five years ago. This shift highlights how investors are currently focused on increasing value from existing assets by utilising improved processes, advanced technology, and more efficient execution. With deal volumes fluctuating and exit timelines getting longer, operational excellence is an essential path to outperforming the competition and achieving sustainable growth in portfolio companies. This article examines the concept of operational excellence within private equity. 

Data-driven value creation 

Private equity investors are increasingly focused on ensuring their portfolio companies harness advanced analytics and artificial intelligence (AI) to drive operational excellence and unlock hidden value. 

The adoption of secure, scalable data platforms enables firms to consolidate data, generate actionable insights, and make faster, more informed decisions. By leveraging predictive analytics for supply chain management, customer segmentation, and cost optimisation, PE-backed companies can achieve measurable improvements in both margins and growth rates. With the increasing sophistication of data-driven tools, individuals and organisations that emphasize analytics and technology integration are more likely to achieve enhanced returns and maintain a competitive edge, thereby providing greater value to investors. Staria’s Business Intelligence Services offer tailored support for PE-backed companies seeking to optimise reporting, business planning and analytics.  

Digital transformation and automation 

Digital transformation is at the heart of operational excellence for PE-backed companies. Investors are increasingly prioritising investments in technologies such as ERP upgrades, robotic process automation (RPA), and cloud migration to streamline operations and accelerate growth. According to a recent McKinsey report, companies that successfully implemented digital transformation initiatives can achieve up to a 30% increase in operational efficiency and significant improvements in EBITDA margins (McKinsey & Company. The case for digital reinvention). 

Robotic process automation is being used to automate repetitive tasks in finance, HR, and supply chain management, freeing up valuable resources for strategic activities. Cloud migration, meanwhile, enables greater scalability, flexibility, and cost savings, allowing companies to respond quickly to market changes and customer demands. For example, a recent case study from Deloitte highlights how a mid-market manufacturer leveraged cloud-based ERP systems to reduce operational costs by 20% and improve speed-to-market for new products. (Deloitte. Digital transformation in manufacturing: Case studies). 

By embracing digital transformation and automation, PE investors can drive measurable improvements in portfolio company performance, positioning their investments for long-term success and higher exit multiples. At Staria, we provide expert guidance on ERP upgrades, cloud migrations, and automation initiatives. Our NetSuite consulting services are designed to deliver seamless integration and increased ROI, helping PE-backed companies scale and transform with confidence. 

Tech-enabled due diligence & monitoring  

The due diligence process is undergoing a revolution as private equity and venture capital investors harness technology to gain deeper, real-time insights into potential and existing portfolio companies.  

For example, AI-driven tools can rapidly analyse vast datasets - ranging from financial records to customer feedback - identifying red flags and value-creation levers with unprecedented speed and accuracy. Scenario modelling allows investors to simulate operational changes and forecast their impact before making critical decisions. 

Ongoing portfolio monitoring has also been transformed. Cloud-based dashboards provide investors with latest visibility into key performance indicators, enabling proactive interventions. According to PwC, firms that adopt tech-enabled monitoring report faster identification of underperformance and greater agility in executing operational improvements. 

By integrating these digital tools into their due diligence and monitoring processes, PE investors can make more informed decisions, reduce risk, and accelerate value creation across their portfolios. 

Post-acquisition playbooks & rapid 100-day plans 

For private equity and venture capital investors, the period immediately following an acquisition is critical for setting the tone and trajectory of value creation. The adoption of standardised post-acquisition playbooks and rapid 100-day plans has become a best practice for driving operational improvements and accelerating integration. These structured approaches provide clear roadmaps for management teams, outlining key priorities, milestones, and accountability measures. 

A 100-day plan often targets areas such as cost optimisation, process streamlining, and revenue enhancement, while establishing the basis for longer-term transformation. Given the typically extensive list of tasks, successful implementation requires identification of key objectives, effective prioritisation, and recognition of low-hanging fruits. This process also involves dashboards and KPI monitoring. 

Cross-portfolio benchmarking is another powerful tool, enabling investors to leverage lessons learned and best practices from previous deals. By systematically applying these frameworks, PE firms can ensure consistency, reduce execution risk, and maximise value creation across their portfolios. 

Cross-border & multi-region operational strategies 

As private equity and venture capital investors expand their portfolios globally, operational excellence increasingly depends on the ability to manage cross-border and multi-region complexities. Navigating diverse regulatory environments, cultural differences, and supply chain challenges requires a strategic approach and robust technological support. According to a recent EY report, 67% of global PE firms cite operational integration across regions as a top challenge, but also a key source of competitive advantage when executed well (EY. Private Equity Global Outlook 2024). Partnering with experienced providers like Staria can help streamline financial processes and support consistent, efficient operations worldwide. Learn more about Staria’s Global accounting services for multi-entity, cross-border environments. 

Successful cross-border strategies often leverage centralised digital platforms for real-time coordination, enabling consistent performance monitoring and rapid response to local market changes. Localisation of playbooks - adapting operational frameworks to fit regional regulations and business practice helps ensure compliance and effectiveness. 

By ensuring their portfolio companies invest in technology, local expertise, and flexible operational models, PE investors can unlock growth opportunities and mitigate risks across their international portfolios.  

Conclusion 

Operational excellence has become the cornerstone of value creation for private equity and venture capital investors. As the industry evolves, those who embrace data-driven strategies, digital transformation, tech-enabled due diligence, disciplined post-acquisition playbooks, AI-powered operations and cross-border adaptability are best positioned to outperform the market. 

By prioritising these pillars, PE firms can unlock hidden value in their portfolio companies, accelerate growth, and ensure their investments are resilient and future-ready. Operational excellence is no longer optional - it’s the key to sustainable returns and successful exits in today’s dynamic investment landscape. 
 
Discover how Staria can help your portfolio companies achieve operational excellence and unlock new value by contacting our team for a tailored consultation.