Global business and technology consulting firm West Monroe recently published its 2025 Future of PE Report. It focuses on five key trends, from tech-driven growth to AI-powered investments. However, one overarching theme caught our attention:
PE sponsors are “going all-in” with data and digital transformation as the main way to create value.
We couldn’t agree more. We’ve seen the advantages of a data-driven shift firsthand as more PE firms seek data solutions for their portfolio companies. With stronger analytics at their fingertips, investors can discover new revenue growth opportunities and identify operational inefficiencies — all to remain competitive and expand margins.
Historically, firms haven’t had to worry much about their portcos’ data and analytics strategies. But times are changing — fast. Exploring how their data can create additional value is a strategic imperative. No longer is robust data a “nice-to-have” but rather an essential competitive element.
Here’s our take on the Future of BI report — and what private equity firms should pay most attention to this year.
The Big Picture: 2025 Will Be a Strong Year for PE
Interest rates are dropping, M&A is picking up post-election, and there’s a lot of opportunity on the table. However, the firms that will win the biggest are the ones using data analytics and AI the right way.
According to the report, here are five things to consider this year:
- Data needs to drive every decision. Whether you’re evaluating deals or managing portfolio companies, you can’t rely on gut feelings anymore. You need hard numbers and analytics backing every move.
We have a lot more to say on this topic — it’s what we do and what we are passionate about. But for now we’ll add that we’re excited this message is gaining momentum. - AI is no longer optional. You need it to spot good deals, manage risk, and keep up with regulations. So, love it or hate it, AI tech has gotten good enough to where using it can sharpen your competitive edge.
- Global talent centers are becoming crucial. They’re not just back offices anymore — they’re innovation hubs that let you operate at scale and test new tech efficiently.
- Industry specialization is paying off. The most successful firms are building deep expertise in specific sectors and using that knowledge to drive digital transformation across their portfolio companies.
- Market conditions are favorable. Between lower interest rates and improved business sentiment since 2024, pipelines should be strong. But you need the right tech and processes in place to move quickly when opportunities arise.
The bottom line is if you want to stay competitive, you need to embrace AI and data analytics across your entire operation — from deal sourcing to portfolio management. The tools are there. It’s just a matter of implementing them effectively. While it may be hard to know where to start, we offer up some ideas in conjunction with the report’s To Do list.
Your PE Firm’s To-Do List When It Comes to Data
The report outlines four ways to start using data in your decision-making:
- Develop data-driven value creation strategies that encourage innovation
- Use data to inform technology infrastructure investments
- Implement AI for operational improvements
- Monitor market trends in real time
There’s no doubt incorporating AI into your strategies and operations will help you keep pace with your competitors. However, since we believe data-driven decision-making is revolutionizing modern business, we’d like to expand on the directives involving data specifically, and give you more tangible ideas for shifting to a data-driven culture.
Start by implementing a core data platform across your portfolio companies to identify inefficiencies and uncover value creation opportunities. This foundation enables real-time dashboards that monitor key processes throughout the value chain — from tracking production in manufacturing companies to monitoring project progression in professional services firms. These dashboards allow companies to pinpoint exactly where inefficiencies are impacting margins and financial performance.
The real power comes from using these platforms to monitor strategy effectiveness in real-time as market conditions evolve. Without automated systems showing performance through defined metrics and leading indicators, it’s challenging to gauge how strategies are performing and when adjustments are needed.
For example, if you’ve targeted a specific customer segment for 2025, your dashboards might show that this segment isn’t as profitable as projected, allowing you to adjust course quickly.
Finally, whether you’re ready to invest in AI or not, it’s important to lay the groundwork now by building a modern data platform and beginning the process of cleansing, defining, and modeling data. This foundation unlocks valuable analytics through dashboards along the way, creating a system where successful initiatives at one portfolio company can be quickly understood and adopted by others in your portfolio.
Looking Ahead: Your Strong Data Foundation
As West Monroe’s report indicates, evolution in the private equity space isn’t slowing down anytime soon. Portfolio companies that establish strong data foundations now will be better positioned to capitalize on both current opportunities and future tech advancements.
Whether you’re already a data-driven PE firm or looking to be one, we have resources to help you achieve your goals.
- Download our eBook, The Dashboard Effect, which details how business intelligence and effective dashboard reporting can be powerful tools for growth and profitability while also supporting a culture of accountability, transparency, and job ownership.
- Subscribe to our podcast where we host conversations on data analytics, business intelligence, and data driven practices for private equity and the midmarket.
- Check out our Insights page that’s always being updated.
We’re always sharing our thoughts, ideas, and advice so your company knows just how to put your data to work.