Using AI and Technology to Drive Value Creation in Private Equity with Ron Ramanujam

The Private Equity Podcast, by Raw Selection

Welcome back to the Raw Selection Private Equity Podcast. Today’s guest is Ron Ramanujan, Technology Transformation Operating Partner, discussing value creation, tech transformation, AI, and cybersecurity within Private Equity.

Breakdown:

{00:30} Ron shares his background, highlighting his extensive experience in enterprise technology, data infrastructure, machine learning, and his time at BCG.

{01:28} Discussing common mistakes in private equity, Ron emphasizes that financial engineering alone is no longer sufficient. He highlights the need for early action post-acquisition, leveraging technology, and focusing on value creation from day one.

{02:55} The importance of assessing pricing models, margins, and customer experience early in the investment cycle. Ron explains how digital transformation is now a non-negotiable factor for success in private equity.

{04:51} Value creation in private equity is often overused as a term. Ron discusses the shift from traditional financial optimization to technology-driven strategies that generate real business impact.

{06:16} The role of technology in private equity investments. Ron emphasizes evaluating a target company's tech infrastructure during due diligence and ensuring early integration of digital strategies to maximize growth potential.

{08:08} Lessons learned from prior acquisitions—Ron talks about prioritizing high-value use cases, setting clear milestones, and the importance of aligning operational and technological strategies.

{09:58} The need for a structured, repeatable framework for tech integration in portfolio companies. Ron explains how operational and tech transformation must go hand in hand to drive efficiencies.

{12:22} AI’s impact on private equity—how AI-driven solutions can reduce customer churn, optimize costs, and create competitive moats for portfolio companies.

{14:08} AI trends and applications—Ron explains how generative AI is transforming businesses, highlighting its impact on productivity, customer service, and operational automation.

{16:30} The importance of AI governance and risk management. Ron discusses creating structured frameworks, setting guardrails, and ensuring responsible AI adoption without stifling innovation.

{18:25} Experimentation in AI is key—private equity firms must embrace a culture of testing, failing, and iterating to remain competitive in a rapidly evolving market.

{19:50} Playbooks for AI in private equity—Ron suggests frameworks that firms should establish at a portfolio level, including AI-driven financial reporting, operational efficiencies, and customer analytics.

{23:35} Cybersecurity in private equity—Ron warns that cybersecurity is often overlooked, yet it poses a significant existential risk to businesses. PE firms must incorporate cybersecurity assessments into due diligence.

{25:59} Emerging cybersecurity threats—Ron discusses advanced cyber threats, including internal dwellers and nation-state actors, emphasizing the need for proactive security measures.

{27:51} Balancing cybersecurity investments—Ron explains how firms can protect their assets without over-engineering security solutions, ensuring efficiency and risk mitigation.

{28:21} Ron’s reading recommendations—he shares his interest in AI, human neuroscience, and the book Why Machines Learn, which explores the evolution of AI through mathematics.

{31:09} Alex thanks Ron for his insights into AI, cybersecurity, and value creation in private equity.

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