Impactful AI
Insights by Peter Watson.
I’m determined to avoid talking too much more about the forthcoming Budget – for what it is worth we suspect that business will largely be left alone and are not expecting any significant change to the Capital Gains tax regime above what has already been announced. So, as a distraction I had the pleasure of attending a breakfast seminar courtesy of Investment Quorum looking at the impact of AI on financial planning.
AI is clearly a hot area of M&A, with many companies trying to ascertain how best to incorporate this into their business models.
The speaker, Ruth Handcock OBE, CEO of Octopus Money, gave an excellent talk. Aside from her very impressive CV, her insights into their use of AI were enlightening. In assessing the impact of AI on a business, clearly there are process issues that can be addressed (mostly via Agentic AI) often to reduce cost, but a key aim was to use AI to “delight” a customer. The example given was to serve up relevant information even before a customer call was answered, anticipating if possible the reasons for the call so that resolution is very quick. A clear positive for the customer! It seems a good principle to have in mind when looking to establish use cases in your business.
At an evening dinner the same day (note to waistline!) with other Corporate Financiers, the topic of AI came up again. In a discussion about the large language models (LLMs), that drive Co-Pilot and ChatGPT etc, it was agreed that their use for “number crunching” was much less successful than for more word-driven applications.
Overall, my takeaways were:
- Use AI each day
- Ensure good data quality (rubbish in = rubbish out)
- Experiment, but before investment, ensure a good use case
- Use AI to delight customers, not just to reduce costs
- Beware reliance on LLMs – especially for numbers
The ability of a business to harness AI is clearly a valuable aspect that will be reflected in future multiples paid, so it is an important part of sale preparation.
Last month we published the latest version of our M&A report for the UK software and IT services industry, which looks at recent M&A trends, notable deals and AI-driven investment. To request your free copy simply reply back to our newsletter email or complete this form: www.prismcorporatebroking.com/report