Investors, shareholders and other stakeholders always want to know which technological innovations will boost returns on investment and what the right mix of people versus machines is to carry out core tasks.

As companies digitize faster, they’ll need to examine the strategic value of their technology investments. At the core of these considerations is tech value creation – using technology to increase a company’s value – be it increased revenue, higher returns for shareholders or better customer experiences.

“Tech value creation serves two incentives: to help deliver returns to shareholders and better serve customers,” said Arvindh Kumar, Partner and Co-Head of EQT’s global technology team.

Smarter Storage Units

An example of this is EQT’s portfolio company Storable, an Austin-based technology provider for the self-storage industry. The company helps self-storage companies run their businesses by providing facility management software, an access control system, insurance, customer management, and payment capabilities.

“It makes the operator more productive because they use technology to process you as a customer, to find you, to charge you,” said Kumar on Storable. “They also have a marketplace, so it's easier for you as a customer to find a unit near you,” he added, noting that the two-sided marketplace capability fosters value for the business as well as easy customer experiences.

While companies have always had to grapple with which technology innovations best suit their plans, the pace of fresh game-changing upgrades has never been greater. A recent Gartner survey of 2,400 technology leaders found that of the critical outcomes for upgrading technology, 72 percent of respondents said generating revenue, 70 percent said excelling in customer experience, and 55 percent identified improving margins as key goals.

Software tools as value drivers

Smart software allows companies to work more efficiently, reaching customers and prospects faster while developing and testing new products and features at pace.

“Software tools are inherently a massive productivity tool for the end customers,” said Kumar. “It could be a way you can market to your customers easier. You can develop software products a lot faster, test them faster, and develop lines of code much faster.”

In another example, Billtrust, a New Jersey-based business-to-business payments company that’s backed by EQT, offers an automated accounts receivable solution. Its toolset simplifies the payment process between companies and suppliers through automated payment processing, credit, invoicing and enterprise resource planning integration, a fancy way of describing the software needed to run a company.

“Billtrust is a technology solution that helps businesses electronically interact with each other to get paid faster, to know who you’re paying, to have an actual agreement on what you’re going to get paid,” said Kumar.

Looking to the future

AI’s rapid advance and scaling reinforce how companies have to keep reevaluating their tech value creation approach. Research by PwC found 70 percent of CEOs anticipate that generative AI will “significantly change the way their company creates, delivers, and captures value in the next three years.”

EQT has already been using AI and machine learning to inform its investment decisions for many years. Motherbrain, an AI platform developed by EQT Ventures (EQT’s venture capital arm), analyzes data to identify and solve problems, including identifying early indicators for success that can improve growth and profitability at EQT portfolio companies.

The rise of AI is one component of a bigger story about how technology is increasingly being used to create value and drive business growth. Of course, every technology decision will need to be evaluated on its merits based on a data-driven approach.

“For the most part, AI can be a value generator,” says Kumar. “It’s either going to make your developers, your engineers, more productive, and/or make your products more easily usable, faster, look better, which should generate more money for you as a company.”