Software Buyouts Aren’t Safe Anymore: What AI Disruption Means for PE Value Creation — and Why Talent Is the Real Bottleneck
For more than a decade, private equity treated software as the most reliable asset class in buyouts. Predictable revenue. Scalable margins. Durable competitive moats. The thesis was simple: acquire, optimize, compound, exit.
That assumption is now under pressure.
AI isn’t just creating new software companies — it’s rewriting the competitive dynamics of existing ones. And for PE investors sitting on ERP, CRM, and enterprise software assets, the implication is urgent: owning the software is no longer enough. Value creation now depends on how quickly portfolio companies can re-engineer their technology stacks, embed AI into core workflows, and outpace competitors who are doing the same thing.
But here’s the part that doesn’t get enough attention in the boardroom: none of that happens without the right people.
The Structural Shift Sponsors Can’t Ignore
Generative AI is lowering the barriers to feature parity across SaaS and enterprise platforms faster than most underwriting models anticipated. Pricing power is weakening as AI-native competitors emerge. Technology cycles are now outpacing typical PE hold periods.
What used to be a five-year value creation runway is compressing into 18 to 24 months.
For portfolio companies running Microsoft Dynamics 365 or NetSuite — platforms that sit at the operational core of mid-market and enterprise businesses — this compression creates a specific kind of pressure. These aren’t systems you can rip and replace on a whim. They’re deeply embedded in finance, supply chain, manufacturing, and customer operations. Re-engineering them to leverage AI capabilities requires implementation talent that understands both the platform architecture and the business processes underneath it.
That talent market is brutally thin.
Three Execution Gaps PE Firms Are Facing Right Now
1. The Technology Diligence Gap
Traditional commercial and financial diligence doesn’t capture AI disruption risk at the technology layer. Sponsors are increasingly asking: How defensible is this platform? How quickly can we integrate AI capabilities? Do we have the technical leadership to execute? Most diligence teams aren’t equipped to answer those questions — especially when the answers depend on a talent market they’ve never mapped.
2. The Value Creation Gap
Cost optimization and pricing strategy used to be the playbook. That’s no longer sufficient. Portfolio companies need to be technically repositioned — and that means hiring architects, functional consultants, technical leads, and project managers who can execute complex ERP transformations while the business keeps running. This isn’t a job board problem. The people who can do this work at scale aren’t actively looking. They’re embedded in existing engagements, and reaching them requires deep ecosystem relationships.
3. The Time Horizon Compression
Competitive threats now emerge within months, not years. When a portfolio company needs to modernize its Dynamics 365 environment or migrate a NetSuite instance to take advantage of AI-driven automation, the clock starts the day the deal closes. Every month spent searching for the right implementation leader or technical architect is a month of value creation left on the table.
Where the Talent Execution Layer Comes In
I’ve spent 25+ years recruiting exclusively in the Microsoft Dynamics 365 and NetSuite ecosystems. My firm, DynamicsFocus, works almost exclusively with PE/VC-backed companies, professional services consulting firms, and enterprise end-users who need specialized ERP talent — fast, and with precision.
Here’s what I see from the front lines of this market:
The talent that drives AI-enabled ERP transformation doesn’t respond to job postings. These are senior architects, D365 F&O and CE consultants, NetSuite developers, and implementation directors who are already engaged on complex projects. They’re passive candidates, and accessing them requires years of relationship capital within the partner channel and end-user community.
Speed-to-hire is now a value creation metric. When a PE operating partner calls us, they’re not just filling a role. They’re trying to close an execution gap that directly impacts their investment thesis. A 90-day vacancy in a key technical leadership role during a platform modernization can derail an entire transformation timeline.
Platform expertise is non-negotiable. Generalist recruiters treat Dynamics 365 and NetSuite roles like any other IT position. They’re not. These platforms have their own certification paths, implementation methodologies, partner ecosystems, and talent pipelines. Mis-hires in this space don’t just cost money — they cost momentum, which PE firms can’t afford to lose.
What Sponsors Should Be Thinking About
If you’re a PE operating partner, portfolio company CEO, or VP of Talent at a sponsor-backed business, here’s what I’d encourage you to consider:
Treat talent strategy as part of your technology diligence. Before the deal closes, map the talent you’ll need to execute your value creation plan. Identify the roles that are hardest to fill and start building pipeline early.
Reframe value creation from margin expansion to capability expansion. The firms generating the strongest returns aren’t just cutting costs — they’re investing in the technical leadership that can modernize platforms, automate workflows, and integrate AI capabilities into day-to-day operations.
Work with specialists who understand your platforms. The ERP talent market is opaque, fragmented, and fiercely competitive. A recruiter who doesn’t understand the difference between D365 Finance & Operations and Business Central, or between NetSuite SuiteCommerce and SuiteScript, is going to waste your time and your money.
Move fast. The competitive window for AI-driven transformation is narrow. The firms that secure the right talent first will create the most value — and the ones that don’t will be explaining to their LPs why the exit multiple came in below plan.
The Bottom Line
AI is reshaping what it means to own and operate a software-driven business. For PE sponsors, the strategic response can’t stop at the investment thesis. It has to extend to the execution layer — and that means having the right people in the right roles, on the right platforms, at the right time.
That’s the gap we fill every day at DynamicsFocus. If you’re navigating an ERP transformation inside a portfolio company and need specialized Dynamics 365 or NetSuite talent, I’d welcome the conversation.
Bryan Ray is the Founder and Managing Partner of DynamicsFocus LLC, a boutique executive search firm specializing exclusively in Microsoft Dynamics 365 and NetSuite talent acquisition for PE/VC-backed companies, professional services consulting firms, and enterprise end-users across North America and Europe.