An entire pig is skewered and rotated over an open flame as lechon, a Philippine specialty, is grilled for software engineers at InRiver, a commercially-built data company.
That was the sweet prize for winning a generative AI coding contest hosted by Inriver's owner, private equity firm Thomas H. Lee, and it's one of the ways the Boston-based buyout firm was able to deploy its generative AI coding assistant across its portfolio of mid-sized companies.
“As someone who owns a portfolio of companies, you have to be smart about how you bring in new capabilities,” Mark Benacquista, managing director of THL's Strategic Resources Group, told Business Insider. The 20-person SRG is responsible for working with the portfolio's leadership teams to provide operational and technical support.
“Sometimes you have to do that, but if you approach it as a cost-cutting initiative you'll meet resistance. If you approach it as an empowerment initiative you'll meet acceptance,” Benakista said.
Mark Benacquista, Managing Director, THL THL
Wall Street PE firms are eager to benefit from genAI, which promises to make workers more productive and save time. THL decided to see for itself how the technology could impact its portfolio, which consists of companies in the technology, financial services, and healthcare industries. After rolling out Github Copilot, an AI coding assistant that helps write and suggest code, to 12 of its portfolio companies earlier this year, THL found that engineers, overall, were 10% to 30% more productive using Copilot than doing the same tasks manually.
The engineering team used the coding assistant for a variety of tasks, including writing code, creating code documentation, translating between languages, explaining to others what a particular chunk of code did, etc. The company recorded the time it took with AI and manually, and made baseline assumptions about the percentage of each task that contributed to an engineer's overall workload.
Encouraged by the software developers' work, Benakista said THL is looking to integrate generative AI across its portfolio companies, from sales and marketing to customer service. PE has earned a reputation for cutting costs, sometimes at the expense of jobs, but that's the opposite of what THL is aiming for, Benakista said.
The goal is to accelerate software development and enable portfolio companies to do more work with the same amount of resources. Put simply, “if your team is 20% more productive, all else being equal, you're going to be 20% better at achieving your product roadmap,” Alex Seibel, a research analyst at THL who oversees the business side of SRG's work, told BI.
“Just because this is easier to do doesn't mean there will be fewer software developers,” Seibel said. “In fact, it may even mean there will be more software developers in the future,” Seibel said, because the pace of development means that applications may be updated monthly or weekly, rather than every few years.
On the Ground: Convincing Skeptics, Competing, and Pig Parties
Jagjit Singh, a director at SRG with an engineering background, travels the globe to help portfolio companies become tech-savvy. He travels thousands of miles between the firm's Boston base and India, the Netherlands, and the Philippines. His two tactics for convincing skeptical engineers are gamification and a little tough love.
“If you don't adapt, it's here. I mean, the bear is already here. It's not going to go away if you turn a blind eye,” is one of the messages Singh has to his tech team. He also insists that the introduction of the generative AI coding assistant is not a cost-cutting measure, but a way to improve productivity. No developers have been laid off as part of this effort to cut costs, he added.
A little friendly competition with a juicy incentive also helps; Singh often pits two engineering teams against each other to see who can win a prize, or “badge of honor.” Getting to know the participants and what's important to them is key to motivating them. Singh says recent prizes have included the latest Apple Watch, an Apple TV, and even the aforementioned pig roast party.
“It's about pride, it's not about money. It's about giving lechon to someone. It's a big deal,” Singh said of the pork dish.
Coding Assistant is just the beginning for THL. The company is already thinking through other ways AI can power the business, such as sorting through unwieldy data for teams responsible for sales and pricing, Sabel said. Benakista added that there are other opportunities for customer service and internal operations teams as well.
The pipeline of AI tools is getting longer as portfolio companies see early success themselves. For SRG, it's now about educating its portfolio companies about which problems AI can and can't solve. “We don't want to throw AI at every problem,” Benaquista says.
“This isn't free,” Benakista said. “It's increasing the cost structure in some cases. We believe it will lead to increased productivity that will trickle down elsewhere.”
