Why You Should Manage your Private Equity Portfolio as One Organization

Managing your private equity portfolio as if it were one organization enables growth and benefits the investors behind them. Let’s look at five reasons private equity firms should consider championing ERP throughout their portfolios.
  1. Easier Exits
    If there’s one reason that should get PE firms’ attention, it’s this. A private equity investment is all about the exit; it’s the moment when all of the hard work pays off.

  2. Standardized Business Processes Portfolio-Wide
    The benefits of standardization are clear in a single organization. When managing numerous organizations at once, standardization becomes even more compelling.

“A comprehensive ERP system increases the accuracy, efficiency and speed of reporting, and provides a holistic snapshot of a PE firm’s entire portfolio.”

  1. Redused Risk
    As mentioned earlier, not having an ERP system makes it monumentally difficult for PE firms to stay on top of risk, perhaps their most important role. They’re responsible for ensuring the future value of the investments they’re safeguarding, and as such, they need a clear view of the risk landscape.
    ERP provides this in a number of ways:

  • Enterprise grade security
    good ERP systems—especially those that run in the cloud—offer out-of-the-box, enterprise-grade data security.

  • Acces to accurate data
    With ERP, PE firms can rely on a single, authoritative data source, providing assurances that the data they’re seeing is accurate and timely

  • Role based Access
    These solutions also provide role-based system access to ensure that employees can safely access data and functionality crucial to their position with pre-defined permissions.

  • More time for monitoring and tweaking business
    With today’s cloud-based ERP systems, IT maintenance is actually reduced by transitioning from simple software and spreadsheets. With the vendor managing IT issues, PE firms and their portfolio companies are freed up to spend more time monitoring and tweaking the business.

  • Ease of Governance and Compliance efforts
    The combination of accurate and timely data, holistic visibility, builtin data security and freed resources also eases governance and compliance efforts, and the generation of required certificates.

  1. Rapid Expansion
    The ability to scale is often the motivating force behind ERP adoption, and there’s a reason for that.
    ERP software provides a foundation for managing growth. An organization can easily manage multiple product lines, flex with changing supply chain conditions and benefit from faster and cleaner onboarding of acquisitions or new subsidiaries.

  1. Reduced Financial Close Period and Audit Preparation
    ERP systems offer financial staff real-time data to work with, minus the detective work.
    A unified reporting structure across the portfolio simplifies this process, and pre-built reports slashes the time required to assemble and format the necessary data. Eliminating manual data entry further slashes closing times.

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