Managing portfolios for greater profitability and growth requires accurate, timely financial and operations data to make real-time decisions. Private equity (PE) firms today face a series of competitive, economic, political and technological challenges that can slow down their growth, however. Overcoming these challenges to keep growing requires a constant focus on how to attain greater agility, speed, and scale. At the center of many PE’s competitive strengths are how they are using real-time data to control their portfolios better while gaining visibility across all operations. Keeping the competitive momentum going forward across all portfolios requires an ERP system capable of providing real-time data from diverse global operations, including the streamlining of financial reporting, making complex reporting simple.
Consolidating financial statements, comparing the operational performance of each production center using analytics, bringing new plants online quickly, standardizing processes and procedures across portfolio companies and orchestrating portfolio-wide new product introductions are a few of the many needs Private Equity investors have today. Add to this the turbulent, unpredictable nature of competition and the need for accurate, real-time data for making smart, profitable decisions, and the value of an ERP system that can scale and support real-time decision making becomes clear.
Private Equity Firms Gain Greater Control And Visibility That Drives Profitability with ERP Software
Having an ERP system that can scale end-to-end across an entire portfolio makes it possible to measure progress towards cost, growth and profitability goals in real-time and make quicker, more informed decisions. With analytics, Business Intelligence (BI) and Manufacturing Intelligence integrated at the platform level, IQMS’ flagship EnterpriseIQ manufacturing ERP system delivers the data, insights, and intelligence needed to excel at managing a portfolio.
Adding additional companies and bringing new plants online is a popular Private Equity strategy for increasing portfolio-wide profitability. Planning and leading profitable growth is easier to accomplish when an ERP system can scale end-to-end and provide the visibility and control needed. Providing real-time data in dashboards and scorecards accessible from any mobile device improves the accuracy and speed of decision making, contributing to greater operations control and higher profitability.
One of the most vital aspects of managing a portfolio is the continual improvement and standardization of processes and procedures across all holdings or companies. Nearly all PE firms combine change management and continual system-level improvements to increase the accuracy, efficiency, speed, and scale of standardized processes and procedures. Their investments in this area are reflected in how successful new product development and introductions are when orchestrated across an entire portfolio. The greater the standardization of processes across a portfolio, the greater the visibility, control and potential to drive higher profits.
An integral part of any portfolio’s financial success is the quality of data and insight its systems provide daily to enable timely, effective decisions. Based on conversations with PE firms here are the top 10 most valuable features they look for in an ERP system:
- PE firms highly value a fully integrated ERP system capable of scaling end-to-end across global manufacturing operations, providing a scalable, real-time system of record. Getting out from under the weight of expensive, time-consuming and often unreliable integrations across third-party systems is a major goal PE firms share. That’s why having an ERP system that scales end-to-end across a portfolio is so highly valued today. Providing greater control portfolio-wide by increasing the visibility into every aspect of operations is a must-have across all PE firms. Providing a single, scalable system of record that can flex to PE firm’s needs is one of the primary design goals of IQMS’ EnterpriseIQ ERP Suite.
- The ability to have greater financial visibility into multisite operations globally with the flexibility of adding in new businesses and operations as they are acquired. Multisite financial reporting is a must-have for any PE firm looking to scale their portfolio out with acquisitions and operational additions over time. ERP systems that excel at this dimension include a broad base of reports that are customizable, including the ability to create custom Key Performance Indicators (KPIs). The latest version of IQMS’ EnterpriseIQ ERP system includes in-depth multisite financial reporting and analysis. Having the visibility into how shop floor performance is driving top floor financials is essential for PE firms to excel at managing their portfolios and attain greater profitability.
- Knowing the current state of product quality across an entire portfolio and having visibility into key quality metrics and KPIs. PE firms need to have the most accurate, timely data on product quality to ensure each portfolio company is delivering the best products possible. An integrated Quality Management System (QMS) also provides supply chain visibility, track and traceability, data on compliance, and continual data on corrective actions and preventative actions. IQMS’ track record providing quality management systems that enable portfolio managers to gain greater control and visibility over every aspect of production is well known in the manufacturing industry.
- Scaling real-time production monitoring across a portfolio increases visibility into how quality, compliance and production scheduling can be improved to deliver greater profitability. Having the advantage of real-time data, many PE firms are standardizing Statistical Process Control (SPC) measurements across their portfolios. Real-time data increases shop floor efficiency by finding bottlenecks faster and enabling higher levels of inventory control accuracy and performance across all production locations.
- A portfolio’s long-term performance often reflects how accurate, scalable and efficient the platforms supporting its key enterprise systems including ERP are.For a portfolio to flex in response to new opportunities for growth, the information systems platforms supporting it must be powerful enough to support new development including API and Web Services-based integrations. When an ERP system is unified on a single end-to-end platform, increasing the scale, scope and speed of execution of new growth opportunities including mergers, acquisitions, and joint ventures become possible.
- An intuitive easily understood user interface that is customizable by users, all contributing to higher user adoption, enabling greater visibility portfolio-wide is also key. Getting to the data needed to make a decision now depends on how well-designed the user interface is for any enterprise system. PE firms are gravitating to ERP systems that provide quick, easily defined reports, dashboards, and scorecards that can scale across their entire portfolios. Propagating these results across all portfolio companies requires a user interface design that scales well.
- To excel at managing a portfolio, real-time analytics, Business Intelligence (BI) and Manufacturing Intelligence are essential. Analytics, Business Intelligence (BI), and Manufacturing Intelligence provide 360-degree visibility of supply chain, quality, production, fulfillment, and service operations. PE firms are adopting these three reporting technologies and more to streamline supply chains, increase product quality, manage forecasts and improve operations while continually streamlining processes and procedures to accomplish these operational goals.
- ERP systems that have a modular product architecture that provides PE firms the freedom to add modules and grow at their own pace. Giving PE firms the freedom to expand and select modules that meet their needs when they need them is essential for any ERP system not to become ERP systems that deliver this level of flexibility and freedom deliver competitive advantages to PE firms by increasing the accuracy, speed, and scale of data they provide. Best of all, it gets PE firms out of having to deal with best-of-breed integrations that are often costly, time-consuming and prone to delivering inaccurate data.
- Mobile real-time access to the ERP system from any browser, anywhere at any time enables real-time visibility from the shop floor to the top floor. PE firms are looking for ERP systems that provide responsive web designs that are optimized for any mobile device with a browser. Managing a portfolio often requires teams to be able to work remotely, while traveling, or while in meetings with portfolio companies. Manufacturing teams need to be able to work untethered to their desk, using mobile devices including their smartphones, tablets and lightweight laptops as they work across production and manufacturing centers.
- Maintenance and support that is indexed to customer satisfaction. The best ERP systems have maintenance and support programs designed to reduce customers’ costs while increasing satisfaction levels. Looking to reduce maintenance and support costs, PE firms are actively seeking out ERP systems that can index performance to results, further driving greater visibility and cost control into overall operations.