As a private equity (PE) firm, your business has a vested interest in the success of the portfolio companies under its management, as it’s how you generate value for your shareholders in turn.
And to achieve this goal, PE firms like yours are responsible not only for managing these portfolio companies, they also have a vested interest in enhancing their growth and profitability as well.
One of the most common ways for PE firms to achieve this goal is to undertake a digital transformation for said portfolio companies, providing them with an IT infrastructure that can support their growth.
But choosing just any ERP software to implement in your portfolio companies is not enough; you need to find the right fit for their business needs.
And given that they’re destined for rapid growth in their organisational size and capabilities (should all go well), your portfolio companies will have a particular set of business needs that the software solution must be able to meet.
This is why Oracle NetSuite has become a leading choice of solution for PE firms like yours, as the true cloud ERP software offers various features that suit their business needs of their portfolio companies.
Let’s take a look at how Oracle NetSuite resolves the specific needs of your PE firm, as well as the portfolio companies it manages.
A Comprehensive Set Of Financial Management Capabilities
It’s not uncommon for the portfolio companies your PE firm is investing in to manage their financials with basic accounting software, or even through Excel spreadsheets.
Therefore, they’ll need a solution that provides them with a complete set of financial capabilities – such as financial management, item management, and automation of procure-to-pay and order-to-cash – to provide a firm foundation for future growth.
As an ERP software, Oracle NetSuite provides a full set of financial management capabilities such as accounting, billing management, and financial planning amongst many others.
Therefore, your portfolio companies are sure to get the financial foundation it needs with NetSuite.
In addition, the true cloud ERP software comes with everything your PE firm needs to establish efficient processes and gain full visibility into the operations of your portfolio companies.
These include:
- End-to-end tracking and reporting of the lifecycles of fixed assets, from acquisition to depreciation, to retirement
- Automated revenue recognition which meets accounting standards, with flexible scheduling
- Expense allocations per weighted formula, which can be used as needed or scheduled on a regular basis. Dashboard reminders will notify you when active allocation schedules need to be processed
Scalability And Flexibility In Line With Business Growth
A true cloud ERP software like Oracle NetSuite has a distinct advantage over on-premise alternatives. That’s because the latter usually involves high levels of capital expenditure (CAPEX).
This is down to the fact that on-premise IT environments are time- and resource-intensive, requiring manpower in your portfolio companies to carry out regular maintenance.
In addition, an on-premise ERP software is usually not easily scalable. This can be especially detrimental for your portfolio companies, which will see rapid business growth as a result of your PE firm’s investments.
With NetSuite, its subscription model offers greater flexibility for the budget of your portfolio companies, as it allows them to consume its services on an as-needed basis.
And your portfolio companies won’t have to worry about upgrading to another solution as they grow either, as the true cloud architecture of NetSuite allows it to scale and provide additional functionality in line with their growth rate.
The recurring monthly subscription fees of Oracle NetSuite also aligns more closely with the portfolio revenue and investment cycles of your PE firm, providing much-needed predictability to the cash flow of your business.
Real-time Visibility On Two Levels
To make the strategic business decisions in a timely manner, your PE firm and its portfolio companies need a solution that provides the necessary business intelligence (BI) in real-time.
And that’s what Oracle NetSuite brings to the table on both levels; built-in, real-time dashboards that provide reporting and analysis across all of the processes integrated into the true cloud ERP software across your entire portfolio.
This empowers your portfolio companies with the real-time visibility to identify issues, trends and opportunities within their processes, and drill down to specific transactions so they can take the necessary action immediately.
it also allows your PE firm to easily access real-time cash positions for each of your portfolio companies, and create financial reports that display the relevant data and key performance indicators (KPIs), which helps you determine the growth rate for each of your portfolio companies.
Ensures Compliance With Regulations
Shareholders today are sophisticated enough to demand that the portfolio companies under your PE firm adhere to local regulatory requirements, so that their investments will not fall afoul of legal liabilities.
To ensure that each of your portfolio companies are remaining in operational compliance, real-time reporting and monitoring of their processes is necessary.
An ERP software like Oracle NetSuite greatly simplifies compliance with multiple standards across the world, including Generally Accepted Accounting Practices (GAAP).
To achieve this, it comes with the following features:
- A powerful rule-driven engine that produces financial reporting in accordance with multiple accounting standards, using multi-book accounting capabilities
- Pre-built tax filing and reporting tools that are country-specific
- Customisable roles with permissions that support segregation of duties
- Audit trail visibility into detailed transaction history, reports and saved searches
And because PE firms like yours usually invest in portfolio companies within the same industry, you can benefit from scaling by introducing Oracle NetSuite – along with the same set of dashboards and KPIs – to optimise compliance across the board.
Enables Multi-national Portfolio Management
If your PE firm maintains a portfolio of companies in more than one country, managing them is made more complicated with the different business needs in each country.
This means your PE firm will need a solution that can support the management of your portfolio companies overseas.
And with Oracle NetSuite OneWorld, you get a platform with the necessary functionalities to enable just that.
It comes with a multi-currency management feature that supports 190 currencies and exchanges rates along with various payment options, allowing your PE firm’s finance function to consolidate all your financial reporting across your portfolio companies in different countries.
The configurable tax engine of NetSuite OneWorld also ensures that your portfolio companies comply with the regulatory requirements of the country they’re individually located in, and the cloud ERP software also supports 27 languages across the world.
Thus, with NetSuite OneWorld, your PE firm will be equipped with the tools it needs to manage an international set of portfolio companies.
Oracle NetSuite Is The ERP Software Of Choice For Your PE Firm
Thanks to its true cloud architecture, there’s no wonder that Oracle NetSuite is the ideal choice of ERP software for PE firms such as yours.
It provides both your PE firm and its portfolio companies with a comprehensive set of features and functionalities, which meet two different sets of financial management needs.
The easy scalability of Oracle NetSuite is also well-suited for the projected growth of your portfolio companies. It also provides the visibility you need into the processes of your PE firm’s portfolio companies, allowing you to immediately resolve individual issues in each company.
Last but not least, with the additional functionalities of Oracle NetSuite OneWorld, your PE firm can effectively go international with its portfolio, allowing you to manage portfolio companies in multiple countries with ease.
But there are more ways in which a true cloud ERP software like Oracle NetSuite can standarise the portfolio operations of your PE firm. To learn more about this, click the image below.
