Navigating the world of private equity, especially when it comes to technology implementations, comes with unique challenges, including streamlining operations and ensuring compliance across multiple geographies. Let’s explore how an ERP solution like NetSuite can help private equity firms overcome these hurdles, drive efficiency, and support the rapid growth of your portfolio.
Challenges Faced by Private Equity Firms Today
Tech Implementations
Private equity firms often struggle with tech implementations due to the lack of an end-to-end understanding of systems and processes. Imagine trying to optimize billing without cohesive coordination between Salesforce (SFDC) and NetSuite (NS). This is a common issue we hear from customers coming to Plative, which, if not dealt with, can lead to failures in billing or more commonly known in the IT world as Order to Cash optimizations.
Rapid Expansion Needs
Rapid expansion into new geographies is another significant challenge. Each new location brings its own set of localizations, tax compliance requirements, and other regulatory hurdles, making it crucial for firms to install a best-in-class cloud-based architecture quickly to keep up with the pace of expansion.
Health of Business Reporting
Accurate and timely reporting of key metrics like industry specific KPIs, SaaS metrics, EBITDA, and other financial and operational data is essential for making informed decisions.
However, disparate systems, too many manual touch points and lack of integration can make this reporting cumbersome and error-prone.
Consider Cohen & Co, one of the leading tax and accounting firms in the U.S. They were facing significant challenges due to an outdated on-premise Sage ERP system, which caused major delays in their monthly book closings. After implementing NetSuite’s SuiteSuccess with Plative, they reduced their month-end close from 22 business days to just 5.
How an ERP Solution Like NetSuite Can Help
Going Global
NetSuite simplifies managing worldwide subsidiaries from a single platform. It’s built to support global audit, tax, and data security requirements, making it easier to adhere to local laws while maintaining a unified system.
Automation Efficiency
Automation is key to optimizing resources. With NetSuite, firms can automate numerous back-office tasks, freeing up time for more strategic activities. Seamless integrations with other tools ensure that data flows smoothly across systems, enhancing overall efficiency.
Leveraging AI for Private Equity
With the rise of AI adoption, private equity firms can take advantage of AI solutions to help them automate routine tasks.
At Plative, we’ve built an AI solution for NetSuite that can help you with prospecting, transcribing meetings, analyzing lengthy documents, reporting on SaaS metrics, and so much more.
See how AI can transform your organization and enable your team to do more with less. Maximize your return in technology investments with the help of Plative’s expertise in private equity.
Buy and Build Strategy
When it comes to acquisitions, integrating add-ons quickly is essential. NetSuite enables firms to prepare their back-office capacity to accommodate new acquisitions seamlessly, supporting the 100-day plan crucial for successful integrations.
Rapid Scaling
Supporting organic growth is another area where NetSuite excels. By improving operations and expanding product and service offerings, NetSuite helps firms scale rapidly without hitting operational bottlenecks.
Common Use Cases for NetSuite for Private Equity
Divestitures
In scenarios where a private equity firm buys a division of a public or private company and spins it off as an independent business, NetSuite provides the tools needed to establish a standalone operation to get you up and running quickly.
Mergers
Combining multiple companies into one cohesive entity can be challenging. That’s where NetSuite’s robust integration capabilities come in, making it easier to merge systems and processes, ensuring a smooth transition.
Global Expansion
According to research by the Carne Group, private capital assets could top $21trn in value by 2030, with investment managers saying that “regulatory complexity remains a key obstacle”.
For firms looking to expand into new markets, relying on a solution like NetSuite can help manage localization and compliance requirements more effectively.
Popular NetSuite Products for Private Equity
NetSuite Planning and Budgeting (NSPB)
NSPB is a cloud-based financial planning and analysis solution that enables organizations to create budgets, forecasts, and reports. Private equity firms use NSPB to analyze portfolio company performance, streamline financial planning processes, and enhance decision-making.
NetSuite OneWorld
OneWorld is a global business management solution that provides real-time visibility and control over financials, inventory, and operations across multiple subsidiaries and currencies.
Private equity firms leverage OneWorld to manage and consolidate financial data from their portfolio companies, ensuring compliance and facilitating cross-border operations.
Advanced Revenue Management (ARM)
ARM is a solution that automates revenue recognition processes in compliance with accounting standards. Private equity firms use ARM to ensure that their portfolio companies adhere to revenue recognition regulations, improving financial reporting accuracy and reducing lengthy and costly audit risks.
SuiteBilling
With the rise in popularity of subscription-based businesses, even car washes are being “transformed by the injection of sophisticated private equity groups trying to transition these businesses into subscription companies”, says John Warrilow, founder of the Value Builder System.
But how can private equity firms manage businesses with these types of revenue models? Introducing SuiteBilling, a billing and invoicing solution that supports subscription-based and usage-based billing models.
Private equity firms employ SuiteBilling to enhance the revenue management capabilities of their subscription revenue model based portfolio companies, enabling them to implement flexible billing strategies and improve cash flow.
Oracle Cloud Infrastructure (OCI)
OCI is a cloud computing service that provides a range of infrastructure and platform services. Private equity firms may use OCI to host applications and data for their portfolio companies, ensuring scalability, security, and performance while optimizing IT costs.
Why Choose an Implementation Partner Like Plative?
Tech Due Diligence
Even before closing a deal, having a partner like Plative who can conduct tech due diligence to guide the tech stack roadmap is a tremendous value add. This includes separation from the parent company and setting up an independent tech stack, ensuring a smooth transition.
Strict Deadlines
Divestitures and divisional buyouts often come with strict deadlines for cutting off from parent company IT systems. Missing these deadlines can result in heavy penalties. Plative’s expertise ensures that firms go live on schedule, avoiding costly delays.
No Room for Trial and Error
Given the leverage involved in deals, there’s no room for trial and error. Tech optimizations are a critical part of the value thesis behind these deals. Plative helps create and implement a roadmap that realizes this value.
High-Paced Environment
The fast-paced nature of private equity deals means quick go-live dates and numerous moving pieces. Plative’s ability to own significant portions of the implementation, from SFDC to NetSuite and middleware integrations, eliminates the need to coordinate with multiple service integrators (SIs), helping you save time to focus on core business activities.
Data Prioritization
Data is one of, if not the most, crucial elements in any implementation. Plative ensures that data is a priority from day one, integrating it into the project plan to facilitate informed decision-making.
NetSuite offers private equity firms a robust solution to streamline operations, support rapid growth, and ensure compliance across multiple geographies. By addressing challenges in tech implementation, automation, and reporting, NetSuite helps firms focus on what they do best—growing their portfolio companies.
Choosing an implementation partner like Plative adds another layer of support and expertise, ensuring that firms meet strict deadlines, optimize their tech stack, and realize the full potential of their investments. For private equity firms looking to thrive in today’s competitive landscape, NetSuite and Plative offer a winning combination.
Ready to transform your private equity operations with NetSuite? Contact Plative to get started on your implementation today!