Private equity firms are in the business of investing in portfolio companies, each of which needs to increase revenue, reduce waste and generate healthy profit margins to create value for shareholders and investors.
In order to reach these lofty goals, more firms are turning to modern technology. A fully integrated ERP and CRM solution will provide greater control and insight over finances, operations, and improve the bottom line.
Manage Cost-Cutting Initiatives With ERP
In many cases, a private equity firm will employ two strategies for improving the portfolio company’s revenue which includes cost-cutting initiatives and revenue-building initiatives. To save money, many business leaders turn to an enterprise resource planning (ERP) solution. ERP offers a strong foundation for capturing, analyzing and using core business data generated during financial operations, supply chain and inventory management, manufacturing and distribution operations, and other key business processes.
Understanding existing business processes is the first step toward improving them. Business leaders can use ERP to apply lean manufacturing practices, establish budgets or institute other procedures aimed at reducing wasteful practices and spending. Dashboards and business intelligence features built into many strong ERP solutions, including SAP Business One, put key performance indicators or metrics at the fingertips of management, offering visibility as these new measures are put into place. Armed with real-time insight, leaders can monitor the results of these best practices and further optimize production, procurement and other business operations.
Build Revenues with CRM
A customer relationship management (CRM) solution is better suited for revenue-building processes. Sales leaders use CRM to identify and nurture leads, track sales opportunities and monitor the results of marketing campaigns. CRM also offers dashboards and business intelligence features that provide insights into selling tactics, customer services, preferred products and other metrics that can lead to stronger sales growth and improved customer satisfaction.
While cost-cutting initiatives and revenue-building initiatives are two sides of the same coin, each strategy requires a different set of tasks and technology. Integrating ERP and CRM provides private equity firms with the control and insight needed to turn a struggling business into a successful one. Contact N’ware Technologies for more information about choosing and deploying the ERP and CRM solutions that will create value for each portfolio company managed by your private equity firm.
