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Cloud advisor 2nd Watch on Private Equity roll-up strategies

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Pull sources of data – ERP, CRM, IoT – into a consolidated data warehouse

The best way to accomplish these goals with minimal operating company disruption, and on a relatively short timeline, is to merge the portfolio companies on a data basis. Pull each of the portfolio company’s sources of data (ERP, CRM, EMR, auxiliary systems, social media, IoT, third party, etc.) into a consolidated data warehouse. Then integrate the companies on a virtual basis, designing and implementing a powerful data model to enable consolidation.

Once the data warehouse and the consolidated data model is in place, standardised, single-source-of-truth, finance and operating statement dashboards will be in place. These dashboards generate near real-time insights for PE management, their lenders, the executive management team, local operating managers, and employees. Dashboard reports enable self-service analytics, which allows for a much deeper understanding of portfolio company performance, and efficient operational reviews and conversations.

With the dashboards in place, the complete team can focus on value identification and creation with standardised KPIs (e.g., EBITDA, operating metrics, cash flow, etc.). Dashboards can be designed and built to benchmark across the portfolio companies and up against best industry practices. Value trend lines can be measured, as well as identifiers of both best case and lagging performers. Specific areas of performance can be targeted (e.g., A/R, inventory, fixed asset utilisation, labour efficiency, etc.) and compared to find sources of cash flow improvement. With these tremendous analytics and insights, best practices can be identified, and action plans can be created to implement across the new enterprise. Conversely, remediation action plans can also be put in place for lagging performers with improvement monitoring and scorecards.

Building and implementing an enterprise data warehouse and business intelligence dashboards creates the asset of true incremental value. With enterprise data consolidated and modelled, new opportunities for predictive analytics, data science, and deep value discovery are possible. 

New marketing analytics strategies can be put in place. New products and services can be imagined and developed through data science ROI use cases. Optimisation opportunities will be found, analysed, and implemented. As operating teams become more data-savvy, more use cases will be discovered and implemented for continuous optimisation.

In summary, the quickest and most effective way to impact a PE financial and operating transformation for a roll-up is to integrate at the data level. Data integration, consisting of a data warehouse and targeted financial and operating dashboards, accelerates the value creation deal process. In turn, PEs are able to maximise the financial ROI of the deal, thereby generating the greatest return for the investment firm and fund investors.

About Jim Anfield of 2nd Watch

Jim Anfield is a Healthcare Practice Lead at 2nd Watch, a premier cloud and data & analytics technology consulting firm. His experience covers a broad spectrum of healthcare payers, providers, third-party administrators (TPAs), healthcare business service providers, and healthcare tech with various use cases that include payment, treatment, and operations. Jim focuses on helping his clients grow revenue, reduce cost, and deliver supreme customer experience by leveraging enterprise data and applying analytics.

About cloud, data and analytics experts 2nd Watch

2nd Watch walks alongside its clients to help them navigate and embrace change to provide better customer experiences through the blend of technology and innovation that is at its core.

Their cloud-native capabilities in strategic consulting, workload design, technology deployments and workload management enable their clients to have the agility of a growth company and the security of a leader. 

2nd Watch’s team of experts works with global brands in financial services, retail, fast-moving consumer goods, media, manufacturing IT, healthcare and education.

Gartner has recognised 2nd Watch as a leader and a challenger in its Magic Quadrant for Public Cloud Infrastructure Professional & Managed Services, Worldwide reports. 2nd Watch is proud to be recognised for its completeness of vision and ability to execute.

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