What PE is outsourcing to create value [re-release]
Oct 13, 2022
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Greg Schooley, EY-Parthenon US Value Creation Leader, discusses how PE outsources tasks to create value. The podcast explores the shift in outsourcing deals and the role of CFOs. It also highlights the importance of choosing the right vendor, trends in outsourcing, and the significance of cybersecurity in PE portfolio companies.
Outsourcing in private equity is no longer limited to cost-cutting and strategic sourcing, but also involves leveraging digital tools like automation and advanced analytics to create value.
Private equity companies can now access cutting-edge technologies and capabilities through outsourcing, which can lead to revenue growth opportunities in addition to cost reduction.
Deep dives
Key Outsourcing Trends
Deloitte's 2021 Global Shared Services Outsourcing Survey highlights four key outsourcing trends: prioritization of cost reduction, reliance on cloud and robotic process automation, investment in building supplier management capabilities, and the need for service providers to be agile.
Value Creation and Private Equity
Private equity companies are exploring outsourcing as a means to access cutting-edge technologies, reduce costs, and create revenue growth opportunities. Traditional levers for value creation, such as cost-cutting and strategic sourcing, have expanded to include digital tools like automation and advanced analytics.
Evolving Landscape of Strategic Outsourcing
The narrative around strategic outsourcing has shifted from mega outsourcing deals to more specific, point solution-driven arrangements. Small to mid-cap companies can now benefit from outsourced services that focus on discreet processes within a given function, such as customer credit review in finance or IT help desk support.
Greg Schooley, EY-Parthenon US Value Creation Leader, joins Winna Brown to discuss what tasks PE is outsourcing across business functions such as finance, IT, HR and customer service to create value.
The path to successful value creation in private equity (PE) today goes beyond typical levers such as G&A cost-cutting, sales force effectiveness and strategic sourcing. It’s about an approach that leverages digital tools including automation, strategic outsourcing and advanced analytics.
Going forward, PE-owned companies of all sizes may need to look at outsourcing as a way to access cutting-edge technologies and capabilities that can lead to revenue growth opportunities, in addition to reducing costs.
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