By Fletcher Cox, Director of Sales, EPMI
When it comes to managing their financial data, private equity firms face a unique set of challenges. Portfolio investments operate independently on their own ERP system, with a distinct data format in the chart of accounts. Traditionally, there are a series of handoffs between the portfolio CFO and the private equity team. Each party manually manipulates an ERP export in Excel to gain an understanding of portfolio performance. This legacy process is error-prone, time-intensive, and difficult to aggregate into a portfolio-wide reporting package.
Private equity firms can significantly improve this process using Oracle Cloud Enterprise Performance Management (EPM). You can automate data consolidation, report faster, and plan more effectively with stakeholders at the portfolio, fund, and investor levels. Here’s how.
Portfolio data consolidation
Using the financial close and consolidation tools in Oracle Cloud EPM, each portfolio ERP system is mapped to a single chart of accounts, with configured parent-child relationships that represent the legal and accounting structures of the partnership. This gives you a centralized, standardized, and auditable set of portfolio data—along with continuous fund visibility and less time spent manipulating CSV exports from ERP systems. It will also help automate the close process: Financial Consolidation and Close in Cloud EPM reconciles intercompany transactions, converts currency, and calculates ownership equity on an automated and scheduled basis.
Stakeholder reporting
At the same time, Oracle Cloud EPM has out-of-box frameworks for financial statement reporting across all industries. For private equity leadership, this means reporting packages are easier to edit, quicker to generate, and can be accessed from any device. Microsoft Office exports are integrated, and the pre-built dashboards provide “at a glance” KPIs to evaluate fund performance against benchmark goals.
Access to investment data is provisioned at varying security levels, so analysts, investors, and portfolio employees can only access the reports relevant to their position and seniority level. While reporting is traditionally executed through Excel, you can navigate the entire EPM platform through the Excel add-in, Smart View, providing a familiar user experience but with live data.
Planning and profitability
When working remotely, disconnected planning and forecasting processes will hinder the efficiency of any operation. Oracle Cloud EPM lets private equity firms collaborate with their portfolio investments on budget cycles, revenue goal setting, and analyzing product profitability. A common application instance can be shared across the fund and portfolio companies. Cloud EPM improves alignment on yearly plans, tracks variance over historical performance, and uses predictive intelligence to glean insights from portfolio ERP data.
Master data management
Oracle Cloud EPM is uniquely equipped with an integrated master data management tool for data hierarchy governance and management. Oracle Cloud Enterprise Data Management (EDM) supports self-service data management across multiple software systems (ERP, HR, EPM, etc.) to ensure integrity in your data hierarchies. Use cases range from CoA updates to maintaining your workforce hierarchy as you scale through new product launches and M&A activity.
Private equity firms have much to gain from integrating Oracle Cloud EPM into their daily operations. An accurate single source of data, remote collaboration, and modern data governance and management are just a few of the key benefits that private equity firms can realize.
Learn more about Oracle Cloud EPM.
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