The private equity landscape today has become increasingly crowded. Aggressive growth over the past decade has resulted in fierce competition with more competitors and peers entering the deal-making game. Increasing efficiencies in a PE firm is nothing new to prevent margin erosion, and today it has certainly taken on a new sense of urgency. Private equity players have to look outside the box for opportunities to maximize EBITDA, and one way they’re finding to do this is by streamlining and consolidating processes for cost-reduction and efficiency, especially in their back-office operations.

Typically, an asset will have a great front, but could face huge obstacles with disparate accounting systems, convoluted workflows and de-centralized processes. Adding skilled manpower doesn’t really amount to efficiency, on the contrary it only gets expensive fast. Slow financial closings and poorly documented processes, as well as leadership that spends much of its time on transactional rework instead of growth strategy, makes for an opportunity cost to really consider. Either they divert revenue and attention toward internal value-neutral tasks or realign to growth vehicles like research and development (R&D).