Value creation in private equity (PE) is no longer about financial engineering alone. Competitive pressures increase, fiscal landscapes evolve and strategic transformation has become the cornerstone of securing and realising value. Drawing on extensive experience in value creation, cost transformation, operating model change, multiple ERP enabled transformations, transformation recoveries, and operational turnarounds, this article explores the challenges and opportunities that unlock value.
Value Creation in a Challenging Landscape
In the UK Value Creation programmes are facing upward pressures in the cost base, influenced by the recent October Budget, challenges include Increased Employer National Insurance Contributions, Business Rates Reforms, Energy Costs though and wider inflationary pressure, these can then place wider challenges onto the supply chain and impact you wider supply chain. Against this backdrop, PE firms must prioritise structured Value Creation
Programs (VCPs) that focus on:
Operational Efficiency: Reducing costs and improving EBITDA.
Scalability: Building scalable technology infrastructure to support growth.
Revenue Growth: Expanding into new markets and innovating business models.
Resilience: Embedding leadership and behavioural change for sustainability.
The Role of ERP and Integration in VCPs
Enterprise Resource Planning (ERP) systems are critical enablers of operational improvement and are often used to create Shared Services or to enable the outsourcing element of Finance, HR and other functions. Executed well they provide the backbone for aligning key business functions, finance, HR, supply chain, and customer success, but they can equally become a drag on value creation when the underperform.
Key Lessons:
Internal Capability Over External Reliance: Over-reliance on system integrators can lead to delays and cost overruns. Building an internal team ensures alignment with strategic goals and reduces long-term vendor dependency.
Building a home team advantage by ensuring core areas of Functional & Business Process Design, Data Migration, Integration, Testing & UAT and Change Management are areas of responsibility for client-side teams supported by the System Integrator.
Change Management is an investment, not a cost, creating local change champions and key users enables through a centralised Change Management team is a critical success enabler that overcome change resistance and build competency to support key areas like Data Migration Validation and UAT.
RCK Insight: In support of a PE Portfolio business facing an ERP rollout crisis restructured its governance to integrate a unified template across regional units. By embedding internal leadership and aligning with outsourcing partners, the company standardised operations, improved cost-efficiency, and scaled its infrastructure for growth.
Governance: The Anchor of Value Creation
Robust governance frameworks are essential to the success of VCPs. They ensure accountability, streamline decision-making, and enable real-time tracking of transformation outcomes.
Best Practices Include:
Transformation Offices: Creating centralised teams to oversee initiatives and ensure alignment with strategic goals.
Cross-Functional Collaboration: Involving IT, finance, operations, and commercial teams to drive holistic change.
Data-Driven Oversight: Utilising tools like McKinsey Wave for benefit tracking and real-time adjustments.
RCK Insight: In a complex transformation involving operational and cash-flow improvements, a structured governance model led to $205M in annualized savings and significant EBITDA enhancements. Cross-regional transformation teams ensured alignment and timely execution.
Operational Excellence through Leadership and Culture
Beyond tools and frameworks, successful transformations hinge on leadership and cultural alignment. Embedding a high-performance culture accelerates adoption and ensures sustainability.
Key Levers:
Behavioural Change: Shifting organizational mindsets to embrace new ways of working.
Leadership Engagement: Active involvement of senior leaders to champion initiatives.
Stakeholder Buy-In: Aligning regional and functional leaders through transparent communication and early success demonstrations.
Adapting to Global Trends and Fiscal Challenges
The private equity landscape is increasingly shaped by an increase in deal levels, sector-specific opportunities, and fiscal challenges. For instance:
Technology and SaaS Models: These have become high-growth areas, with investments focusing on innovation and recurring revenue streams.
Infrastructure and Resilience: Investments in scalable, resilient models ensure portfolio companies remain competitive despite market volatility.
Fiscal Planning: Strategic tax planning and cost-optimisation initiatives mitigate the impact of rising taxes and regulatory burdens.
Case Studies: RCK Transformation in Action
Operational Turnaround:A global enterprise faced mounting costs and inefficiencies. By deploying a structured transformation program, the company achieved a 35% reduction in headcount and over $120M in cash flow improvements.
ERP and Integration Recovery:A technology-focused organisation faced significant delays in ERP implementation. By restructuring the program and embedding internal governance, the company standardised processes across 24 global units, driving operational efficiencies and scalability.
Revenue and Commercial Alignment:A professional services organisation restructured its sales processes, integrating CRM tools and improving alignment with customer demands. The result was a streamlined pipeline, improved NPS scores, and sustainable revenue growth.
The Future of Value Creation in Private Equity
To succeed in today’s complex landscape, private equity firms must adopt a holistic approach to value creation. This requires:
Technology-Driven Strategies: Leveraging ERP systems and integration to enable operational excellence.
Leadership and Culture: Driving behavioural change and stakeholder alignment.
Fiscal and Sectoral Agility: Adapting to tax reforms and focusing on high-growth sectors.
Key Takeaway: Value creation is a blend of science and art, combining structured frameworks with leadership, culture, and adaptability. For private equity firms, this approach ensures not just exceptional returns but also the resilience and scalability of portfolio companies.
Would you like to expand on specific sectors, fiscal impacts, or additional case studies to further enhance the article?
How Are You Fostering Coalitions to Drive Transformation? Let’s Connect!
As Casey Stengel once said: “The secret of managing is to keep the guys who hate you away from the guys who are undecided.”
Building coalitions isn’t always smooth sailing, but with the right strategies, it can unlock unmatched potential.
Transformational success is rarely about technology or processes alone—it’s about aligning culture, leadership, and operational goals to drive meaningful change.
Let’s take your transformation efforts to the next level, reach out directly at shaun.taylor@rckpm.es for a more in-depth conversation.
About Shaun Taylor
Shaun is a seasoned C-level transformation executive with a proven track record in strategic growth, operational optimisation, and value creation, he specialises in helping c-suite leaders navigate complex transitions. His expertise lies in large-scale and private equity-backed businesses, where he has secured complex transformation and operational successes that have deliver measurable outcomes.
Through the RCK Programme Methods, he brings a structured approach blending agile principles with deep operational insight to align technology, operations, and strategy to achieve sustainable success. Whether it’s Cost Transformation, Value Creation, Enabling ERP-enabled change or building coalitions that foster cultural alignment, Shaun and the RCK team ensure your transformation efforts are not just implemented but delivery the results you have committed.
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