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Capability Center-as-a-Service
The Global Capability Center (GCC) landscape in India is transforming. Organizations are increasingly looking at GCCs to drive growth and innovation for a sustainable future. Capability Center-as-a-Service (CaaS) is a one-stop solution by EY to address your GCC needs starting from setup to scale to transformation.
Shared services benefits for PE firms and portfolio companies
Shared services platforms offer significant cost advantages for portfolio companies by reducing the total cost of operations. Over a five-year period, projected savings include 50% to 60% through labor arbitrage, 10% to 15% through centralization and standardization initiatives, and 12% to 18% through automation and digitization. Additionally, portfolio companies gain access to a skilled talent pool from the Private Equity (PE) firm’s shared services, enabling them to optimize operations.
Streamlined governance, shared resources, and best practices improve operational efficiency, allowing companies to meet SLA/KPI benchmarks effectively. These platforms also foster innovation by facilitating workforce upskilling and technology sharing, which increases employee productivity and accelerates digital adoption. Furthermore, consolidating the vendor base and reducing reliance on outsourced vendors minimizes error rates and their associated costs.
Benefits for PE Firms
For PE firms, shared services provide access to a skilled cross-functional talent pool by leveraging shared resources across the portfolio. This approach enhances innovation by utilizing shared technology platforms and best practices, improving overall portfolio performance and operational efficiency.
Shared services also unlock new revenue streams through cross-charging models, where PE firms offer specialized services to their portfolio companies. Moreover, these platforms are strategically designed for scalability and future growth, employing a plug-and-play model that enables easy integration of new companies and services.
Process that can be transitioned to a shared services model
Core functions such as finance and accounting, human resources, information technology, procurement and taxation across industries have a strong potential for offshoring. A shared services model integrated within private equity (PE) firm’s shared services can unlock this potential, driving significant improvements in efficiency and scalability.
For financial advisory and investment firms, the shared services model offers unique benefits by tapping into the specialized resources and capabilities of the PE firm’s shared services. These includes domain specific roles like fund accounting, financial reporting, investor portal management, treasury etc. This synergy enables portfolio companies to streamline operations and focus on strategic growth.