The 5 things PE operating partners expect from your CPM

February 25, 2025

Meet the
Author:

Justin D'Onofrio

Managing Director, Performance Management Team Lead

Meet the
Author:

Justin D'Onofrio

Managing Director, Performance Management Team Lead

Put simply, PE-backed CFOs and their supporting Operating Partners have one primary mission: to drive portfolio company value while ensuring alignment with the investment thesis. But that mission becomes significantly more challenging when faced with fragmented data, inconsistent reporting, and inefficient forecasting processes—roadblocks that prevent PE teams from acting with speed, confidence, and agility.

And if modeling business changes and monitoring financial results are pillars of value creation (which they are), then Corporate Performance Management (CPM) tools are the foundation. When thoughtfully implemented, CPM tools enable a centralized platform for data-driven decision making and enhanced financial visibility—ultimately unlocking value.

Here are 5 ways that CFOs can harness the power of CPM to help PE operating partners drive sustainable impact:

1. Standardize financial reporting for better portfolio visibility

As a CFO, you know your PE sponsors manage diverse portfolio companies, each with their own ERP, financial structure, and reporting nuances. Without a standardized approach to financial reporting, evaluating portfolio company performance becomes a cumbersome process for sponsors. CPM tools ease the burden by:

Consolidating disparate data sources to provide a single source of truth for key financial and operating metrics.
Automating the financial reporting process to reduce manual effort and speed up the generation of financial insights.
Creating standardized dashboards that provide consistent visibility into portfolio company performance.

CPM solutions enable operating partners to get a uniform, streamlined view of financial performance for each of their portfolio companies. CFOs should ensure that their CPM-enabled reporting structures are in line with sponsors’ standards to enable faster and more informed business decision-making.

2. Enhance forecasting and scenario planning

PE value creation plans thrive on data-driven, forward-looking insights. Traditional forecasting models in Excel often fail to keep pace with market and business volatility, making it near impossible for CFOs and operating partners to anticipate and react to risks and opportunities. CPM tools enable:

Driver-based forecasting that aligns key financial inputs with operational performance, helping attribute financial results directly to actionable business drivers. (For example: In a SaaS business, you might want to consistently monitor whether you have enough sales reps and quota attainment progress to achieve revenue targets).
Scenario modeling capabilities that allow CFOs to deliver models that help sponsors assess the impact of market shift, cost structure changes, or strategic pivots. (For example: modeling scenarios to help understand the impact of an acquisition, new product launch, or customer churn).
Rolling forecasts that replace static annual budgets, automated to mitigate the lack of up-to-date views on core financials.

By leveraging predictive analytics and real-time forecasting, PE operating partners can guide their portfolio companies toward proactive decision-making—rather than reactive course correction that puts your business behind.

The 5 things PE operating partners expect from your CPM

1. Standardize financial reporting for better portfolio visibility

2. Enhance forecasting and scenario planning

3. Streamline KPI tracking & operational insights

4. Drive value creation initiatives

5. Ensure the most successful exit process

3. Streamline KPI tracking & operational insights

Operating partners track operational KPIs to measure value creation. But this data is often scattered across multiple ERPs, making extraction a manual and time-consuming task. While all companies should have an operational and centralized data warehouse, CPM systems can also serve to streamline reporting on the most business-critical KPIs. With a CPM platform, you can:

Automate the tracking of key KPIs to ensure consistent measurement over time.
Benchmark performance across companies, industries, and historical data to gain valuable insights.
Customize dashboards to get quick insights into revenue growth, EBITDA improvement, and other standard financial health metrics.

With these tools, CFOs can easily access and analyze data for actionable insights—laying the foundation for them to collaborate with their operating partners to review performance, intervene strategically, and drive portfolio-wide improvements.

4. Drive value creation initiatives

The role of the operating partner is to support CFOs in enhancing EBITDA and maximizing exit multiples. Doing so requires finance teams to deploy data-driven strategies—which, at their core, are enabled by CPM. To turn data into value creation, CPM solutions:

Identify cost optimization opportunities through appropriately granular opex forecasting and spend analysis.
Align strategic initiatives with financial targets and track progress in real time.
Facilitate data-driven decision-making that ensures investment in initiatives with the highest ROI.

By providing transparency into financial and operational drivers, CPM platforms give sponsors a clear view into their portfolio company data—allowing them to accelerate value realization across their portfolio.

5. Ensure the most successful exit process

From Day 1, portfolio companies are working toward exit, whether through a sale, IPO, or recapitalization. CPM is key to exit readiness, as it:

Provides clean, auditable financials that facilitate due diligence and valuation discussions.
Demonstrates a track record of financial discipline through consistent reporting and KPI tracking.
Supports post-exit transition planning by maintaining operational continuity and enabling post-exit value creation plan models.

A streamlined exit with maximum returns is the ultimate private equity goal—and CPM solutions empower CFOs and operating partners to position their portfolio company to achieve it.

The bottom line: CFOs and operating partners need to work together to manage complexity, uncover insights, and accelerate value creation. The right CPM solutions overcome fragmented data silos and inaccurate forecasts to make it happen—with minimum effort and maximized returns.

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