Tag Archives: outsourcing

Introduction

The process of investigating and compiling data on possible suppliers, goods, and services in order to make an informed purchasing decision is known as procurement research. Assuring the best value requires investigating and assessing the availability, affordability, and quality of products and services. In order to choose the optimum time to buy and the suppliers to deal with, this procedure also entails evaluating the state of the market. It is a crucial step in the procurement process since it guarantees that the appropriate goods and services are acquired at the appropriate cost. It also helps to discover any possible hazards related to the transaction, like delivery schedules, product quality, and supplier dependability. To ensure that businesses make well-informed decisions and secure the best value for their money, procurement research is essential.

Client Priorities in Effective Procurement Research

In this poll, clients were asked to identify the strategies they would prioritize for effective procurement research. The results highlight a clear emphasis on two key aspects: Supplier Management and Digital Platforms/Technologies. A significant 75% of respondents expressed a preference for prioritizing Supplier Management, underscoring the importance placed on building and maintaining robust relationships with suppliers. This indicates a recognition among clients that effective supplier management is fundamental to successful procurement research, ensuring reliability, quality, and favorable terms.

Additionally, 25% of respondents highlighted the significance of Digital Platforms and Technologies in their procurement research strategies. This suggests a growing awareness of the role technology plays in enhancing efficiency, transparency, and overall effectiveness in the procurement process. The inclusion of digital tools aligns with the modernization trend in procurement, emphasizing the need to leverage technological advancements for streamlined and data-driven decision-making.

Interestingly, Advanced Data Analytics Tools and Cross-Functional Collaboration did not receive any votes in this particular poll. While this might indicate a lower immediate priority for these aspects among the respondents, it also underscores the diversity of approaches and preferences in the realm of procurement research. Ultimately, these results provide valuable insights into the evolving landscape of procurement strategies, with a clear spotlight on supplier management and the integration of digital solutions.

Navigating the Procurement Research Journey with Us

The types of procurement research engagements might differ based on the industry, type of business, and particular needs. Nonetheless, the following are typical tasks connected to procurement research:

Navigating the Procurement Research Journey with Us

Navigating the Procurement Research Journey with Us

Needs Assessment:

At our core, we prioritize understanding your unique challenges and pain points to tailor effective solutions. We actively listen to your concerns, acknowledging the delicate balance required between quality and cost. Supplier relationships are integral, and we delve into strategies for enhancing collaboration and reliability. Operational inefficiencies pose obstacles, and our approach addresses streamlining processes for optimal performance. Cost management is a key facet of our considerations, ensuring that solutions align with your budgetary constraints. Moreover, we recognize the imperative for growth and profitability, shaping our strategies to support your aspirations. By comprehensively addressing these critical aspects, we aim to provide solutions that not only mitigate challenges but also foster a resilient and thriving operational environment for your business.

Supplier Identification and Market Analysis:

We carefully choose a strong pool of suppliers and evaluate each one’s initial product and business capabilities. With every supplier on our shortlist, we begin Non-Disclosure Agreements (NDAs) to strengthen confidence and privacy. Our procedure explores price schemes and technological know-how in addition to providing high-level assessments. This all-inclusive strategy guarantees that the vendors we suggest satisfy strict standards for competence and reliability in addition to matching your needs.

RFP or RFQ:

We carefully gather all relevant information before starting the Request for Proposal (RFP) process, including product specifications, availability, cost, and revenue estimates. We rank providers using a methodical process that assesses their strengths and suitability for your objectives. We also concentrate on finding the best deals and cultivating worthwhile alliances. Comparing supplier variations is an essential step that helps create strong contingency plans and reduce risk. We guarantee that your procurement objectives will be reached with accuracy, effectiveness, and strategic insight through this painstaking procedure.

Procurement Research: Enhance, Adhere, Engage:

We work as a dynamic team, valuing cooperation and considering your suggestions at every turn. Our unchanging goal is your complete satisfaction. Anticipate frequent updates regarding the project’s advancement, guaranteeing transparency all along the way. We will not keep you in the dark about our ongoing work. Furthermore, we surpass mere execution by closely observing the results of our projects. Using meticulous monitoring and assessment, we enable the information to skilfully tell the tale of our endeavours. Our focus on collaboration, openness, and data-driven decision-making highlights our commitment to providing the best possible outcomes and cultivating a fruitful and fulfilling working relationship with you.

Magistral’s Services on Procurement Research

Gaining knowledge about suppliers, goods, services, and market dynamics is the primary goal of procurement research, which aids in the development of well-informed decisions during the procurement process. Procurement research involves the collection of data from a range of sources, including supplier databases, industry reports, trade publications, and online and in-person supplier communication. After that, the data gathered is examined and utilized to create a supplier selection procedure and purchase plan.

Magistral's Services on Procurement Research

Magistral’s Services on Procurement Research

Spend Analysis:

In procurement research, spend analysis is a crucial process that involves examining and categorizing an organization’s expenditures. By scrutinizing spending patterns, businesses gain insights into cost-saving opportunities, vendor performance, and compliance. This data-driven approach allows for strategic decision-making, helping organizations optimize their procurement processes, negotiate better contracts, and enhance overall financial efficiency. Spend analysis is integral to informed decision-making and achieving cost-effective outcomes in procurement.

Low-Cost Country Sourcing:

Low-Cost Country Sourcing in procurement research involves identifying and procuring goods or services from countries with lower production costs. This strategic approach aims to achieve cost savings while maintaining quality standards. Analyzing global markets and leveraging favorable economic conditions, businesses can enhance competitiveness and optimize their supply chain for greater efficiency and value.

Sourcing Strategy:

Sourcing strategy services in procurement research focus on developing effective approaches to acquiring goods and services. This includes supplier identification, evaluation, and negotiation to optimize costs and quality. Tailored strategies enhance supply chain efficiency, mitigate risks, and align with organizational objectives, ensuring a competitive edge in the procurement process.

Vendor Rationalization:

Vendor rationalization in procurement research is a strategic process that involves evaluating and optimizing the vendor base. By consolidating suppliers, businesses aim to streamline operations, reduce costs, and enhance efficiency. This data-driven approach ensures collaboration with reliable vendors, improving performance and fostering stronger partnerships while aligning with organizational objectives.

Bid Management:

Magistral Consulting improves how procurement projects work and their results. Our skilled team starts by carefully looking at needs and planning with different departments to figure out exact requirements and goals. Using our experience, we find and check possible suppliers, making sure only trustworthy partners join the bidding process. We specialize in creating clear bid documents with details like technical specifications, delivery schedules, and quality standards. Our efforts to communicate effectively attract many good providers, making the competition strong for the best results. We carefully review each offer we get, using fair standards like cost, value, and past performance.

RFP Management in Procurement Research:

Our RFP management services are designed to ensure accuracy and efficiency by streamlining and optimizing the difficult Request for Proposal process. To start the RFP process, we painstakingly compile complete information, including specs, availability, and cost. We evaluate the capabilities and suitability of providers using a systematic scoring system, with a focus on strategic alignment with your goals. Beyond project execution, we also actively monitor ongoing work and provide regular reports to ensure transparent development. Careful observation and evaluation enable us to extract insightful information, guaranteeing the accomplishment of your purchase goals. With an emphasis on teamwork, openness, and data-driven decision-making, our RFP management services foster successful and satisfying collaborations.

About Magistral Consulting

Magistral Consulting has helped multiple companies to reduce operations costs through its offerings in Procurement and Supply Chain.

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The article is authored by the Marketing Department of Magistral Consulting. For any business inquiries, you can reach out to prabhash.choudhary@magistralconsulting.com

Introduction

The bid management process is like picking the right team for a job. In organizations, it’s a must for most contracts to make things fair. It starts by figuring out what’s needed and making a plan. Then, we find and check if companies can do the job. We share the job details, like what’s needed and when. Companies then tell us how they’d do it. We look at their offers, considering the price, quality, and how well they did before. After that, we talk about the deal, and if everything is okay, we give them the job. Doing this process well helps save money, makes sure the job is done right, and makes things faster. It’s like a friendly competition that encourages new ideas and teamwork between companies and the organization. In today’s changing world, making this process work well is super important for things to go smoothly and be successful.

The bid management process is the methodical process of requesting, assessing, and granting contracts to suppliers. It is a multifaceted process that calls for careful planning, smart judgment, and efficient implementation. Securing competitive bids leads to cost savings for firms with an efficient bid management procedure in place. Organizations can lower procurement expenses by negotiating advantageous terms through supplier competition.

Tech’s Impact on the Bid Management Process

Recently, we conducted a poll to gather insights on the anticipated disruptors in the supply chain industry over the next five years. A significant majority, comprising 67% of respondents, identified technology innovations as the most impactful factor. This underscores the industry’s growing reliance on technological advancements to streamline processes, enhance efficiency, and meet evolving demands. These demands make a huge impact on the entire bid management process. The dominance of technology as a disruptor aligns with the ongoing digital transformation sweeping across supply chain operations.

Tech's Impact on the Bid Management Process

Tech’s Impact on the Bid Management Process

Global events emerged as another notable disruptor, with 33% of respondents acknowledging their potential to shape the industry landscape. This recognition reflects the awareness of external factors, such as geopolitical changes, natural disasters, or global health crises, like COVID-19, that can significantly influence the supply chain. The absence of votes for regulatory changes or market demand shifts suggests that, at least according to the polled audience, the primary forces of disruption are expected to originate from technological advancements and external global events.

In conclusion, the poll results highlight a consensus among respondents regarding the transformative impact of technology on the supply chain industry in the coming years which will impact the entire bid management process. This underscores the need for industry players to stay agile, embrace innovation, and proactively adapt to technological shifts to ensure resilience and competitiveness in the market.

The Stages of the Bid Management Process

The bid management process is an integral part of the procurement cycle within the supply chain. It begins with the identification of a need or requirement within the organization, triggering the initiation of a bid. This need could range from sourcing raw materials, acquiring services, or procuring finished goods. The ultimate goal is to select a supplier or vendors who can fulfil the requirement most cost-effectively and efficiently.

Magistral's Services on the Bid Management Process

Magistral’s Services on the Bid Management Process

Assessment and Planning:

A buyer notifies the market of the terms of the contract they are acquiring by releasing a contract notice. Interested organizations can keep an eye on contract notices until they find something that would be beneficial to their company.

Identification and Prequalification:

Businesses that want to submit a proposal for the contract need to register their interest and obtain the entire tender package. This will contain the complete details of the contract as well as the invitation to tender that they must reply to. Read these materials carefully because each tender is unique, contingent on the contract in question and the evaluation criteria.

Document Preparation:

Read and comprehend all of the contract documents, and if there are any unclear points, ask the buyer for clarification. You must communicate with the buyer through an internet site, which is used for almost all public sector procurement procedures. At this point, it could also be beneficial to compare your company to any potential competitors and perform market research.

Communication:

Commence the Bid Drafting Process! Once the preceding steps are completed, whether you’re managing the bid in-house or through a professional bid writing service, the next phase involves crafting your responses. It’s crucial to prioritize the buyer’s explicit requirements over your own proposed ideas for the proposal.

Submission and Evaluation:

The contribution must be completed by the deadline and by any specific instructions; confirm whether an email or hard copy version is also needed. You will get a notification of the result of your bid, along with a summary of the successful bids and contracts granted, in due time. Typically, this will come in the form of an email and be accessible to you through the portal. Although it is typical for the award decision to be postponed, make sure you stay informed about any updates from the authority so you are prepared for this and know when the contract bid may begin. Regardless of the outcome of your offer, consistently seek input to facilitate ongoing enhancements for the subsequent bidding procedure.

Negotiation:

To settle on terms and conditions, knowledgeable negotiators from these businesses speak with the best suppliers at the end of the bid management process. Achieving mutually beneficial agreements is the aim in order to successfully award contracts.

Magistral’s Services on Bid Management Process

Magistral Consulting is an expert at offering complete Bid Management Process Services, which improves the effectiveness and outcome of procurement projects. Our skilled team starts the process with a thorough needs analysis and strategic planning, working with multiple departments to specify precise needs and goals. By utilizing our experience, we find and screen possible suppliers, making sure that only trustworthy and competent partners participate in the tendering process.

Magistral Consulting specializes in creating comprehensive bid documents that provide a well-defined structure comprising technical specifications, delivery schedules, and quality standards. Our outreach and strategic communication initiatives draw in a wide range of competent providers, creating a competitive atmosphere for the best results. Our team carefully considers each offer as it is received, using unbiased standards including cost, value, and previous performance.

Review the entire bid management process:

We go over the tender documents that you need assistance with and assist you in comprehending the buyer’s specific requirements. This could be an invitation to tender (ITT) or a pre-qualification questionnaire (PQQ).

Consultation and Support:

At this point, if necessary, we can provide guidance and support on the decision to submit a bid or not, as well as assist in navigating and clarifying any particular specifics found in the tender materials.

Proposal Development:

In our summary, we use what we learned from researching the market to show we understand the customer’s business. This helps us make plans that fit their needs well. The summary is a useful tool, even when there are strict requirements. It helps us create a detailed plan. By using what we know about the customer, we make sure our ideas and strategies match what the customer needs. This way, we show we’re committed to providing solutions that work for our customers. We include case studies, and testimonials too.

Competitor Analysis:

We carefully analyse each prospect to make sure we come up with a valuable offer, especially when we notice a competitor excelling in areas important to the customer or when facing a strong local competitor.

Spot opportunities:

We understand that identifying the right opportunities to bid for begins with knowing where to find them. Online tender portals are numerous, and we ensure we are registered with the ones that align with our line of business or customer base.

Refine choices using bid/no-bid:

Now, as opportunities come our way, our next move involves establishing checks to ensure rational decisions prevail over emotions – this is what we refer to as the bid/no bid process. We prioritize dedicating our valuable time and resources to bids where we have a realistic chance of winning.

About Magistral Consulting

Magistral Consulting has helped multiple companies to reduce operations costs through its offerings in Procurement and Supply Chain.

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The article is authored by the Marketing Department of Magistral Consulting. For any business inquiries, you can reach out to prabhash.choudhary@magistralconsulting.com

Introduction

A sourcing strategy is a strategy that a company uses to find products, services, or personnel from outside sources. It describes how the company will find, assess, choose, and manage suppliers or vendors to effectively and efficiently meet its demands. The evaluation of the organization’s unique requirements forms the basis of the sourcing strategy. This entails being aware of the kind of products, services, or talent that are required as well as their volume or frequency. The firm can lay the groundwork for the sourcing process by outlining the criteria precisely.

The next step after identifying the requirements is to locate suitable vendors or suppliers who can meet them. To locate acceptable providers, market research is carried out. During the supplier identification process, variables like skills, knowledge, dependability, financial stability, and track record are taken into account. The business identifies possible suppliers, assesses them, and chooses the best ones. Suppliers are assessed using criteria that take into account aspects including pricing, quality, delivery time, customer service, and alignment with the organization’s beliefs and objectives. The company reduces the list of providers through this assessment and selects those that best suit its requirements.

The sourcing strategy takes ethical issues into account as well. When choosing suppliers, businesses are urged to take ethics and sustainability into account. This may entail examining a supplier’s adherence to labor practices, legal and regulatory requirements, and environmental, social, and governance (ESG) standards. A sourcing strategy should, in general, be in line with the objectives, financial constraints, and operational needs of the company. It should be adaptable enough to change with the times and meet changing company requirements. Organizations may maximize their external sourcing efforts and accomplish their goals by having a well-defined and effective sourcing strategy. A constant component of the sourcing strategy is continuous improvement. The company routinely examines and assesses the sourcing procedure to find opportunities for enhancement. To find potential improvements or optimizations, feedback from internal stakeholders and suppliers is solicited. It’s critical to keep abreast of technology and market trends to adjust the sourcing strategy to changing conditions.

Types of Sourcing Strategy

Depending on their particular needs, objectives, and industry, businesses can use a variety of sourcing tactics. It’s crucial to remember that sourcing tactics can be blended or altered depending on the particular conditions of a firm. The decision on which sourcing method to use is influenced by several variables, including budgetary constraints, risk tolerance, market dynamics, desired level of control, and strategic priorities. Here are a few typical sourcing techniques:

Types Of Sourcing Strategy

Types Of Sourcing Strategy

Single Sourcing Strategy

This tactic requires depending solely on one vendor or source for a specific good or service. Benefits include easier relationship management, the possibility of cost savings from purchasing in bulk, and closer cooperation with the supplier. If the sole source has problems or falls short of expectations, there is also a chance of supply disruptions.

Dual Sourcing Strategy

In this technique, businesses work with two vendors or suppliers to provide the same good or service. With a competitive bidding procedure, better terms can be negotiated as well as increased supplier competition and a backup supply in case of disruptions. Greater supply chain resilience and risk reduction are provided by dual sourcing.

Multiple Sourcing Strategy

With this tactic, various suppliers or vendors are used for various parts of a good or service. Lowering reliance on a single source, offers flexibility, diversification, and risk mitigation. Businesses can take advantage of supplier competition, bargain for good terms, and keep a diverse portfolio of suppliers.

Global Sourcing

Utilizing overseas markets to source products, services, or personnel is part of this strategy. Global supply chains are used by businesses to gain access to low-cost resources, specialist knowledge, and new markets. Global sourcing can have benefits including cheaper production costs, access to specialized talents or technologies, and chances to grow the market.

Outsourcing

The act of hiring a third-party provider to carry out particular business operations or services is known as outsourcing. It may entail outsourcing non-core tasks like IT support, customer service, production, or back-office tasks. Organizations can increase operational efficiency, access specialized expertise, focus on their core competencies, and lower expenses by outsourcing.

Insourcing

Insourcing, also referred to as in-house sourcing, refers to carrying out business operations in-house as opposed to outsourcing them to third parties. To have more control over quality, intellectual property, data security, and confidentiality, organizations may choose to insource. It enables firms to maintain closer team communication, internalize expertise, and preserve strategic competencies.

Advantages of a Well-Planned Sourcing Strategy

In addition to cost reductions, improved supplier selection, improved supplier relationships, risk mitigation, time savings, increased focus on core competencies, flexibility, and ethical sourcing, a well-designed sourcing strategy also offers many other benefits. Organizations may streamline their procurement processes, add value, and accomplish their strategic goals by putting an efficient sourcing strategy in place. Here are several major advantages:

Advantages of Well-Planned Sourcing Strategy

Advantages of Well-Planned Sourcing Strategy

Reduced Expenses

Organizations can locate suppliers who can offer products, services, or talent at reasonable pricing by using an efficient sourcing approach. Organizations can reduce their procurement costs by negotiating favorable terms and making use of economies of scale.

Improved Vendor Relationships

Setting up clear channels of communication, performance measurements, and expectations with suppliers is part of a sourcing strategy. As a result, relationships and collaboration are strengthened, which boosts supplier responsiveness, customer satisfaction, and reliability. Long-term relationships with suppliers can lead to special treatment, first access to resources, and a fruitful interchange of information and concepts.

Minimized Risk

An organized sourcing strategy includes risk analysis and backup plans. It enables businesses to expand their pool of suppliers, lowering reliance on a single source and lowering the risk of supply chain interruptions. Active risk management guards against quality problems or other unforeseen difficulties while ensuring operational continuity and minimizing potential disruptions.

Time Management and Productivity

By defining defined policies, procedures, and best practices, a sourcing strategy simplifies the procurement process. As a result, supplier sourcing, appraisal, and selection take less time. Organizations may speed up the procurement process, make informed decisions, and improve overall operational efficiency by adopting a systematic strategy.

More Emphasis on Core Competencies

Organizations can concentrate on their core capabilities by outsourcing non-core functions or acquiring specialized knowledge through sourcing techniques. Organizations can access specialized expertise, technology, or resources by utilizing external skills, allowing them to concentrate on their distinct value offering and strategic goals.

Responsible and Ethical Sourcing

Organizations can support socially responsible practices, environmental stewardship, and fair labor conditions by integrating ethical and sustainability considerations into their procurement strategies. Organizations can support their efforts in corporate social responsibility, improve the reputation of their brand, and satisfy the demands of socially conscious clients by choosing suppliers that share similar principles.

Magistral’s Services on Sourcing Strategy

Magistral has extensive experience in research and analytics, which can aid in cost reduction through sourcing strategy. Some of the services are as follows:

-Spend analytics: – Review expenditure profiles from the past and the future to find potential for supplier consolidation and tail spend optimization.

-Cost and price analytics: – Guides informed judgments and creates scenario-based, predictive cost models and pricing estimates.

-Supplier analytics: – Develop supplier sustainability scorecards, track supplier performance against Service level agreements, and create scenario models for bids and tenders.

-Risk analytics: – Pay early alerts for category risks and supplier-related risk signals. With unique analytics that blends internal and external data sources to unearth hidden insights, you may advance your goal of digital procurement transformation.

-Real-time recommendation: – Be a strategic partner to the company by recommending fresh, successful approaches to risk management, innovation, and cost reduction.

About Magistral Consulting

Magistral Consulting has helped multiple companies to reduce operations costs through its offerings in Procurement and Supply Chain.

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The article is authored by the Marketing Department of Magistral Consulting. For any business inquiries, you can reach out to  prabhash.choudhary@magistralconsulting.com

Introduction

Market Research is the practice of evaluating the viability of a new service or product by interviewing prospective customers first-hand. Market research enables a business to identify the target market and obtain consumer comments and other inputs regarding their interest in the good or service. This kind of research can be carried out internally, by the business itself, or by an outside market research firm.

As our world, both online and offline, get busier and demands more of our attention, this is quite beneficial. By comprehending your customer’s problems, needs, and desired solutions, you can build your product or service to appeal to them naturally. Market research enables you to collect data from a larger sample size of your target population and get to the heart of customer opinions by removing prejudice and presumptions. As a result, by having a complete understanding, you can make better business decisions. Let’s examine market research further.

Research – Primary VS Secondary

Finding out first-hand facts about your market and its consumers is the goal of primary research. It helps create your buyer profiles and market segmentation. Primary market research often belongs to one of two categories: exploratory research or focused study.

The data and public records you have available to conclude are all part of secondary research. Secondary research is especially beneficial for examining your rivals.

Types of Market Research

Types Of Market Research

Types Of Market Research

Interviews 

Face-to-face interactions are possible during interviews, so you may let the conversation flow naturally and keep an eye on your interviewee’s body language. Your interviewees can respond to self-reflection questions to aid in the creation of your buyer personas. These buyer personas outline the age, the number of children in the family, income level, profession, difficulties encountered at work, and other characteristics of your ideal customer’s lifestyle.

Focus Groups

Focus groups give you access to a select few people whom you may ask to test your product, see a demo, provide feedback, and/or answer specific questions. This type of market research can assist you in developing ideas for product differentiation, or the characteristics that distinguish your product from competing ones on the market.

Product Use Research

The use of the product or service can provide information on its features, as well as research on how and why your audience uses it. This type of market research also reveals how helpful the product or service is to your target market.

Observation-Based Research

With observation-based research, you can see how members of your target audience use your product or service to learn what functions well, what difficulties they encounter, and which features might be easier for them to use and understand.

Buyer Persona Research

Buyer persona research gives you a realistic view of your target market’s makeup, issues, reasons for wanting your product or service, needs for your brand and company, and more.

Market Segmentation Research

By using market segmentation research, you can divide your target market into various categories according to distinct traits. This will enable you to ascertain the most efficient strategies to suit their demands, comprehend their problems and expectations, discover their objectives, and more.

Pricing Research

Pricing analysis offers you an idea of what comparable goods and services in your market go for, what your target market is willing to pay and expects to pay, and what a reasonable price is for you to list your good or service at. You can define your price plan with the use of all of this information.

Competitive Analysis Research

Because they provide a thorough insight into the competition in your market and sector, competitive studies are quite useful. You may discover what’s working well in your sector, what your target market is already looking for in products similar to yours, which of your rivals you should strive to keep up with and outperform, and how you can differentiate yourself from the pack.

Research on Customer Satisfaction and Loyalty

Understanding what would persuade current customers to do business with you again may be aided by research on customer satisfaction and loyalty. This study will teach you the best methods for fostering customer satisfaction.

Brand Awareness Research

Brand awareness research reveals what your target market is aware of and can associate with your brand. It reveals the associations that your target audience forms when thinking about your company and what they take you to stand for.

Campaign Research

Reviewing prior campaigns and gauging how well they were received by your target audience and current clients is campaign research. It takes experimentation followed by a careful examination of what connected and resonated with your audience to keep these factors in mind for your future campaigns and concentrate on the components of what you do that matter most to those people.

Steps for Market Research

Steps For Market Research

Steps For Market Research

Define your buyer persona

Your buyer personas will be useful in this situation. Buyer personas are fictional, generalized depictions of your ideal clients, also known as marketing personas. They aid in audience visualization, communication efficiency, and strategy development.

Identify a persona group to engage

You should include folks who recently made a purchase or actively chose not to make one in the group you want to engage. Start by concentrating on people who fit the bill for your customer persona when deciding who to hire for your market research. You want to hire customers who have bought your product, bought a product from a rival, or decided not to buy anything at all.

Preparation of Research Questions

Prepare research questions for your market research participants.

List your primary competitors 

Remember that identifying the competition isn’t always as straightforward as comparing Company X to Company Y. Even though a firm’s brand may focus more on another area, a division of that company occasionally may compete with your primary product or service.

Summarize your findings

Use your preferred presentation software to create a report to simplify the process. This will make it simple to add quotes, diagrams, or call clips. Your summary should include background information, participants, an executive summary, awareness, contemplation, a decision, and an action plan. The framework should assist you in creating this summary.

Magistral’s Market Research Services

Magistral Consulting offers a range of value-added services to support market research services. Magistral Consulting provides several services including:

-Customer Needs Analysis – Understanding the needs of the customers, defining the focus group and research.

-Customer Segmentation – Segmentation of customer group with effective targeting.

-Customer Journeys – Going over the Customer experience studies to analyze the aspects of customer satisfaction, taking in feedback surveys.

-Global Expansion – Market dynamics overseas, with the development of a market entry strategy.

-New Product Launch – Dipstick Survey which means analyzing the market response in different areas of study or research, explorative research to support the launch.

-Competitive Intelligence – Competitor tracking and analysis for understanding the key steps to get an edge in the market.

-Market Analysis – End market analysis and market forecasting to support the company in setting up goals and achieving them.

-Custom Research – Customized Research for specific business situations related to Sales or Marketing.

About Magistral Consulting

Magistral Consulting has helped multiple companies to reduce operations costs through its offerings in Marketing and Strategy Support.

About the Author

The article is Authored by the Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to  prabhash.choudhary@magistralconsulting.com

Introduction

The activity of gathering and evaluating data on competing firms, industry trends, and consumer preferences to obtain a competitive edge in the market is known as competitive intelligence. It is a crucial component of business strategy since it aids organizations’ in comprehending the competitive environment and choosing how to position themselves inside it. Monitoring competitors’ offerings and pricing, keeping tabs on consumer trends and market dynamics, and examining media coverage and industry statistics are just a few of the activities that can be included in competitive intelligence. Companies can discover opportunities and challenges, create successful marketing and sales strategies, and make wise business decisions by acquiring and evaluating these data.

Using a range of business intelligence tools and strategies helps to acquire a complete view of the market. For instance, market research can offer insightful information about customer behavior and tastes, while financial analysis can assist companies in understanding the financial standing of their rivals. Combining these different strategies can result in a more thorough and complex understanding of the market and the competitive environment.

Types of Competitive Intelligence

There are several different types of competitive intelligence that businesses can use to inform their decision-making and stay ahead in a rapidly changing market:

-Strategic intelligence: This type of intelligence assists in strategic planning and decision-making by focusing on the long-term aims and objectives of the company.

-Tactical intelligence: It is a subset of general intelligence that focuses on urgent, short-term demands and supports daily decision-making and operations.

-Market intelligence: It is the collection of information about the market, such as consumption patterns and preferences, monetary situations, and regulatory developments.

-Financial intelligence: It entails obtaining and analyzing data regarding the financial performance and health of adversaries, including details regarding income, profitability, and debt.

-Product intelligence: It is the collection and analysis of data about the goods and services provided by opponents, including details on their costs, attributes, and performance.

-Competitive analysis: To spot opportunities and dangers, this sort of intelligence entails examining the strengths and weaknesses of competitors.

Benefits of Competitive Intelligence

For firms, competitive intelligence has a variety of benefits, including:

Benefits of Competitive Intelligence

Benefits of Competitive Intelligence

Improved decision-making:

With competitive intelligence becoming increasingly important in today’s business landscape, companies must understand how to gather and analyze information about their competitors and the market. Companies can stay ahead of the curve and make informed decisions that drive success by leveraging the right tools and techniques.

A recent survey found that 92% of companies believe competitive intelligence is important for their business, and 77% have a dedicated competitive intelligence function. With the global competitiveness expected to increase in the coming years, this trend is expected to continue.

Greater competitiveness:

Competitive intelligence can assist companies in identifying opportunities and risks in the market, enabling them to react to shifting conditions more effectively and maintain an advantage over rivals.

The benefits of competitive intelligence are clear. In a survey of over 400 businesses, 85% of respondents reported that competitive intelligence helped them make better business decisions, while 73% said it helped them stay ahead of the competition. In addition, 66% of respondents reported that competitive intelligence helped them identify new business opportunities, and 59% said it helped them avoid potential threats.

Reduced risk:

By being aware of the advantages and disadvantages of competitors and the market, firms can lessen the likelihood that they will make costly errors or misjudge the state of the market.

Improved reputation:

Companies can improve their reputation as thought leaders in their sector by keeping abreast of market trends and competitive activities.

Efficiency gains:

Companies can improve their overall performance and streamline their operations by using competitive intelligence to find best practices and efficiencies.

The Cycle of Competitive Intelligence

To make informed business judgments, the cycle of competitive intelligence refers to the procedure of gathering, examining, and sharing data about opponents and the market. The cycle typically consists of the following steps:

-Planning: Planning entails determining the precise information requirements of the company and creating a strategy for data collection and analysis.

-Collection: Data is collected from a variety of sources, such as social media, business reports, and public records.

-Analysis: Reviewing and evaluating the data to spot trends, opportunities, and potential dangers are the process of analysis.

-Dissemination: This process entails presenting the analysis’ conclusions and suggestions to the organization’s top decision-makers.

-Implementation: This entails incorporating the conclusions and suggestions into business planning and decision-making.

Competitive Intelligence Analysis with Porter’s Five Forces

Porter’s Five Forces is a framework created by Harvard Business School professor Michael Porter for analysing an industry’s competitive forces. The five forces are as follows:

Competitive Intelligence Analysis with Porter's Five Forces

Competitive Intelligence Analysis with Porter’s Five Forces

-The threat of new competitors: This refers to how easy it is for new businesses to enter the market and compete with established ones.

-The threat of substitute goods or services: This refers to the possibility of substitute goods or services to those provided by the current businesses.

-Buyer bargaining power: This refers to a buyer’s ability to negotiate lower prices or demand better terms and conditions from sellers.

-Supplier bargaining power: This refers to a supplier’s ability to negotiate higher prices or better terms and conditions with buyers.

-Rivalry among potential competitors: This describes how fiercely existing businesses in an industry compete with one another.

Magistral’s Services on Competitive Intelligence

Magistral gets insights into the competitive moves far better than the internal sources. These insights are fact-based and free of bias. Our CI services only recommend the strategies worth going for and not every fad the competition tries to follow. Sometimes the noise from the competition can be disturbing, and we help you differentiate the signal from the noise.

Some of the services that are associated with competitive intelligence that are offered by Magistral consulting are –

-Bespoke Market and Competitive Intelligence Services: Our services are made to assist businesses in finding actionable insights that might provide them with a competitive advantage and help them make better decisions regarding their operations and plans. We offer insightful analysis and suggestions that can assist our clients in better managing the present market conditions and positioning themselves for success by utilizing our extensive understanding of markets, industries, and competitors.

-In-Depth Assessment Research Services: We can assist clients in comprehending the complexities and prospects of a particular market by utilizing our comprehensive research capabilities, enabling them to make wise decisions about where to allocate their resources.

-Ecosystem Monitoring and Information Provision: We provide timely and accurate information on the market through reports of our analysis.

-Opportunity Identification and Performance Metrics Frameworks: We help clients harness new opportunities faster.

-Customized Solutions in Niche Domains: We provide customized solutions for improved output.

-Flexible Working Models: At our company, we understand that everyone’s needs and circumstances are different. That’s why we offer a flexible working model that allows our employees to tailor their work schedules to meet their unique needs and preferences. This can include options such as working remotely, flexible start and end times, and the ability to take breaks as needed.

About Magistral Consulting

Magistral Consulting has helped multiple companies to reduce operations costs through its offerings in Marketing and Strategy Support.

About the Author

The article is Authored by the Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to  prabhash.choudhary@magistralconsulting.com

Introduction

Private equity is a term used in the finance sector to describe investments made directly into a business by some investors and private equity organizations. Institutional investors typically make private equity investments in venture capital funding or leveraged buyouts. Private equity can be used for various goals, including technology upgrades, business expansion, acquisitions, and even the revival of a failed organization.

Private equity investors often have a 5-7-year investment horizon and expect to leave after making a significant return on their investment. Private equity investors might use various exit strategies to get their money back. Private equity (PE) has been the expansion engine for a while. The primary goals of this industry are evolution and productivity. Private equity refers to capital that is not traded on a public market and is invested in a long-established industry that is not functioning well or is about to fail. Venture Capital, Growth Capital, Leveraged Buyout, Mezzanine Debt, and Distressed Debt are the five main types of PE. A venture capitalist, often known as a “venture capitalist,” comes to their aid by offering risk-bearing funds. Institutional and individual investors contribute funds to private equity, which can be used to fund innovative technology, boost working capital, or consolidate a balance sheet.

Standard Modes of Private Equity’s Exit Strategy From Portfolio Companies

Exits are of crucial importance to Private Equity investors, and they consider a variety of different exit strategies to realize their return on investment. Some of the most common Private Equity exit strategies include:

Standard Modes of Exit Strategy

Standard Modes of Exit Strategy

Initial Public Offer (IPO)

One frequent method is to launch a company’s public offering and sell its shares to the public as part of the IPO. Depending on the situation, shares might be sold at once. Shares assigned can also be sold when the company is listed and the shares begin trading on the exchange. Because of the required costs, stock market flotation may only be employed by giant corporations, and it must be financially sustainable.

Strategic Acquisition

A strategic buy or trade sale is another choice, in which the business is sold to a different suitable company and a portion of the sale earnings is received. One of the most typical methods for private equity funds to exit is this one. The buyer will typically profit strategically from purchasing this business because their strengths may compliment one another. As a result, the buyer frequently pays more to purchase such a business.

Secondary Sale

The private investors can sell the acquired stake in the company to some other private equity group in a secondary sale. The secondary sale might happen for a variety of reasons. For example, the business may demand additional funds above the current equity fund’s capability. Alternatively, the company may have reached a point where the earlier private equity investors wanted it, and additional equity investors wanted to take over.

Repurchase by the Promoters

It is another effective exit plan in which the company’s management or promoters buy back the equity position from private investors. For both investors and management, this is an appealing exit option.

Liquidation

It is the least desirable choice, but it may be necessary if the company’s promoters and investors have been unable to run the business successfully.

Key Considerations and Trends in Private Equity’s Exit Strategy From Portfolio Companies

Key Considerations and Trends in Exit Strategy

Key Considerations and Trends in Exit Strategy

Preparing the Portfolio Company for Sale

Private Equity investors, being financial investors with an investment philosophy of creating returns on their investments, typically keep a close eye on the company’s performance and engage in strategic choices that may affect valuation (especially as their investment horizon approaches). Furthermore, as part of a portfolio company’s ‘clean-up’ prior to an impending sale, another emerging trend is to refinance or repay the company’s existing debt to be able to, among other things:

-Displaying a solid balance sheet to potential incoming buyers

-If any, obtaining a release of encumbrances over shares of other shareholders that may be relevant for a bulk sale.

Partial Exit

Retaining a majority interest or control rights in a publicly traded firm after a partial exit may expose the Private Equity investor to be classed as a promoter or “co-promoter.” Partially exiting from a private firm carries the risk of the Private Equity investor losing control and piggybacking on the founders’ or private equity’s exit strategy from portfolio companies.

Use of Insurance Product

Most Private Equity investments are made through funds with a short life expectancy and internal constraints on taking general indemnity obligations, including uncapped indemnities. As a result, using an insurance product to supplement, and in some circumstances completely replace, the indemnification structure that sellers may provide in such transactions is becoming increasingly prevalent.

Severance Payouts or Compensation Arrangements

Without the approval of the board and non-interested public shareholders, a Private Equity investor cannot enter compensation or profit-sharing arrangements (including severance payout arrangements) with the promoters, directors, or key employees as part of its exit strategy from a publicly traded company to incentivize them by sharing returns beyond a hurdle rate.

Guaranteed Returns

Much debate has surrounded the question of whether a foreign investor’s exit option can be at a pre-determined valuation while still guaranteeing returns. Indian courts have recently demonstrated a greater willingness to uphold indemnity and damages claims, even when the underlying contractual commitment conflicts with Indian exchange control prohibitions on guaranteed returns.

Tax Considerations

There may be different tax implications depending on the cost of buying shares and the difference between the purchase value and the final sale price. To minimize further tax implications, ensure those indemnification payments are not treated as income and are instead adjusted as capital gains. Exit structures must also be implemented to minimize tax exposure and prevent violating India’s “general anti-avoidance regulations.” In transactions involving selling shares by a non-resident private equity investor to another non-resident private equity investment, indemnities for potential indirect transfer taxes become an essential part of the share purchase agreements.

Enforceability of IPO provisions

Given that all the business’s directors sign the IPO offer documents, the directors’ fiduciary duties may prevent the company from conducting an IPO on terms dictated by Private Equity investors if the directors believe the IPO was not in the shareholders’ best interests. In addition, the corporation must have a proven record of profitability and net worth and a minimum amount of net tangible assets, among other requirements. As a result, the enforcement of IPO requirements in shareholder agreements has yet to be proven.

Locked-box vs Completion Accounts

There are two methods for making post-completion adjustments: completion accounts or a locked-box approach. A locked-box method is efficient since it ensures pricing certainty and saves management time and effort to prepare completion accounts. However, under a locked-box system, the negotiated post-signing interest that must be paid together with the purchase price may not be enough to balance the impact of intermediate activities that must be reflected into completion accounts.

Number of private equity and venture capital exits across India

Number of private equity and venture capital exits across India

Value of Private Equity anad Venture Capital Exits

Value of Private Equity and Venture Capital Exits

Magistral’s services on Private Equity’s Exit Strategy From Portfolio Companies

Magistral’s successful exit strategy specifies existing owners’ procedures to separate themselves from the company. The extended off-shore crew also assures that no expertise is lost across firms for similar projects and that numerous projects in several companies can run simultaneously, prioritized according to board meeting schedules. Unanticipated events may necessitate the implementation of a corporate exit strategy.

About Magistral consulting

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates and Portfolio companies. Its functional expertise is in Deal origination, Deal Execution, Due Diligence, Financial Modeling, Portfolio Management and Equity Research.

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The article is Authored by Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to prabhash.choudhary@magistralconsulting.com

Introduction

Sensitivity Analysis is a financial modeling tool that examines how the values of a group of independent variables affect a single dependent variable under specified situations. Sensitivity analysis is applied in various domains, from biology and geography to economics and engineering. In the corporate world and economics, sensitivity analysis is employed, also known as a what-if study, often used by financial analysts and economists. It is particularly beneficial for studying and analyzing processes where the outcome is an opaque function of numerous inputs. An opaque function or process cannot be studied or analyzed. Climate models in geography, for example, are typically highly sophisticated. As a result, the precise relationship between the inputs and outputs is unknown. Under a given set of assumptions, sensitivity analysis evaluates how various elements of an independent variable affect a specific dependent variable. In other words, sensitivity analyses look at how various sources of uncertainty in a mathematical model affect the total uncertainty of the model. This strategy is applied within certain boundaries dependent on one or more input variables.

Financial analysts most typically use a Financial Sensitivity Analysis, also known as a What-If analysis or a What-If simulation exercise, to forecast the outcome of a given action when executed under certain conditions. Financial Sensitivity Analysis is conducted within specific parameters set by independent variables.

Advantages of Sensitivity Analysis

The use of sensitivity analysis has several advantages. It is vital to remember that sensitivity analysis employs a set of outcomes based on assumptions and variables, which are then assessed against historical data. As a result, a sensitivity analysis is a model with some room for error that may or may not be completely accurate, but it is a practical and extensively used technique. The following are the main advantages of employing sensitivity analysis:

Advantages of Sensitivity Analysis

Advantages of Sensitivity Analysis

Decision making

Sensitivity Analysis gives decision-makers diverse options to choose from to make better business judgments. Sensitivity analysis aids in making well-informed decisions. Decision-makers use the model to decide how responsive the output is to changes in certain factors. As a result, the analyst can help in drawing factual findings and making the best judgments possible.

Predictions

It thoroughly examines factors, resulting in more accurate forecasts and models.

Areas for improvement

Sensitivity Analysis aids decision-makers in deciding where future improvements should be made. The analyst can be more flexible with the boundaries within which to assess the sensitivities of the dependent variables to the independent variables using Financial Sensitivity Analysis.

Credibility

Financial models gain credibility through sensitivity analysis, which assesses them across various scenarios.

Processes in Sensitivity Analysis

Sensitivity Analysis is a business model that shows how input factors change affect target variables. What-if or simulation analysis is other terms for this model. It is a method of predicting a decision’s outcome based on variables. An analyst can assess the impact of a change in one variable on the outcome by constructing a collection of variables. When performing a sensitivity analysis, both the goal and input variables—also known as independent and dependent variables—are thoroughly examined. The analyst examines how the variables change and how the input variable influences the target. Each sensitivity analysis can be broken down into three steps:

Processes in Sensitivity Analysis

Processes in Sensitivity Analysis

Establishing a base case

The three most typical scenarios in sensitivity analysis and scenario planning are:

-The best-case scenario, or the most optimistic scenario with the most upside potential

-The worst-case scenario or the most pessimistic situation with the most significant risk of failure.

-The base case, or the most cautious scenario, results in the middle of the best and worst-case possibilities.

Analysts will decide which independent and dependent factors are most important to the outcome once a plausible base case scenario has been found.

Determining variable inputs

Cost of goods sold, debt finance, staff salary, client foot traffic, and other input variables are examples of input variables. Cash flows, internal rate of return, net present value (NPV), and net profits are examples of output variables. For example, net present value, which accounts for the time value of money, is often used to estimate if a project would be lucrative. Initial capital, the acceptable rate of return, and the return on investment from cash flows are all factors in NPV.

Testing the variables

Analysts do sensitivity analysis on the assumed independent variables after figuring out the inputs and outputs to thoroughly assess how sensitive their base case is to even the tiniest modifications.

Because it acts as a control, it is critical to use the base case as a frame of reference for the OAT analysis. Without a realistic base case scenario, there is no way to know how the best-case and worst-case possibilities will be affected. Multiple-input variables are more likely to change simultaneously or sequentially in the real world, often in dramatic and unpredictable ways.

Top Practices in Sensitivity Analysis

Layouts in Excel

For a successful sensitivity analysis in Excel, the layout, structure, and strategy are critical. If a model is poorly arranged, both the creator and the users will be perplexed, and the analysis will be prone to errors.

The following are the most critical considerations for Excel layout include putting all the assumptions in one place in the model, formatting all assumptions in a different font color to make them stand out, considering which assumptions to test – only the most critical ones carefully and creating a separate section for the analysis using grouping.

Direct vs. Indirect methods

Different numbers are substituted into a model’s assumption in the direct method. Instead of directly altering the value of an assumption, the indirect method inserts a % change into calculations in the model.

Tables, charts, and graphs

Even the most informed and technically sophisticated finance experts may find sensitivity analysis challenging to understand. Therefore, presenting the results in an easy-to-understand and follow format is critical.

Data tables are an excellent method to explain how changing up to two independent factors affects a dependent variable. The data table below illustrates changes in revenue growth and the EV/EBITDA multiple on a company’s stock price. Tornado charts are an excellent method to simultaneously display the impact of multiple variables. They are named Tornado Charts because they are arranged to make the chart look like a tornado cone, with the most impactful items at the top and the minor impactful items at the bottom.

Limitations in Performing Sensitivity Analysis

Excel is the most used tool for sensitivity analysis and creating financial models. Spreadsheets, on the other hand, leave a lot to be desired. They need much manual entry and leave little space for error. In a two-dimensional spreadsheet, creating a multidimensional analysis is also tricky. When stakeholders arrive with a fresh set of questions to be addressed, analysts must often go back to their drawing board and create new spreadsheets. These are significant to why intelligent firms should consider employing sensitivity analysis-specific financial modeling tools.

Magistral’s services on Sensitivity Analysis

Financial models have long been regarded as a reliable method of finding the contours of trade. Traditional financial models have been tweaked qualitatively due to a recent wave of acquisitions in which investors are into paying significant premiums for explosive growth or a high-impact technology. The sensitivity analysis provided by Magistral ensures the following:

-Analyzing the financial model’s unclear input values

-Predicting potential outcomes and planning for unanticipated risks

-Aiding the execution of risk assessment techniques

-Establishing co-relationships between the model’s multiple inputs and output.

-Execution of well-informed judgments

About Magistral consulting

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates and Portfolio companies. Its functional expertise is in Deal origination, Deal Execution, Due Diligence, Financial Modeling, Portfolio Management and Equity Research.

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The article is Authored by Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to prabhash.choudhary@magistralconsulting.com

Introduction

Investment banks utilize pitchbooks, which are sales books, to pitch potential clients as well as sell goods and services. It gives a general picture of the company, including historical information, financial strength, and services offered to potential customers. The sales crew of a company will utilize a pitchbook as a form of field guide to remember key benefits and to make clear crucial points. A pitch book should contain the crucial information required to persuade a potential investor, client, or business partner. Therefore, avoid using too many words and focus on the most critical things. Key topics covered in a typical pitch book include details on the investment highlights, significant financial data, the company’s core clients and customer base diversity, obstacles to entry for competitors, ability, and plan to meet future projections, future growth opportunities, management team strength, scalability of functions, prospects in the external market place, and known risks. The information provided in the pitchbook is used by an investment bank’s sales team to market its services to potential customers. Pitchbooks can be very helpful for companies, investment bankers, investors, and other stakeholders.

Types of Pitchbook

There are four different types of pitchbooks, which are explained below:

General Pitchbook

A general pitchbook offers a wide picture of the organization and includes significant details such as past profitable investments, present transactions, trends in the market, and profit metrics. Additionally, it includes details on the company such as its history, size, key executives, and global outreach.

It includes a client list broken down by various sectors, along with the relevant services offered to each client. Finally, the pitchbook might also include information on the firm’s rivals. It gives a general overview of the company’s top rivals, their performance, and the firm’s market position in relation to them.

Deal Pitchbook

For specific deals, a pitchbook is created that emphasizes how the investment business can offer services that satisfy the client’s financial demands. Graphs are used to display market rates, trends, and a description of the firm’s valuation. A list of prospective purchasers, financial institutions, purchases, and a brief summary is also included. A summary of advice and ideas for achieving the client’s objectives is also included in the deal pitchbook.

Management Presentation

After the business closes an agreement with a client, management presentations are used to pitch to possible investors. The presentation provides details on the client’s business, along with its investment requirements, financial metrics, and information on the project that needs to be financed. The client’s goods and services, a market analysis, a list of the company’s key personnel, a financial performance history, and potential future expansion are all examples of specific data.

Sell-Side M&A Pitchbook

A sell-side M&A pitchbook’s principal goal is to persuade the customer to choose the investment bank to conduct the transaction. It includes a list of prospective purchasers for the client’s business, an overview of the valuation, suggestions, information on the bank’s profitable transactions in the client’s sector, etc.

Challenges faced by companies in the creation of a Pitchbook

While creating the pitchbook, various challenges are faced by the companies as discussed below:

Streamlining, Structuring, and Customization

Often, companies face challenges in understanding their prospective clients/ customers, and hence collating, customizing, and structuring the Pitchbook is not efficient. Selecting the right data metrics and presenting them in a structured manner is quite an arduous task that is faced by the management throughout various stages.

Challenges faced by companies in the creation of a pitchbook

Challenges faced by companies in the creation of a Pitchbook

Time-consuming and Labour-intensive

For firms, it is a challenge, as it takes a lot of time to build and finalize the framework and create a pitchbook in tandem with all the requisite information. A business team working on a Pitchbook devotes its bandwidth to requirement gathering and other tasks related to Pitchbook, eventually losing focus on other priority tasks and core competencies, which can be detrimental to the organization’s growth.

Consistency and Upgradations

Continuously upgrading pitchbooks with respect to changing market scenarios/customer requirements is a must. The companies shall incorporate new ways and develop new methodologies to work and update pitchbooks regularly to better transpire and communicate the information to its stakeholders.

Managing various Stakeholders

Many people, including the managing director, vice president, associates, and analysts, are involved in the pitchbook preparation. To outperform the competition and persuade the client that they are the greatest in the market, the company must ensure that they are utilizing the most recent industry facts. The areas that require successful management include collaboration and coordination.

Understanding Client Requirements

An effective pitchbook must be able to focus on the important details while also meeting the client’s requirements. Understanding each aspect of a unique client and deciding what information to include and exclude presents a significant challenge for businesses.

Benefits of Pitchbook Support

Below are some of the major benefits of pitchbook support:

Focus on core competency 

Pitchbook assistance can allow businesses to focus on their core operations rather than devoting time to creating a Pitchbook in which they lack expertise. As a result, prioritizing the main job is critical.

Benefits of Pitchbook Support

Benefits of Pitchbook Support

Better Analysis and Structure

Pitchbook Support will better manage and coordinate various tasks while creating a Pitchbook. It will highlight the strengths, and showcase how the organization is different from its competitors in terms of experience, expertise, and modus operandi.

Cost and Expenditure control

You can convert fixed costs into variable prices with pitchbook support, meaning you only pay for the services you utilize. Consequently, adopting a support service can enable you to cut costs on a range of expenses, such as staffing, purchasing software, expertise, etc.

Better Branding and Messaging

Materials with inconsistent or poorly thought-out messaging could be detrimental to the brand’s reputation. Given the fierce competition in the market, having a brand and pitchbook approach that is compliance-focused is essential. Pitchbook support services help present your market position, strengths, and goodwill in a meaningful way.

Better Presentation 

Pitchbook support services can help to exercise brevity and incorporate various Charts, and graphs which makes the data metrics easy to understand. Moreover, it may also take up various cases to explain various elements to its prospective clients/customers.

Magistral’s Services on Pitchbook Support

By having a Pitchbook support service, an organization can save both time and costs, along with focusing on its core competencies. It can provide a platform where it can understand the needs and requirements and offer tailor-made support services as you deem appropriate. At Magistral, in addition to providing an extension to your employees to assist with your particular needs, we give the strategic knowledge you want to assess change. To provide the most effective and cutting-edge financial solution for every client requirement, we draw upon the multi-function knowledge base and experience of professionals in many market segments. Magistral can help in Pitchbook support in various ways such as:

Enhancing Service Requirements:

Provide tailor-made services as per the needs and requirements of the customer. Taking into consideration of various stakeholders and employing various recommendations provided by them.

Data Management:

Cleaning and filtering out the data and ensuring that significant information is showcased in tandem with the graphical representations. Employing various data metrics and collating information as per the client’s requirement

Compliance and Research Management:

By merging information from internal, external, and third parties, we have a strong knowledge of the opportunities and challenges facing your firm. Insights on markets, categories, competitors, and consumers that we have carefully chosen will help your commercial and marketing teams make better strategic decisions with respect to compliance requirements.

Analysis and Execution:

We have a dedicated team of experts for handling respective operations for creating a Pitchbook. Having exposure to diverse fields and expertise in handling various functions handling in an efficient manner.

About Magistral Consulting

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates, and Portfolio companies. Its functional expertise is around Deal origination, Deal Execution, Due Diligence, Financial Modelling, Portfolio Management, and Equity Research.

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The article is Authored by the Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to  prabhash.choudhary@magistralconsulting.com

Introduction

The Sourcing Strategy is a process of data gathering, expenditure analysis, market research, negotiation, and contracting. In the 1980s, General Motors started employing systematic strategic sourcing. It strives to establish long-lasting, cooperative relationships with suppliers, who are seen as essential value partners. To ensure that the organization’s demands are consistently and effectively satisfied, the customer-supplier loop is evaluated at every point in its lifespan. Therefore, strategic sourcing is a lengthy process that requires qualified employees, effective technology platforms, and tools for execution.

Strategic Sourcing is becoming more common as digital transformation changes supply chain and procurement procedures. Analyzing what an organization buys, from whom, for what price, and in what quantity is required. The primary justification for purchasing a strategic sourcing suite, according to Gartner’s Magic Quadrant, is to transform sourcing within the company (74%). Businesses’ top motivations for engaging in strategic sourcing were greater significant savings (61%), and higher efficiency through automation (65%). A better understanding of supplier marketplaces can help companies identify potential risk factors and develop sourcing strategies to mitigate them.

Depending on the business, supply chain expenses, which primarily include transportation and procurement, can vary from 50 to 70% of sales. Therefore, investing a lot of effort in creating your organization’s strategy is essential. You may accomplish desired results and maintain alignment with corporate objectives by routinely assessing your sourcing strategy. A detailed grasp of a company’s business strategy, the resources needed to execute that plan, and the market dynamics and specific risks involved with managing techniques are necessary for successful sourcing.

The size of the worldwide supply chain analytics market is anticipated to reach USD 22.46 billion by 2030, showing a CAGR of 17.6% from 2022 to 2030 in a recent analysis by Grand View Research, Inc. As the need for handling massive amounts of corporate data and its insights for strategic applications develops, supply chain analytics is becoming more common.

Benefits of Sourcing Strategy 

It, as we all know, simplifies business operations. Some of the benefits are listed below:

Benefits of Sourcing Strategy

Benefits of Sourcing Strategy

Better Cost Savings:

Organizations may save money by having a legally established and well-defined sourcing strategy. You might start by choosing a few vendors who provide the best value. You may bargain for cheaper unit costs when making large purchases. Finally, the investment considers outside variables, such as market circumstances, optimizing earnings, and providing a competitive advantage.

Reduction and Mitigation of Risk

To mitigate potential hazards, strategic sourcing employs a cost-focused methodology. Businesses may do quality, financial, supply, and customer support risk assessments by looking at suppliers’ overall amount and value. Maintaining good ties with your suppliers might help you stay one step ahead of potential supply chain disruptions.

Continued Room for Improvement

It demands that the strategic sourcing procedures be continually assessed and revised. It is a constant cycle of improvement. As a result, they are allowing managers or executives to pinpoint problem areas and develop solutions around them. It also enables stakeholders to decide with confidence on matters like the future evolution of the business model, taking advantage of market possibilities, and maintaining competitiveness.

Enhancing and Identifying Ideal Suppliers

Strategic sourcing emphasizes profiling suppliers by assessing their core competencies and concentrating on the purchase cost. Through this method, businesses may identify the providers that best meet their needs for the maximum value creation or addition at the most affordable price.

More solid supplier relationships

Businesses set the groundwork for trust when they invest in improving their relationships with their suppliers. Companies may encourage their suppliers to deliver on the organization’s goals by including them in sourcing choices and making them feel appreciated.

Steps to Create an Effective Sourcing Strategy

Identifying and Classifying spending profiles

The sourcing efforts for each spending area will be prioritized with the aid of categorization. The criteria that better meet the needs of the business can also be devised, for example, direct vs. indirect spending. To assist in prioritizing and creating solutions in these situations, it is crucial to do a risk analysis of the selected spending categories.

Developing a Sourcing Plan

This entails determining the business unit needs that call for expenditure and setting goals, targets, and matching deadlines to meet the requirements. This calls for developing a communication pipeline so that all parties involved in the relevant sourcing initiatives know impending developments.

Market Study of the Suppliers

It examines the present and potential suppliers to comprehend and rate pertinent supplier profiles. It is necessary to investigate supplier market share to understand their position in the market, their level of industrial performance, and the threats and possibilities facing the supplier market.

Information Request to Supplier 

Request for information (RFIs), request for proposal (RFPs), and request for quotation (RFQs) from vendors is the next stage after finishing the supplier market research. It is crucial to convey the business’s specific requirements, as well as its end goals and performance expectations, to ensure that suppliers fully comprehend what the organization requires.

By identifying suppliers and carrying out the contracting process

This stage is to pick the suppliers that can provide the maximum cost savings while offering quality once the selection criteria have been determined. The contracting procedure begins to onboard the vendors after supplier selection for the pertinent sectors.

Evaluation and Regular Monitoring of Supplier Performance

Accurately assess how suppliers perform in comparison to the needs and goals of the company. It is crucial to monitor supplier performance regularly and pinpoint development opportunities. Organizations may use this information to evaluate supplier risks better and develop plans to minimize potential supply chain interruptions.

Principal Motivators for Automation of Sourcing strategy 

An Increase in Data Transparency

Strategic sourcing tools and platforms generate data on spending patterns, supplier performance, and supply chain risk assessment. This information, provided in reports, enables a comprehensive evaluation of all sourcing operations. Additionally, these discoveries may automatically start additional procedures depending on the business flow and legal environment.

Principal Motivators for Automation of Sourcing strategy

Principal Motivators for Automation of Sourcing strategy

Active Management

Automating the sourcing strategy procedures enables categorizing different expenditure activities using rule-based classification. Additionally, this procedure may be done in real-time, and the records will be updated immediately. As a result, you may have a single dashboard that shows the most recent, classified spending for the whole company.

Data-Driven Risk Evaluation

Every supply chain is prone to risks and failures in various ways. Businesses must be ready to respond to this risk, whether it manifests as interruptions, quality, or availability issues. An accurate risk assessment model is required to mitigate the harms brought on by internal and external threats, and an automated strategic sourcing method meets these criteria.

Greater Accountability

The flow of the sourcing process and any bottlenecks are shown on eSourcing platforms, which have a specified workflow mapped onto them. Greater accountability and improved compliance by all the parties involved in the sourcing projects are made possible by increased openness. 

Magistral’s Services on Sourcing Strategy

Magistral has extensive experience in research and analytics, which can aid in cost reduction through sourcing strategy. Some of the services are as follows:

Spend analytics:

Review expenditure profiles from the past and the future to find potential for supplier consolidation and tail spend optimization.

Cost and price analytics:

It guides informed judgments and creates scenario-based, predictive cost models and pricing estimates.

Supplier analytics:

Develop supplier sustainability scorecards, track supplier performance against Service level agreements, and create scenario models for bids and tenders.

Risk analytics:

Pay early alerts for category risks and supplier-related risk signals. With unique analytics that blends internal and external data sources to unearth hidden insights, you may advance your goal of digital procurement transformation.

Real-time recommendation:

Be a strategic partner to the company by recommending fresh, successful approaches to risk management, innovation, and cost reduction.

About Magistral Consulting

Magistral Consulting has helped multiple companies to reduce operations costs through its offerings in Procurement and Supply Chain.

About the Author

The article is Authored by the Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to  prabhash.choudhary@magistralconsulting.com

Introduction          

An Investor Profiling summarizes an investor’s financial goals, situation, time horizon, and risk tolerance. It can assist individuals in making appropriate investment decisions. How much risk one should be willing to assume is determined by an investor profile. For example, a more conservative portfolio may be suitable if someone needs to preserve their money and have a short time horizon. If someone wants to expand their monetary liquid asset (cash) and has a longer time horizon, a more aggressive equity-based portfolio may be appropriate. The most essential quality of an investor is temperament, not intellect quoted to Warren Buffett.

The first step in creating a wealth plan is to analyze the ability to take financial risks. Risk tolerance is determined by duties, objectives, personality, and various other factors. A risk profile is created to accurately understand an individual’s ability to assume financial risk as part of their investment portfolio. There are two crucial components of an investor’s profile:  risk appetite and risk tolerance. Risk tolerance is the amount of risk that a person’s finances can endure, whereas risk appetite is the amount of risk that a person is willing to take.

Importance of Investor Profiling

Risk Profiling is vital for an investor. Before investing in the market, one thing which usually troubles every investor is risk. People are concerned about losing their investment capital or receiving less than expected returns; nevertheless, the risk is generally a mathematical figure, such as volatility, that can directly impact your investment capital.

Each investor’s tolerance for market volatility will be different. This disparity is caused by various variables such as income, obligations, age, etc. The quantification of investor profiling is risk-carrying capability and capacity.

Investment decisions are made on the risk-reward trade-off that an investor is prepared to make in the face of precarious financial markets. It is critical to assess your financial position before making an investment. Take into account your financial goals, risk tolerance, and time horizon to help you determine the investments that are best for you.

Risk factors involved in Investor Profiling

The three major risk factors involved in investor profiling consist of Risk need, Risk-taking ability, and Behavioral loss tolerance.

Risk factors involved in Investor Profiling

Risk factors involved in Investor Profiling

Risk need

The amount of financial risk that someone, as an investor, can safely accept depends on their circumstances. An investor who may be short on funds during retirement and wants to sustain their monthly cash flow may need to take certain risks to achieve their end goal. As a result, risk requirement is about how much risk you “need to take” as an investor. This capability varies depending on their age and other things. For obvious reasons, the risk-taking capacity decreases as age increases. If someone has a target goal and can save according to that, then he will need an annual return. The rate of return will define how much risk one can need to achieve their target. During investor profiling, financial advisers must calculate realistic potential returns and market risk environment for all assets based on historical growth rates and the current market situation. Failure to accomplish a goal should motivate you to save more money or work for extended periods.

Risk-Taking ability

Risk Capacity refers to an investor’s ability to take risks given his existing and ongoing financial status. That is; his or her net worth in relation to liabilities, financial ambitions, and time horizon for investing. It has the potential to reduce exposure to growth assets. One such sub-factor is the investment horizon. For instance, if someone has five years to reach their objectives, one must invest in safer assets because growth assets have high short-term volatility. Risk capacity, or dealing with financial loss, might also influence risk-taking. In terms of liquidity, if the need for liquidity is low in the stage of capital accumulation, then the risk-taking ability is high and vice versa.

For example, if someone is receiving a pension or has a future income or assets to sustain, and their objective is not fulfilled, they have a higher risk-taking capacity than otherwise.

Behavioral Loss Tolerance

Behavioral Loss Tolerance defines an investor’s psychological capacity to cope with market swings. This covers the reactions and responses to various market conditions, such as a correction phase. Behavioral loss tolerance is measured by exams, interviews, and questionnaires and specifies the utmost uncertainty one can accept. The amount of awareness regarding items and their experience over market cycles is determined by financial knowledge and investor experience.

Higher ratings on these criteria imply that investors can progress to growth assets. Risk composure shows the likelihood of acting irrationally in response to a perceived crisis, leading to losses. A trigger-happy investor sells stocks at the first hint of a market drop, whereas the patient investor holds on.

A better investor profiling strategy is feasible when all three components are reconciled and linked together. The investor’s risk appetite cannot exceed the risk tolerance of the aim. Higher risk-taking capacity may be ignored when both the need and the behavioral loss tolerance are low. When risk-taking capacity and behavioral loss tolerance are Higher, a lesser risk needs may be dismissed.

Combining all of these factors yields a genuine risk profile, which should be used to establish a suitable asset allocation mix or strategy, which may require the assistance of a professional financial adviser.

Types of Investor Risk Profile

Conservative

The protection of capital is the main priority of the investor, and they are ready to take minimal risks in exchange for limited or poor profits. The possible asset allocation is equity of 0-10%.

Types of Investor Risk Profile

Types of Investor Risk Profile

Moderately conservative

The moderately conservative investors are ready to take on a little amount of risk in exchange for the possibility of long-term gains. The possible asset allocation is equity of 10 – 30%.

Moderate

Investors are willing to accept a moderate amount of risk in exchange for potentially larger long-term rewards. This type of risk profile is most secure for the investor. The possible asset allocation is equity of 40 – 60%.

Moderately aggressive

To maximize prospective profits over the medium to long term, investors are willing to take on a high level of risk. The probable asset allocation is equity of 70 – 90%. 

Aggressive

The investor is willing to take significant risks to maximize long-term prospective returns and is aware that a major portion of their cash may be lost. The possible asset allocation is equity of 90 – 100%.

Magistral’s Process for Investor Profiling

A risk profile indicates the level of risk that an individual is capable and willing to tolerate and accept. The risk profiling process usually starts with analyzing and discussing the investor’s circumstances and the goals the investments or portfolio should achieve.

Standard Process for Risk Profiling

Standard Process for Risk Profiling

Investors may have various purposes, they may never have thought about or stated their aims in this way before, and they may not be able to capture encapsulate in terms of quantity or time.

Magistral makes sure to entail and enumerate each and every detail related to the client’s needs, and risk considerations during the investor profiling. The process for investor profiling is as follows:

Define Goals

Here we understand what the goals of clients are, in both the short term and long term. Moreover, we also focus on the goals aligned with the current financial status. By having a broad picture, we can then pave the correct way in order to maneuver in the right direction.

Risk Profile Questionnaire

In order to understand the risk-bearing capacity and the willingness of the client to take risks, it is imperative to know the levels of risk exposure of the client. This is done by sending a “Risk profile Questionnaire” to the client. After, filling it out, our team of experts analyzes the questionnaire in order to ascertain the optimum risk exposure of the client.

Scoring the Questionnaire

By having the requisite filter channels, within each category of questions and taking into consideration of various factors, we score each level of questions in tandem with the client’s requirements.

Analyzing and Examining

Careful Scrutiny and analysis of the answers with respective weightage to the client’s needs. We make sure to understand the various needs of the client needs in order to make an optimum risk profile.

Summary Close

Careful Scrutiny and analysis of the answers with respective weightage to the client’s needs. We make sure to understand. While onboarding the client we also deliver a summary of the procedure and the rules of engagement with clients.

Conclusion

Investor profiling is required for determining the optimal investment asset allocation for a portfolio. Because risk appetite is influenced by psychological characteristics, loss-bearing ability, investor age, income and costs, and other factors, each person has a unique risk profile.

Magistral consulting can help you complete a quick risk assessment to determine which risk group you belong to. We can perform the entire investor profiling process and then use this information to determine what percentage of your portfolio should be invested in which asset class.

Why Magistral consulting?

-We provide an exhaustive investor database which is helpful in finding the right kind of investor and beneficial in filtering out the information in concurrence with the existing market scenario and also providing tailor-made support in tandem with client requirements.

-Magistral consulting ensures analyst support at every step of Investor profiling. We have a dedicated team of experts for handling respective operations. In accordance to the client’s demands and specifications, we offer customized services. Considering various stakeholders’ concerns and implementing their diverse proposals.

-We provide a service of target company profiling. It is crucial for us to meet the specific  expectations of our customers by recognizing their requirements.

-It also provides Marketing and Communication support. We have a proficient team having experience in a variety of sectors and indeed the ability to handle different tasks effectively. We make sure to understand each and every client’s needs in a comprehensive manner and provide tailor-made services in an efficient manner.

About Magistral consulting

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates and Portfolio companies. Its functional expertise is around Deal origination, Deal Execution, Due Diligence, Financial Modeling, Portfolio Management and Equity Research.

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The article is Authored by Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to prabhash.choudhary@magistralconsulting.com

Introduction

Before committing funds to private markets, due diligence for private equity outlines a potential investor’s procedure for evaluating an investment fund’s appeal, value, financial sustainability, and prospects. It is often performed by analysts and such specialists and includes gathering and processing information about a fund’s historical investment record, finances, and other aspects. A limited partnership’s decision to contribute capital to a fund is based on the findings of the due diligence process. Institutional investors often use sophisticated due diligence methods for all their public or private transactions, but due diligence in the private market presents different obstacles.

Challenges faced in Due Diligence for Private Equity

Although all due diligence processes have basic features, due diligence for private equity processes has obstacles which are explained below:

Challenges faced in Due Diligence for Private Equity

Challenges faced in Due Diligence for Private Equity

Private Data

Because the target firm is not publicly traded, there is little information about it available than otherwise, such as through its SEC filings. The businesses that fund managers usually prefer to invest in are not publicly traded, making it difficult to get all the information a transaction team wants to feel confident.

Third-party data scrapers

Third-party providers providing private market data have now been considered to help with Due diligence for private equity funds. On the other hand, some data sources are more dependable and valuable than others. Some companies offer financial performance statistics scraped from publicly available information, often confined to a summary. Furthermore, some data sets could be too tiny for investors to trust their accuracy. Investors should seek primary-sourced data from a third-party private equity data provider rather than from pitch books or elsewhere online when evaluating a third-party data provider.

A lengthy process

It is frequently both a manual and time-consuming procedure. Investors are increasingly turning to technology to speed up and streamline their due diligence procedures, ensuring that the best decision is made.

Different Strategy

As many private transactions seem to be financial instead of strategic — i.e., the private equity firm’s sole motivation is to profit from the transaction – the unique perspective. In this case, a private equity deal team may devote more time to the financial components of the transaction than to the managerial or commercial parts, requiring far more information about the company’s financial status.

Confidential Information Memorandum (CIM)

The company’s confidential information memorandum (CIM), a vast document that includes financial data, a description of the management team, and commercial specifics such as insights into the customer base, products, and competitors, is often used to drive due diligence for private equity. On the other hand, Smart private equity firms do not rely only on the CIM and double-check the data.

The Steps involved in the Process of Due Diligence for Private Equity

Various steps are included in the process of due diligence, these include the following:

Steps involved in the Process of Due Diligence for Private Equity

Steps involved in the Process of Due Diligence for Private Equity

Industry Due Diligence for Private Equity

The first aspect of due diligence for private equity is a detailed investigation of the target company’s sector. Understanding an industry takes time and based on how in-depth the private equity purchaser wants to go, the process may involve accounting, tax, and legal advisers analyzing the nuances of the business. During their sector investigation, private equity buyers may discover other intriguing target companies or decide that a related industry is better suited to their investment criteria.

Due diligence in the target company’s industry is a transaction-specific exercise tailored to the private equity investor’s requirements. Knowing the industry in which the target company operates, its competitors, and market trends are all part of the exercise. In such an exercise, the investor considers if the specific target industry is growing and how profitable an investment in that sector will be.

Quality of Earnings Assessment 

Although the financial portion of due diligence for private equity examines the same papers as any other due diligence procedure, it emphasizes the ‘quality of earnings.’ Separating extraordinary revenues and expenses from past income statements examines what the target company can earn on an ongoing basis.

By removing these remarkable factors from the financial figures, the private equity client should get a more realistic picture of how the company is expanding and how it is expected to continue. The ‘quality of earnings’ analysis can be as in-depth as the private equity buyer requires. It could, for example, include a worst-case scenario in which several of the target firm’s top clients cancel ongoing contracts and analyze the impact on the target company.

Legal Due Diligence for Private Equity

The deal team must be confident about proceeding before the firm invests time and money in legal due diligence for private equity.

Legal due diligence examines the legal ramifications of the transaction, in part to confirm the firm’s assumptions, validate that the firm is not exposed to unanticipated liabilities, and ensure that the firm is in compliance with all laws and regulations.

Legal due diligence for private equity deals should focus on the following areas:

  • The legal ramifications of a change of power at the target firm.
  • Regulatory constraints of the target company.
  • Agreements for exclusive supply or purchase.
  • Contractual agreements with current vendors, suppliers, and customers and how the transaction affects them.

Operational Due Diligence for Private Equity

Any private equity transaction aims to improve the target company’s operations and rise in value before leaving the investment after a set period. As a result, the deal team will work with financial and legal experts to identify all the prospects for value-generating operational changes at the target firm. Due diligence is learning about a manager’s internal processes to safeguard investors from losses caused by operational errors or, in the worst-case situation, fraud. With limited money and time, this can be not easy. On the other hand, Minor infractions might fuel larger ones and build a culture in which practices or norms are increasingly considered toothless guidelines. Investors can choose fund managers measured based on and clear idea of the necessary operational risks, improving the quality of their portfolios and avoiding potential reputational risk and economic loss.

Future of Due Diligence for Private Equity

Asset competition has been intense, and it is expected to continue. More investors are vying for a smaller pool of assets, and potential targets’ management teams are less capable or willing to devote time and resources to responding to diligence demands. As a result, due diligence for private equity companies is growing more complex as they increasingly analyze more data and look for ways to make purchases more efficient.

-Due to market conditions, private equity firms have had to reconcile risk mitigation and wealth development.

-More technology and analytics will be used, and more sell-side investigation.

Firms can do the following to fulfill the intention of making the diligence process much more efficient and digital:

-Utilize data and analytics technologies to generate quicker, more actionable insights by embracing digital diligence.

-Integrate sell-side diligence into their procedures the proper way.

-To the degree that it can underwrite investments, focus on value generation.

-Improve ESG diligence by collecting and analyzing data more consistently.

Magistral’s Services on Due Diligence for Private Equity

Magistral Consulting’s due diligence for private equity services ensures that an asset generates healthy returns. The services include:

Industry Research

With the acquisition target in mind, the target industry is examined for potential headwinds and tailwinds and short- and medium-term security and returns.

Due Diligence

A detailed corporate profile is created utilizing primary and secondary research to detect any risks.

Due Diligence Questionnaire

This service involves the preparation of due diligence questionnaire leading to further analysis with targets and investors.

Primary Research

Exploratory interviews with all stakeholders at the Target Company, including management, employees, ex-employees, vendors, and investors, are done to uncover any future liabilities.

About Magistral consulting

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates and Portfolio companies. Its functional expertise is in Deal origination, Deal Execution, Due Diligence, Financial Modeling, Portfolio Management and Equity Research.

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The article is Authored by Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to prabhash.choudhary@magistralconsulting.com

The Importance of Procurement

In any organization, the procurement department plays a vital role in the successful development of a product. The procurement department, whether related to the fast-moving consumer goods industry or retail, generally refers to the procurement of raw materials. However, the procurement department can be associated either with business continuity activities such as inventory purchasing or for business support like that done for the Information technology department. It is therefore evident that this resource needs effective management. This is where category management comes into play.

According to a study, companies that have successful category management programs have a mean lead supplier time of only 6 days vis a vis the normal time of 14 days.

Some key points associated with the global markets that are to be noted here are:

-Transportation and logistics activities account for 10-12% of global GDP.

-The United States is ranked tenth in terms of trade logistics performance.

-According to 50% of respondents, the transformative capabilities of technologies such as advanced software and AI have a significant impact on their performance.

-It is expected that by 2024, more than 60% of G2000 manufacturing organizations will use advanced technologies such as AI to cut costs by up to 20%.

What are Category Management and Category Intelligence?

Category management is a strategic approach to acquiring raw materials for manufacturing. While sourcing is all about making the right purchasing decisions, category intelligence assists an organization in making the right purchasing “yes” or “no” decisions. This not only aids in resource optimization but also cost reduction.

The term “category intelligence” is not new, but it is surprising that even after the introduction of best practices for category intelligence, category managers have failed to maintain effective category intelligence documents.

The image below illustrates four broad areas that an effective category intelligence system affects.

Category Intelligence in Supply Chain Management

Category Intelligence in Supply Chain Management

The Role of a Category Intelligence Manager

This is a specialized role in which a category manager is responsible for a specific function or category of goods or services, such as the purchasing department or stock maintenance units. The role could include a variety of responsibilities ranging from procurement to strategic sourcing, as well as developing a sourcing plan and reporting.

In general, these functions are becoming more specialized, with category managers increasingly requiring specialized degrees in their respective domains.

Process of Category Intelligence

Identifying opportunities, translating trends, understanding the factors, providing guidance, and understanding stakeholder needs are all steps in the category intelligence process. These are explained in greater detail below:

Process of Category Intelligence

Process of Category Intelligence

-Identifying Opportunities: This step helps to cut down the cost, reduce the risk of competitors and increase the efficiency of the organization.

-Translate major trends and industry events: The second most important step is to translate these events into an actionable strategy that can be broadly put into categories.

-Understand the underlying drivers: All the underlying factors must be understood completely to understand what will be their business impact.

-Timely Guidance: Time-to-time guidance is provided to reduce the risk in the long-term sustainability of the business.

-Understand evolving business needs and stakeholder demands: This is done to ensure that the strategies and approaches are fitting well.

How category intelligence helps

Intelligent procurement or having an effective category intelligence system can help an organization in several ways. Also known as intelligent procurement, it simply means managing all aspects of vendor spending in one central digital place so that one can have a holistic view of their spending.

-Access to market intelligence:

Sourcing managers will have to keep track of multiple sources of information in order to be on top of things. For example, procurement of food grains requires one to not only be up to date with the prices but also the prices in different markets, the supply and demand dynamics, and the cost implications of various decisions.

-In supplier selection:

Finding the right supplier for an organization can be a challenging task as it requires risk evaluation as well as things such as how reliable a supplier is. This can consume a considerable time as the search for the right supplier entail testing their services as well as making a decision on the long-term reliability of the supplier for an organization.

-Curbing excess spending:

A quick response to changing market dynamics is one of the core tests to check the effectiveness of an efficient procurement department. An effective category intelligence system helps curb any excessive spending by the procurement department by providing correct information and helping in making effective predictions and decisions.

According to a study random, unplanned buying can account for 30-45% of all indirect purchases while in the case of smaller organizations it can account for almost 80-90% of the indirect purchase.

Category intelligence reports empower the procurement department to better negotiate the pricing and terms of agreement with its suppliers.

-Assessing supplier performance:

Getting past data or historical information about the suppliers and establishing benchmarks to assess the performance of suppliers is a difficult challenge for any organization.

A good category intelligence system envisages correcting this situation by not only providing access to data but also benchmarking and forecasting. A good category intelligence report aids in listing KPIs and benchmarking data thereby assisting in effective supplier management.

-Tracking multiple sources of data:

Effective category intelligence helps in tracking multiple sources of data from several marketplaces thereby ensuring ease in information handling. Having an on-demand intelligence system helps with access to previously unknown sources of information such as market size, market potential, and supplier coverage for businesses seeking to grow. Such an intelligence system helps a company in taking care of decisions at a local as well as a global level.

-Time-saving:

Category intelligence systems not only help in cost savings for a firm but also saves considerable man hours required for gathering and processing data.

Magistral’s Services on Category Intelligence:

Our Category Intelligence services help clients stay on top of indirect categories like Marketing Services, Professional Services, Travel and Lodging, MRO, Information Technology, HR, Transportation, and Utilities, among others. Our insights help corporations build the right category strategy with significant cost benefits.

Our major service offerings are:

-Demand and Market Supply Analysis:

In this analysis, we make category landscape reports, create the demand drivers, identify major players and analyze through Porter’s 5 Force model of analysis.

-Pricing Movements and Forecast:

In Pricing movements, we study the various pricing strategies and perform primary research to obtain quotations and RFPs.

-Major Players and Profiles:

Major company profiles are identified and SWOT analysis is done on them to manage the risk of the companies.

-Negotiation Strategy:

In this analysis of pricing is done and also competitive analysis is taken care of.

-Newsletters:

In this service, newsletters are made, also the developments across the categories are tracked proactively.

-Custom Intelligence:

Here, we provide custom direct and indirect sourcing.

-Impact Assessments:

In this, all the events are assessed like Geo-political events, Natural disasters.

-Category Dashboards:

It is created to have a comprehensive view of category and impacting factors.

About Magistral Consulting

Magistral Consulting has helped multiple companies to reduce operations costs through its offerings in Procurement and Supply Chain.

About the Author

The article is Authored by Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to prabhash.choudhary@magistralconsulting.com

A Brief Introduction

Consumer and market insight report and analyze consumer behavior, information, and feedback. The comprehension and analysis of these insights assist adjustments to customer support systems and business development. Companies collect feedback using customer surveys, statistics, reviews, and focus groups to understand the underlying attitudes underlying consumer behavior and decision-making processes.

There is no formal definition of consumer and market insight, but it may be summed up as any measurement that can be utilized to observe and understand what customers think and feel. It might be their eye movements when viewing your page, how long they spend on it, how much they order, which options they choose, etc.; the list is endless. While certain information may be utilized alone to make a specific determination, marketers often use a variety of consumer insights to make their decisions.

Consumer marketing insights are also crucial when testing new initiatives within your company. You may learn from consumer insights how placement on the page, product details, SEO, and many other aspects affect your sales. Businesses employ consumer insights to understand their audience’s thoughts and feelings more deeply. Companies may better understand their customers’ needs and wants, and, more crucially, the reasons behind those needs and wants, by studying human behavior, which is likely to boost revenue and brand value thus.

Sector concentrating the more spending on market research 2020, by sector

Sector concentrating the more spending on market research 2020, by sector

Consumers today have virtually limitless store options and complete freedom over how they assess and interact with media and companies. In the wake of the COVID-19 epidemic, research has revealed that 81 % of consumers would continue reorganizing their spending this year, while 46 % of customers have experienced new expenditure restraints.

Benefits of Consumer and Market Insight

Consumer and market insight has the power to create or destroy a marketing plan. This dependency on data monitoring has only increased across all businesses considering the COVID-19 outbreak. Businesses and consumers are switching to a digital-dominant strategy enabling more precise insight measurement. Consumer insight may help determine the characteristics your consumers are seeking and find demands that your rivals are still not meeting. Social media and search engine trends might be helpful in this regard. To stay informed about what your target audience is searching for, you may set up alerts for movements and rivals.

This takes us to a further advantage of consumer insights: They provide a detailed picture of how you may compare your company to others’ businesses in ways other than sales and revenue. You can see how you compare to your rivals on various business-related terms regarding search engine rankings. 71% of consumers expect companies to deliver personalized interactions. 3/4 will switch if the customer doesn’t like the experience, so it’s vital to keep care of the customer experience.

Build effective category strategies that increase sales and promote sustainable growth by utilizing solid, impartial, and contextualized insights. Make quick judgments based on proactive information and forward-looking insights to stay one step ahead of the competition. Data and information make it easy to mitigate risk and identify strategic priorities.

How to get Consumer and Market Insight

Utilize social media analytics

According to a research survey, only 1.9 % of marketing executives said their businesses have the skills to use marketing analytics. With the popularity of social media as a tool for marketing, companies may communicate directly with their customers and discover their precise attitudes and responses to their offerings. Nowadays, many social media platforms have survey and questionnaire tools that can also give valuable information about consumer attitudes or behaviors. YouTube analytics, google trend and analytics, and google audience retention tools are the best source of collecting marketing insight.

Getting Consumer and Market Insight

Getting Consumer and Market Insight

Conduct surveys

Getting direct customer input is a terrific method to learn about the industry. Many businesses opt to do this by sending out feedback forms as soon as a client connects with or purchases their product or service. They may follow up later to obtain a more comprehensive customer experience analysis.

Access to public data

Because of the internet, businesses now have access to an infinite quantity of data, much of which is public information. When deciding on their marketing strategies, companies might utilize information about consumer buying patterns, financial situations, and the condition of their respective industries or economies.

Conduct market research

Focus groups are typically gathered as part of market research, a traditional method for businesses to collect data for market insights. These test subjects’ responses might offer valuable information about how the broader public might react to a particular product, service, or marketing campaign.

Customer feedback

Asking clients for feedback is one of the simplest methods to obtain consumer insights. However, there is a need for this. To guarantee that their customers feel comfortable sharing, brands must develop trust.

The impact of global consumers has changed

The transition of consumers to digital has increased significantly. Gen Z customers have created applications to discover extra food and purchase more goods online. People are preferably buying more on online sales or in big billion deals.

73% of Indian consumers return the product after shipment, so the company’s return policy should be easy to attract the customer and create trust. Myntra had 8 million orders during its end-of-reason sale in which 5 million buyers bought 4,636 brands. In the sale, 10 shirts were sold every second, 3 pairs of jeans were sold every second, and 17 sarees were sold every second, which signifies consumer behavior. Sales influence consumer behavior, those not in need also buy something.

44 % were undecided or made three or more assertions that they disagree with near shopping sustainability. A 23 % rise in expenditure across six or more categories was forecast by consumers worldwide. In the six months starting in April 2021 and concluding in September, 24 % of consumers worldwide do not anticipate increasing their expenditure in any category.

How to use Consumer and Market Insight

Set your goal

A list of questions and objectives is often where research starts. Determine the data type needed to finish your analysis before asking for input. Data on consumer demographics, corporate reputation, brand awareness, product issues, market rivals, and customer service initiatives may be included in the objectives for consumer insights.

Choose the research methodology

The research techniques you choose will depend on the information and results you are looking for. Data on consumer demographics and public relations may be found through focus groups and customer surveys. In customer evaluations and surveys, suggestions, and issues with goods, features, and customer service may come up. Pick the best approach to serve your research’s objectives and produce the most satisfactory outcomes.

Conduct research

Install data gathering technologies to compile information from sales processes and website visits or assemble participants and ask them to share their perspectives. Customers who respond to surveys and provide feedback frequently receive rewards from businesses. To gather information for analysis and determine consumer happiness, solicit and record consumer insights.

Analyze the result

You may find and visualize common issues, trends, and causes that arise among your customers by analyzing the outcomes of the data you collected. Create a graph or written report to summarize customer data and examine patterns like demographics, consumer behaviors, and product issues. Improvements and modifications that address frequent difficulties and feedback can be made using knowledge of the reasons and reactions that occur most frequently.

Apply changes

Consumer insight and market research are primarily used to develop and improve products that better fulfill the demands of consumers. Product development and marketing teams build solutions and work to answer customer complaints after collecting and evaluating the data. The organization’s understanding of customer service is demonstrated using these enhancements.

Why Magistral Consulting?

-Customer insight: Utilize tools like social media sentiment analysis, U&A insights, N.P.S. tracking, bespoke surveys, and more to stay current on consumer trends, requirements, and purchasing patterns to identify focus areas and create successful marketing plans.

-Market expansion: Receive timely, essential insights and evaluations of markets and regions to aid in partner selection, local market intelligence, understanding of shifting legal and regulatory environments, and developing successful ready strategies.

-Updated information: Proactively updates on recent and pertinent developments in your markets and categories will help you find new opportunities for innovation and growth.

-Expert insight: A comprehensive understanding of your company’s possibilities and difficulties by combining data from internal, external, and third parties. We have expertly selected insights on markets, categories, rivals, and consumers to assist your commercial and marketing teams in making more informed strategic decisions.

-Custom tools: You may create world-class category growth strategies fast and easily using pre-built templates and unique tools.

About Magistral Consulting

Magistral Consulting has helped multiple companies to reduce operations costs through its offerings in Procurement and Supply Chain.

About the Author

The article is Authored by the Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to prabhash.choudhary@magistralconsulting.com

Introduction

Inventory management helps the company to decide which and how many goods to order at a particular time. It is the process of purchasing, storing, and selling the stocks of a company. This means managing the process of inventory management from start to end, such as storing raw materials as well as finished goods, keeping them in a warehouse, and finally processing finished goods. It tracks inventory right from purchase to the sale of goods.

In short, it means having the right number of stocks, at the right place and at the right time.

A company’s inventory is the most valuable asset. In retail, manufacturing, industries, and other inventory-intensive sectors, a company’s raw materials, and its finished products are the core of its business. Inventory can also be viewed as a liability due to the possibility of spoilage, theft, damage, or changes in demand. It must be insured, and if it isn’t sold, it must be cleared at a discount.

The Objectives of Inventory management

To gain a better understanding of inventory management it is important that we understand what are the objectives which it seeks to achieve first. Given below are the key objectives of effective inventory management.

Objectives of Inventory Management

Objectives of Inventory Management

-Material availability: The main goal here is to ensure that all types of items are accessible whenever the production department needs them so that production is not hampered due to their unavailability.

-Improved customer service: Having the finished product available at all points of time so that even varying demands of the customers are met satisfactorily goes a long way in ensuring great customer service.

-Avoid waste: When there is no inventory management system in place, it is common for items to be wasted. In addition, theft can also be a major preventable complaint.

-Maintaining sufficient stock levels: Effective inventory management ensures that stocks are available at all points of time to the production department as well as the fact that retailers do not run out of stocks thereby ensuring efficient delivery.

-Cost-effectiveness: Cutting down on costs in terms of inventory hoarding ensures cost-effectiveness for the company.

-Cost value of inventories reduce: Regularly purchasing the stocks in bulk, can help in negotiations and getting discounts on the inventories.

-Optimizing product sales: It helps to determine the volume of the product sales. It helps in understanding the present condition as well as future consumption of the goods.

The Types of Inventories

Inventory has different classifications under different stages of the supply chain. Typically, there are four types:

-Raw materials: This refers to the raw materials which are then turned into finished goods. There are two types of raw materials:
    -Direct materials: These are used directly in finished goods, such as leather used in making belts.
    -Indirect materials: These are part of the overhead or factory costs, such as glue, tape, and oil, which can be considered indirect materials for the factory.

-Work-In-Process: The inventory that is being used by businesses to create the final goods, whether its direct or indirect inventory, is called Work-In-Process (WIP). For example, the packaging of a finished good is WIP.

-Maintenance, Repair, and Operations (MRO): Inventory is what is needed to assemble and sell a finished product but is not built into the product itself. For example, basic office supplies such as paper, pens, and so on.

-Finished goods: This refers to the finished goods that are available for purchase by customers. This category includes any product that is ready to sell.

The Techniques of Inventory Management

Inventory management techniques can be used to control inventories regardless of the size of the business:

Techniques of Inventory Management

Techniques of Inventory Management

-Bulk Shipments: This method states that the goods are cheaper when they are bought in bulk. This is done when there are high consumer demands. This technique has the downside of keeping the bulk shipments in the warehouse, which results in higher costs overall. On the other hand, it reduces the shipping cost and it works well with the staple goods having long shelf lives.

-Backordering: It refers to the decision of taking orders and receiving the payments in advance for out-of-stock products. It’s a desire for most businesses but can be a logistical nightmare for the ones who are not prepared. Enabling backorders, increases sales and it’s just like a juggling act.

-Just in Time: Under this arrangement, finished goods are made available at just the right time. This means that the supplies of raw materials arrive as soon as the finished goods are ready to be shipped. This technique thereby helps businesses meet consumer demand without overfilling inventory and incurring any holding costs

-ABC Analysis: This is a technique based on putting the goods into different criteria in order of high importance, i.e. A being the most valuable and C being the least. Not all products are equal in value, and more emphasis should be placed on more valuable products. It improves time management and resource allocation.

-Drop shipping and cross-docking: This method completely removes the cost of maintaining inventories. When you have a drop shipping arrangement, you can transfer the client orders and shipping details to the wholesaler or manufacturer, who then ships the product.

Key statistics and facts about Inventory Management

The below points highlight some of the key statistics about the global supply chain market.

-The global supply chain market is estimated to be $15.85 Billion.

-The global supply chain is projected to grow by a CAGR of 2%

–43% of small businesses in the United States do not track inventory or do so using a hands-on system

–The #1 cause of U.S. supply chain disruptions is random IT shutdowns which is approximately 68%.

-The average US retail operation has an inventory accuracy of only 63%.

–34 % of businesses have shipped an order late because they sold a product that was not in stock.

-Inventory losses cost an estimated $1.1 Trillion

-Prevention of stockouts can lower inventory costs by 10%.

-As of June 2019, US retailers are sitting on approximately $1.36 of inventory for every $1 sold.

-The number of private warehouses in the US has risen from 15,763 to 18,182 since 2013.

-The industry in the US has moved towards having smaller warehouses – from an average of 400,000 sqft to 50,000-200,000 sqft.

Magistral’s service offerings for Inventory Management

Capital tied up in inventory leads to requirements for higher working capital. Apart from higher working capital requirements, the non-moving list also leads to wasteful inventory carrying costs. Our services span from requirement gathering, ordering, delivery and maintenance to ensure you only carry the inventory optimum for your required performance.

-ABC Analysis: This includes inventory management strategies and the services related to working capital reduction.
–Inventory reduction: Working capital optimization as well as monetizing non-moving items are provided under this head.
–Ordering and Refill: In this minimum order quantity is calculated, also logistics cost optimization is done.

About Magistral Consulting

Magistral Consulting has helped multiple companies to reduce operations costs through its offerings in Procurement and Supply Chain.

About the Author

The article is Authored by the Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to prabhash.choudhary@magistralconsulting.com

 

 

Introduction

Supplier Risk Intelligence aims to reduce supply chain interruptions by hastening response to as many possible preset events. We now know that dangers in the supply chain can originate from anywhere. Although some risks occur more often than others, even those that seem less urgent might be harmful. These might include shifting market dynamics, rival companies expanding their market share, cutting costs, or changing consumer preferences. While checking margins, expenses, and quality, businesses must be adaptable and resilient. Customer satisfaction must continue to be a top concern, needing the ability to quickly adapt the supply chain intelligence to meet changing customer demands. No matter how little it may appear, a single supply chain disruption can affect any of these factors. Therefore, each organization that depends on others for its success must conduct a supply chain risk assessment. The main participants in the supply chain include suppliers, distributors, manufacturers, and retailers. Every part—from raw materials to parts and carriers—must function synergistically for the end-user to receive what they expected.

Factors involved in Supplier Risk Intelligence

Companies often undertake supplier risk intelligence tests to learn more about their suppliers, the risks they can present, and the risk management strategies they employ.

Factors Involved in Supplier Risk Intelligence

Factors Involved in Supplier Risk Intelligence

Regarding suppliers, there is no such thing as zero risk. Not everything is predictable, and every firm has its weaknesses—both internal and external. The goal of supplier risk assessments is to evaluate supplier risks with the company’s risk thresholds and show whether the suppliers are meeting expectations within an acceptable level of risk, not to exclude suppliers that pose any risk. Of course, in some instances, supplier risk assessments lead to a company needing to fire a supplier because there is no workable method to reduce that risk. As many businesses will attest, diversifying the supply chain enables better agility if a supplier arrangement is broken. It is vital to avoid any situations where businesses are forced to collaborate with a supplier that poses a severe risk to the company just because a replacement cannot be found. There are several factors involved in supplier risk intelligence.

Financial Stability

Businesses should create a financial risk score for each supplier using a credit bureau rather than a data source while trying to reduce threats to financial stability.

Insurance Management

Continuous monitoring is recommended for insurance management since it enables businesses to alert their management if a supplier no longer has sufficient insurance due to not paying a premium or canceling a policy.

Reputational Protection

Resources can also be used to protect one’s reputation. Prominent Supplier Risk Intelligence firms search more than 35,000 periodicals globally using adverse global media monitoring to look for reports about bad suppliers. Programs like these can help businesses in expecting lousy press.

Regulatory Compliance

Global watch-list monitoring and document validation are two methods for monitoring regulatory compliance issues. Regulatory hazards are among the concerns a corporation cannot control but should be vigilant about monitoring.

Cyber Security

Cyber security vulnerabilities are among the most significant issues businesses have been looking for help with Supplier Risk Intelligence firms. The ability to create a security rating, monitoring tools, potentially a security questionnaire, and the resources to gather and manage the information are all necessary for Supplier Risk Intelligence.

Document Management

Businesses should concentrate on document management to gather, organize, and authenticate any standardized document. Humans must review essential documents like insurance policies to ensure they are insured.

Social Responsibility

Verifying diversity, promoting sustainability, and analyzing anti-slavery and human trafficking issues should all be part of efforts to tackle social responsibility concerns. It is essential to build ties with suppliers who perform well rather than associating the business with those who do poorly on these metrics.

Health and Safety

Additionally, businesses must gather and manage data, including public safety and health statistics and other materials, to oversee their operations’ overall health and safety.

Processes in long-term Supplier Risk Intelligence

The most important thing to understand about supplier risk intelligence is that it cannot be completed in a single step. Various processes are needed to achieve it.

Processes in Long-Term Supplier Risk Intelligence

Processes in Long-Term Supplier Risk Intelligence

Documenting Known Risks

Mapping the supply chains for all the goods and services offered is the most effective method to start any risk assessment exercise. The goal is to understand each link in the supply chain and the risks. Create a risk registry for each supply chain the company depends on so that processes can be prioritized on what to watch. Any areas where risk is uncertain or the lack of data should be noted when finding and recording risks. To find out if these are unknown risks or if the suppliers need to be more forthcoming, they can flag them for further inquiry.

Creating a Framework

When conducting audits, developing a risk management framework is necessary after creating a risk register. Although the framework can be straightforward, it is vital to consistently evaluate the risks to the supply chain and business operations. Consistency allows prioritized actions based on the risk and harm they pose to the company. This strategy covers bases by enabling access to risks associated with the suppliers and the adaptability and readiness of the company to manage any problems.

Monitoring Risk

A strategy for ongoing and persistent analysis is essential once the risk management framework has been built and initial audits have been completed. Continuous monitoring not only serves as a reliable early warning system for foreseeable problems in the supply chain, but it may also strengthen the relationships with suppliers because they will know where to focus the mitigation efforts. Risk measurement and monitoring are now easier than ever, thanks to the development of digital supply chain visibility technologies in recent years. It is now possible to obtain real-time information while tailoring the metrics, watched according to the needs and risk tolerance. The latter can be beneficial if rapidly changing factors like the weather are being tracked because, for instance, a hurricane or typhoon could impair operations at a supplier’s plant.

Implementing Governance

It is excellent practice to ensure a governance framework to help review supply chain risks and continuously watch hazards. Companies choose internal champions to oversee each supply chain node as part of the supply chain governance strategy. When risk levels change, or mitigation is needed, each person would then collaborate with the suppliers to offer ongoing support and follow-up. Creating a governance board for the company that consists of the people in charge of the various supply chain nodes can be done. The governance board might meet regularly to update the company’s risk profile and forecast and assess the risk ratings related to the supply chain. The procurement and sourcing teams would receive help from these efforts since they always have the latest standards when creating questionnaires and other materials for onboarding potential new suppliers and partners.

Magistral’s Services on Supplier Risk Intelligence

Magistral’s Supplier Risk Intelligence delves more profoundly than just financial risk markers. They offer Custom insight dashboards and Flexible solutions to support the business, regulatory, and sustainability goals. Other services offered by Magistral on Supplier Risk Intelligence include:

ESG Scorecard:

This includes evaluating a supplier on 49 detailed ESG parameters and also preparing a carbon footprint for the client.

Compliance Monitoring:

This is the important step in compliance data collection, analyzing, and reporting it.

Dashboards and Visualization:

This consists of preparing risk dashboards and then highlighting the concerns associated, with the client.

Custom Research:

Risk Analysis is done on the customized parameters as suggested by the clients.

Risk Evaluation:

Quantification of the impact of potential risk is done here.

Supplier Monitoring:

This has newsletters, data collection, and reporting, vendor scorecards, etc.

About Magistral Consulting

Magistral Consulting has helped multiple companies to reduce operations costs through its offerings in Procurement and Supply Chain.

About the Author

The article is Authored by the Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to prabhash.choudhary@magistralconsulting.com

What is an Outsourced CFO?

In today’s outsourced and globally connected business world there are many functions of businesses that are being outsourced like accounting, payroll, operations, IT, and marketing among others. Unfortunately, not many companies are aware that finance as a function can be outsourced too.

Herein, comes the importance of an Outsourced CFO. An outsourced CFO is a financial expert who provides financial services on a part-time or full-time basis to companies. The role of an outsourced CFO is to provide strategic insights as well as provide expertise in areas such as formulating strategy or providing core financial services help. This includes areas such as support in finding cash flows, raising capital, implementing more efficient systems, or formulating growth strategies. Usually, outsourced CFOs have considerable experience performing high-level financial roles as they may have worked in corporate finance roles in other reputed organizations.

Why one should hire an Outsourced CFO?

Outsourced CFOs can lead up to 40-50% savings in costs. About 80% of financial services executives outsource or offshore some of their services.   Highlighted below are some of the top reasons for outsourcing this critical finance function.

Benefits of Outsourced CFO

Benefits of Outsourced CFO

-Currently undergoing growth – This is usually the case for companies that are witnessing a lot of growth. A common example could be growth related to the launch of new products or say when a company is entering a new market.

-Resolving key business challenges – This comes into the picture when a company for instance is trying to resolve challenges such as cash flow, cost cutting, or looking to improve operational efficiencies.

-Raising debt or equity capital – Outsourced CFO can be of great help especially when companies are looking to raise capital. They do so by assisting in strategy formulation for it, due diligence, and in raising capital in terms of debt or equity mix.

-Maximizing margins – By analyzing current spending and costs, the outsourced CFO can suggest improvements that can be made in spending.

-Need for an interim CFO – This normally is the case when there is a need felt to place an interim CFO, especially in cases where an organization is transitioning from one CFO to another or a need is felt to outsource an organization’s finance function simply because someone else can do it better.

-Taking advantage of consulting services- An organization can look to hire an outsourced CFO simply because they can do the task better.

How does an Outsourced CFO provide value?

We have already seen why companies should look forward to outsourcing their services to a third-party service provider. In this section, we will look at some of the key benefits that are provided by an outsourced CFO. It must also be mentioned here that there are cost implications associated with hiring a CFO. Smaller companies may not have the budget to hire a CFO. This means they can incur a lot of savings by outsourcing this function which can be at a fraction of the costs of the salaries that are paid to a CFO. Not to mention the availability of talent and global access to them without incurring many operational headaches. These talents are simply at a third company party’s disposal the benefit of which can be reaped by companies.

There are some of the other benefits which an outsourced CFO can provide. Some of them are:

-They help in financial planning and analysis by providing assistance in the form of budgeting, and forecasting future revenue or cash flows for a company.

-They can help an organization in assessing its strengths and weaknesses vis a vis competition.

-Help in designing complex business models which necessitate the use of techniques such as NPV and IRR.

-Help in analyzing spending and cost incurred by a company and thereby suggest improvements in cost cutdowns.

-Assistance with financial statement preparation.

-Assistance with yearly financial reporting.

Top 10 Outsourced CFO services

A question that arises naturally is what kind of services are provided by Outsourced CFO.

Listed below are the top 10 services –

Top Outsourced CFO Services

Top Outsourced CFO Services

-Financial Strategy – One of the key benefits of outsourcing CFO services is in designing a company’s financial strategy. These are designed both short term as well as long term.

-Forecasting – Forecasting for the future is one of the key functions of any finance division of an organization. Preparation of the details helps in planning an operational roadmap for an organization. It requires a strategic understanding of requirements, assessing current and future capabilities of a company, competition analysis, and mastery in building financial models

-Financial systems strategy and design – With growth, it becomes imperative for any organization to implement software and improve process that can match an organization’s growth strategy. An outsourced CFO can help address this pain point by redesigning systems and suggesting improvements in current processes.

-Budgeting – Managing budgets is one of the key functions of the finance function. Normally budgeting is done for a 5–10-year time horizon. Budgeting helps to plan spending and future revenues in great detail.

-Financial statement preparation – An outsourced CFO can help in preparing financial statements as well as interpreting their consequences. This is the most useful information for any organization.

-Raising capital – Here a person is introduced to a host of investors, people or organizations who can help a company in raising its capital.

-Capital structure – This is done by suggesting which would be a better route – debt or equity or a mix of both.

-Interim CFO services – This service is most useful to avail of in case there is a transition from one CFO to the next or in cases where low-cost outsourcing seems to be a better option.

-Cost cutting – Costs are an important factor in decision-making. Outsourcing its services to a third party can help in this.

-Complex decision making – This is especially true with companies where complex decision making is involved and which requires the knowledge and expertise of a person. Examples could be making models for Mergers and Acquisitions, management buyouts, etc.

How can Magistral help in providing CFO services?

Magistral offers Portfolio Management services for varied kinds of the portfolio of companies such as Private Equity or a Venture Capital fund. For all the investors who sit on multiple boards, it is a headache, to implement something in a company that worked in another portfolio company. The problem is more acute when all companies are in similar industries and are facing quite similar headwinds. Limited supervision time available to board members, unavailability of resources across companies, and implementation knowledge held in a single portfolio company, all play spoilsport. It’s like re-inventing the wheel every time for the same problem.

We help portfolio managers in centralizing their Marketing (mostly digital), Strategy (Fund-raising and Exits), and Finance at fraction of the cost required to have dedicated functions in each portfolio company, big or small. The off-shored extended team also ensures no knowledge is lost for similar projects across companies and multiple projects in multiple companies can run at the same time, prioritized as per the schedule of board meetings. Learning, of course, is cross-pollinated across projects.

Our service offerings for portfolio and other companies are:

-Strategy: Identifying add-on acquisitions and potential buyers, fundraising, exit strategy, growth strategy, and content marketing

-Analytics: Financial reporting and analysis, preparing dashboards, data visualization, text cleaning and mining, predictive modeling, KPI tracking, and web scraping

-Sales: List generation, CRM cleansing and management, competitive intelligence, and social media management.

-Financial planning: Budget preparation, forecasting, and competitive quarterly earnings updating.

-Procurement: Spend analysis, vendor identification and management, spend base cost reduction, category strategy, RFP support and procurement strategy.

About Magistral Consulting

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates and Portfolio companies. Its functional expertise is in Deal origination, Deal Execution, Due Diligence, Financial Modeling, Portfolio Management and Equity Research.

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The article is Authored by the Marketing Department of Magistral Consulting. For any business inquiries, you could reach out to prabhash.choudhary@magistralconsulting.com