The Official Blog of Acuity Knowledge Partners

Utilizing Consulting Skill Sets for Value Maximization in a PE Outsourcing Engagement

Published on January 28, 2015 by Rahul Jain


India has always been a frontrunner in the global outsourcing industry, starting with the IT outsourcing wave in the 1980s, followed by the business process outsourcing wave in the 1990s and the current knowledge process outsourcing (KPO) wave, which started at the turn of the 21st century.

Each of them witnessed a common underlying theme of starting with a volume-driven play and evolving into a value-driven play. In line with this theme, KPO vendors have been adopting innovative delivery models to climb up the value ladder and achieve sustainable differentiation. An illustration of such adaptation at Acuity Knowledge Partners (also the focus of this blog) is provided below; it explains how our leverages consulting skill sets to drive value creation for its private equity (PE) clients.

Understanding the opportunity

Private equity firms are not new to KPO services, with several engaging with KPO vendors to scale their research capabilities while controlling costs. Traditionally, PE clients have outsourced research-intensive activities at each stage of their investment life cycle to KPO partners while retaining core decision-making in-house or engaging strategy consulting firms for additional insights and recommendations. However, these consulting engagements significantly drive up costs for these PE firms, and hence create opportunities for us to design highly cost-effective solutions that mirror consulting offerings.

Devising a tailored solution

Management consulting firms combine industry expertise with a set of functional capabilities (referred to as “consulting tool kit”) to add rigour and structure to their analyses, which eventually culminate into generation of insights and recommendations. Over time, we have incorporated some of these consulting skills into our outsourcing set-up for PE clients to augment traditional KPO skills of business and financial research in order to create a value-maximizing outsourcing relationship.

Analytical thinking extends our core skill of meticulously executing a research task following client instructions to the ability to adopt a hypothesis-driven approach – proactively brainstorming what analysis to conduct in order to generate insights for clients and, in turn, what data sets to research that would facilitate the analysis.

Work structuring extends the traditional project management principles of scoping and following it religiously to the ability to break an ambiguous problem statement into smaller problems, which may be addressed sequentially or in parallel (e.g., issue tree) that together would help answer the client’s overall question

Communication extends periodic written and oral project updates for clients to an interactive client-engagement model, wherein there is a two-way exchange of ideas, for example, for fine-tuning a project approach, interpreting findings and/or arriving at conclusions.

Problem solving extends our core skill of researching information, ensuring accuracy, relevance and exhaustiveness, to the ability to adopt a holistic approach and strive to synthesize findings and relate them to a broader objective in order to proactively conclude what the next course of action should be until the overarching client objective is met.

The key outcome of incorporating “consulting tool kit” into our PE outsourcing delivery model is a unique organizational capability to serve clients at both ends of the complexity spectrum: volume-driven and value-driven. This has enabled us to emerge as a cost-effective one-stop shop for a much wider range of services for PE clients, and also helped us position ourselves as strategic partners for PE clients rather than being a traditional outsourcing vendor.

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About the Author

Rahul co-manages a large private equity team at Acuity Knowledge Partners and leads strategic projects across funds and portfolio companies of the client. He has over eight years of experience, and focuses on target due diligence, industry analysis, opportunity assessment and portfolio growth strategy. Prior to joining Acuity Knowledge Partners, he worked as a management consultant with Strategy& (formerly Booz & Company). He has over two years of consulting experience, working with clients across geographies and in multiple domains including telecom, technology, infrastructure and consumer products. His consulting engagements included commercial due diligence, long-range strategy, profitability turnaround and business process transformation.

Rahul holds an MBA in Finance from the Indian School of Business, Hyderabad, and a Bachelor of Technology in Computer Science and Engineering from the Indian Institute of Technology, Roorkee.

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