Vista Equity Standard Operating Procedures Manual Template

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Vista Equity Partners Standard Operating Procedures
Vista equity standard operating procedures manual template microsoft

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By Hugh MacArthur, Graham Elton, Daniel Haas and Suvir Varma

High asset prices and less confidence in market beta to lift returns in recent years have greatly narrowed the margin of error for private equity firms to deliver acceptable returns. Some general partners have looked back at the past decade of trials and errors to identify lessons and patterns that will shape their next approach to value creation. They have drawn up playbooks consisting of detailed, sequenced actions taken over time to maximize value from each investment.

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The application of a playbook to a target company will depend on three factors. The first is the industry, as specific cost bases and capabilities have more or less relevance to individual industries. Manufacturing optimization clearly looms large in the chemical industry, and marketing and branding figure prominently in consumer products.

The second factor is the investment thesis: A playbook suited to a target company that has solid operations and is poised for growth may not work with a bloated company in distress. Third, the playbook should accommodate the target’s strategy to move the business forward. Companies competing in the same market can have very different strategies, and strategy determines where a PE firm can cut costs and where it should double down on investment.

Given these factors, PE firms with the most highly developed playbooks today tend to define their deal sweet spots narrowly. They may focus on investments in a single industry or on businesses across industries but with similar investment theses and opportunities for creating value.

Vista Equity Partners, which invests primarily in software and technology-enabled companies, applies a set of more than 50 proprietary standard operating procedures in areas such as product development, sales and marketing, customer support, professional services and general administration. Vista’s in-house consulting group works with investment professionals and portfolio company executives to apply those best practices. In a recent case, Vista sold TransFirst, a payment processor that Vista had acquired for $1.5 billion a little more than a year earlier, for $2.35 billion. PE Hub reported that Vista focused on building out TransFirst’s back-end settlement capability while enhancing its sales channels.

3G Capital has a well-defined playbook that applies zero-based budgeting to consumer products or retail companies. This differs from traditional budgeting processes by examining all expenses for each new period, not just incremental expenditures in obvious areas. A zero-based approach puts the onus on managers to justify the costs that need to be kept—a subtle but powerful shift in perspective from what should be removed. Teaming with Berkshire Hathaway to acquire Heinz, 3G eliminated roughly 7,000 lower-value positions and rationalized corporate and manufacturing footprints. 3G’s plays raised EBITDA margins from 18% to 26%. After aggressively expanding margins, 3G ran another play from its book, successfully merging Heinz with Kraft.

While many playbooks started with a focus on cost reduction, the most successful ones today contain a strategic blend of cost and growth moves. Cost cutting is no longer sufficient on its own to generate strong returns. To reliably create value and obtain the desired multiple upon exit, a portfolio company must be set up to achieve profitable growth over the long term.

Audax, for example, focuses exclusively on finding solid middle-market companies that it can transform, through add-on acquisitions, into market leaders. Since its inception, Audax has invested $4 billion in 101 platform investments and 534 add-on acquisitions, often in fragmented markets. In one example of its buy-and-build playbook, Audax bought Advanced Dermatology & Cosmetic Surgery, a US physician practice with a strong presence in Florida and Ohio. Some 40 add-ons and five de novo clinics later, Audax had built the business into a national platform and invested in centralized support services, resulting in expanded relationships with payers and higher clinic utilization rates. Since its initial investment in 2011, revenue quadrupled to more than $200 million, and Audax sold the asset to PE firm Harvest Partners in 2016, retaining a minority stake.

All PE firms want to create value as quickly as possible—to grow revenue and take out cost—and a strong playbook helps to accomplish that.

Read more: Global Private Equity Report 2017

Vista Equity Standard Operating Procedures Manual Template Sample

Hugh MacArthur, Graham Elton, Daniel Haas and Suvir Varma are leaders of Bain & Company’s Private Equity practice.

What is it: A Standard Operating Procedure (SOP) defines the key processes of the business and identifies who is responsible for various aspects of their implementation. They identify “What” is to be done and “When”, while referencing to level documents as applicable. An SOP is an agreed description of a stage or part of a process, which gives sufficient information for an existing or new staff member to understand what steps must be carried out, what inputs or supporting documents are required, and what outputs should be produced. The SOP is the third layer of documentation in a Quality Manufacturing System (QMS) as shown below:

Why use it: The benefits of Standardised Operating Procedures is that clear step by step major desisions are written down in a standardised concise wording where all employees have a clear understanding on tasks that are required to be carried out and by whom. The features of standardising includes safe systems of work, quality assurance and control, the movement of employee process elements to organisational documented process elements, providing the benchmark or baseline for all future improvement. The use of SOP's are a standardised work approach and is a disciplined approach, an essential foundation for lean manufacturing.

Well written SOP's provide:

  • Direction
  • Improve communication
  • Improve efficiency
  • Improve safety
  • Improve quality
  • Improve capacity
  • Reduce training time
  • Improve work consistency
  • Reduce variations in the process

The SOP development process is an excellent way for managers, workers, and technical advisers to cooperate for everyone’s benefit. Even if your company is not seeking official ISO 9000 certification, SOP's can still provide the same benefits - because your people will be doing their work 'the standard way' that is thoroughly documented and audited - so that your customers and investors can trust that your processes are under control - and more importantly, so that you can trust that your processes are under control.

Where to use it: A SOP will define the most efficient methods to produce product using available equipment, people, and material. SOP's depicts the key process points, operator procedures, production sequence, safety issues, and quality checks.

When to use it: An SOP will be used when work affects more than one function or department of an organization, the procedure will highlight who is responsible and what steps that must be taken to carry out the process.

How to use it: A typical SOP contains the following elements: A Header which shows the Title of the SOP, Original Issue Date, Revision/Review Date, number of pages contained in the SOP, who wrote the SOP, and the Approval Signature. Usable example of a SOP Header in MS Word.

  • Purpose and scope
  • Definitions
  • Materials and equipment needed
  • Safety concerns
  • Who is responsible
  • Step-by step procedure with identification and emphasis of 'critical steps'
  • Records to be kept
  • Copies of forms to be used
  • References

Vista Equity Standard Operating Procedures Manual Template Form

Each system SOP is viewed as the 'parent' document, which may have any number of 'offspring', or 'Work Instructions', which are created only when and where there is a need for more detail. Nn Work instruction is an orphan. Each can be linked back to it's 'parent' S.O.P. In general, SOPs force a person to think through a procedure step by step and to standardize the materials and methods. The exercise of writing the SOP is valuable and the SOP itself is a useful training tool and a reminder to staff of the correct procedures. The best approach to writing an SOP is to do it, write it, and test it. Be brief and succinct; the shorter, the better. Anyone - student, support staff, post-doc or principal investigator, can prepare them. The SOPs should be readily available.

The work procedures are usually completed by committed cross functional work teams and encourages contribution of experience, knowledge, accuracy and ideas for constant improvement.

Important Notes:

Vista Equity Standard Operating Procedures Manual Template Pdf

  • SOPs should be reviewed annually at a minimum.
  • SOP may also be applied across several Jobs, where a work instruction can usually only apply to one job.
  • SOP is any ordered way of doing an activity. A work instruction is a documented step by step, 'how to'.

Contents of template package: 1 * ISO Standard Operating Procedure Template Package (Containing the following procedures in a Microsoft Word document)

  1. ISO Procedure - Blank Form
  2. ISO Procedure - Contract Review
  3. ISO Procedure - Control of Nonconforming Product
  4. ISO Procedure - Corrective and Preventative Action
  5. ISO Procedure - Customer Supplied Product
  6. ISO Procedure - Design Control
  7. ISO Procedure - Document and Data Control
  8. ISO Procedure - Handling, Storage, Packaging, Preservation, and Delivery
  9. ISO Procedure - Inspection and Test Status
  10. ISO Procedure - Inspection and Testing
  11. ISO Procedure - Inspection, Measuring, and Test Equipment
  12. ISO Procedure - Internal Quality Audits
  13. ISO Procedure - Management Responsibility
  14. ISO Procedure - Process Control
  15. ISO Procedure - Product ID and Traceability
  16. ISO Procedure - Purchasing
  17. ISO Procedure - Quality Records
  18. ISO Procedure - Quality System
  19. ISO Procedure - Servicing
  20. ISO Procedure - Statistical Techniques
  21. ISO Procedure - Training

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