Thursday, December 16, 2021

Innovativeportfolioofinvestment

The investment management presents the value proposition as an “asset under construction,” identifying where budget, talent, and other resources & assets are focused vs. neglected.


With the fast pace of changes, there is a danger of not having a proper investment management process to "develop and nurture" business potential and performance. 

Corporate management needs to broaden their investment perspectives, leverage emerging trends, weave the business “golden thread” for accelerating growth by linking business strategy to investment goals or business benefit, enabling business change and strategy implementation.



Defining investment portfolio strategies to make smart investments:
Running a business, either an energetic startup or a well-established organization, is about solving problems, with continuum. It’s important for the management to clarify what investments you should direct more assets to by identifying and evaluating investments in a way that solves problems with priority, driving business value in terms that business stakeholders understand. Venture capital management usually do not have a single or small set of assets, they have a number of potentially diversified portfolios. Each portfolio has goals and metrics unique to that portfolio.


It’s also important to understand that there are both opportunities and risks in every investment, making an objective assessment of the investment portfolio by asking: Are they diversified? Who are the prospective customers? What impacts can they make? How to improve the investment portfolio’s value? Etc. The logical investment scenario helps an organization assess whether the business improvement associated with emerging trends is the right investment to be done in the first place, and ensure the expected return on investment. The management needs to ensure that they are investing in the right business initiatives and create headroom for innovation and business growth.

Assessing the relative maturity (risk, value, strategic importance) of each investment portfolio: Businesses need to make investments and improve return on investment by articulating what the pros and cons of each investment option are for today and the proposed tomorrow. Ensure visibility into each investment is established to provide ongoing investment health information as well as enable understanding overall portfolio health. It’s also crucial to evaluate the impacts of investment decisions by presenting a "strategic" look to maximize the business's benefit from their investment. The management needs to continue to make an objective assessment of their investment by thoughtful check-up:

-intended objectives, financials, and risk profiles in the portfolio

-abilities to move ideas through their life cycle to achieve first to market

-portfolios agility to anticipate and respond to changing market conditions

- availability of talent with entrepreneurial experiences, technical skills, and business savvy.

-analysis of total cost, total value, and total impact


Total impact and total value should be what needs to be defined:
There are both opportunities and risks for every investment. What opportunities are you currently missing? In order to make the investment portfolio executable, an organization needs to make sure that enough resources are available to deliver the programs, talented professionals are put in the right positions, the processes are goal driven, flexible, and also manage the interdependencies of the business initiatives via an effective framework systematically. Integrate idea management with portfolio management tools to ensure the ideas go straight from platforms into specialized systems or tools to help them recategorize and integrate the portfolio of business initiatives for enhancing strategic focus, and accelerate business execution.

In practice, make a seamless alignment with company strategy; make an objective assessment of market/revenue growth; potential growth opportunity or market entry; make precise identification of objectives that the initiative will support. Evaluate each of the variables from the perspective of the original value - the value that was assumed when the idea/initiative was prioritized; current value - the value that considers the current scenario with the current costs; projected value -the value considering a conservative scenario according to what you expect in the future.

Do not confuse the means with the end. The success of investment is usually based on how they enable business growth and support the business objectives by delivering services and solutions in time to the market perspective. The investment management presents the value proposition as an “asset under construction,” identifying where budget, talent, and other resources & assets are focused vs. neglected. All investments and meaningful business activities should strive to build tangible business capabilities to achieve ultimate business goals.



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