Written By: Chris Holloway | 11/25/2017

CEB (Gartner) held a finance webinar on November 9th, 2017. It focused on Managing a Portfolio of Business Growth Investments. The webinar presented research on how world-class finance organizations are managing their portfolio of investments, and various aspects associated with managing growth investments.

Managing a Portfolio of Business Growth Investments is an essential part of strategic finance. If done right, finance has the opportunity to make sure the proper projects are properly funded. Likewise, Finance also has the ability to quickly eliminate investments in projects that should not be funded. This is a tremendous service Finance can offer to the business.

Selecting the right investments is critical to the company. Yet, in my experience, Finance departments often struggle with how they can best facilitate this.

As a result, most finance teams struggle with investment recommendations. They fall back on tracking metrics like spending trends.

Monitoring spending trends can help to control expenses. However, it is not a very good tool for selecting investments. That is because looking at expenses you are really only looking at one side of the value equation.

For instance, a low-value but also low expense investment could fly under the radar and receive funding. Meanwhile, an incredibly high-value investment can also be missed because it would result in an increase in expenses.

CEB identified 6 attributes of a balanced and organized growth investment portfolios as follows:

Imagine for instance, that you had in your portfolio of investment options a project that looked like this:

1. Very High Possible NPV
2. Very Low Strategic Alignment

This project is best left without funding. It probably will not survive long enough to realize the value creation.

Intel  was looking at its own investment options, and decided to develop its own TV Service. There was still a huge opportunity to create value in this market - many others have since proved so. 

Intel also has A LOT of engineers. They could have pulled off the technology.

But, the project was not in alignment with the strategy of the company.

Eventually, this project failed because of the bill it was racking up. The execs could not continue to defend this bill for a project that wasn't in line with its strategy. Intel should have had a better process in place to evaluate the project in the context of these 6 criteria.  

To help our readers improve their own businesses investment portfolios, we decided to create a FREE cheat sheet to assist you.

This powerful cheat sheet will explain Ardent’s five critical steps to fool proof investment decision making.  We hope you'll take advantage of this opportunity.