Typically 10% of a corporations’ assets are idle and or surplus. This means that millions of dollars of capital investments—in facilities, equipment and technology of all kinds—are at the end of their primary useful life. Changing market conditions, new manufacturing processes, corporate restructuring and new technology create idle assets that, without astute management, become financial liabilities and put pressure on the bottom-line. The pace of advancements in technology continues to accelerate this process. The more company profits are squeezed, the more successful corporations focus on recouping asset investments.
The decision options that companies face in managing these assets fall, in general, into three broad categories: (1) re-deployment/re-use, (2) selling or (3) disposal/discarding. Each one of these has it’s own set of critical issues that must be considered and planned for and managed carefully. Investment Recovery (IR) Professionals are charged with the challenging responsibility of managing the rocky landscape of surplus assets to maximize value and reduce risk and liability for the company in final disposition. In addition to requiring an incredibly diverse range of knowledge, to be successful, IR professionals need qualified service providers and resources in a wide variety of business channels to assist them in their efforts.
Decision Sequence to Maximize Recovery Potential and The Value Chain.
Reprinted from ASSET 2.0, the Investment Recovery Business Journal, Vol. 5, 2006