Underestimating Intangible Values during Cost Cutting

Intangible Assets
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Peter Jetter
Coach, Germany

Underestimating Intangible Values during Cost Cutting

Intangible value is hard to measure. So often it is not measured. False conclusion: no measured value = no value.
I observe the following pattern:
- The primary method to increase profitability is reduce costs.
- Experienced experts are expensive. In my area the "products" created by them are intangible (e.g. competence).
- The value of intangibles is not measured in the same units as the costs (). So managers cannot do an easy cost/benefit calculation.
- Astonishingly this leads to the assumption, that intangibles have little monetary value.
Typically experienced (= long time) experts build an extensive network. Part of their effectiveness is caused by their networks support in
a) quickly getting expert consultation,
b) quickly reach a agreement + decision due to mutual trust and understanding
c) quickly getting small things done as personal favors (give and take!)
It is a common habit now to replace these experts with low cost resources.
And then the management is surprised, that profit decreases, despite of the reduced costs.


Lekan Akinwumi
Analyst, Nigeria

Training in Intangible Valuation Needed

Good opinion, but the value of intangibles can be worked out for better usage and to better apportio... Sign up


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