Advanz

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Enterprise Value Enhancement

 

The intellectual assets of a corporation are typically three to four times the tangible book value. With roughly 15% of the US workforce employed in the information sector today, the knowledge industry represents more than 33% of GDP and generates more than 50% of all corporate profits. Knowledge has essentially become the primary ingredient of whatever is made, done, bought, sold or transacted. With this trend, value creation in the enterprise is becoming increasingly dependent on "knowledge productization", which in turn is driven by knowledge activity. Growth, therefore, can be achieved only through increased knowledge activity.

An analysis of value creation in publicly listed companies revealed that only 2% of major corporations grew total shareholder returns by more than 33% per year during the last decade. And, less than 1% of all companies grew earnings by more than 50% per year over the past five years. While market valuations are a reflection of the potential of an enterprise as perceived by the market, the only way to drive market values over time in a freely competitive market is through incremental knowledge activity and its effective integration.

Enterprise value enhancement (EVE), an emerging area in the knowledge management domain resulting from the convergence of business performance management, business intelligence, live human interaction and their appropriate integration with business processes, is aimed at improving the fundamental value creation capability of the enterprise - and thereby enterprise-wide business results and enterprise value.