Cost Optimization Vs Investment Optimization

Hope the new year would have brought new paradigm in the pursuit of each and every one of the chosen domain and the personal life, so do the case with me.

Happen to run into few conversations rather than the discussion which I prefers to call with so called domain experts on cost and investments on random occasions.

Get to know there is a clear disparity in understanding leave aside the implementation, which is having its own nuances of implementation and result driving.

Let me decode in my view as to what those two exercises are how they are to be approached.

Cost optimization is a micro level articulation to achieve the best possible results in enhancing the value of the profitability of the given business, project platforms where the given scenarios are effectively implemented and utilized to gain value prepositions, not to read it as the getting as maximum profit at minimum cost. What I see this exercise as the reverse cost mechanisms which is in a way a very well borrowed concept from reverse engineering domain, where the activities or the sequences with associated results are relooked from end point in view say product or the service.

On the other hand the investment optimization, it has to be looked from macro perspectives from embarking on investments, the capital rationing, the optimum risk return profiling apart from numbers has to be well articulated, what results do the value enhancement will bring at raising the given investments over a period of time.

while the latter is a macro level articulation former is a micro or mid level articulations, keeping in view the what results or value enhancement to achieve, of course the period disparity plays a role.

In the later aspect investors and other stake holders are considered in a wholesome manner and the responsibility of delivering the results rests with the Board and the experts at the helm of management, where as the the former exercise, though originates from board or the C suite experts, it is mostly handled at the tactical segment, mostly monitored by the well defined metrics which is domain specific in nature.