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I am full of theory. - Senior consultant, AutoCont, Czech Republic, Mar 2011

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Yes - It's pragmatic, and contains a roadmap - Employee, Foresee, Belgium, May 2010

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Considering the final results the right hand side of the graph, we can see that over time the savings can be huge.

Enterprise Debt, like any debt, is not inherently a bad thing though. Used correctly it is a massively important Strategic Management tool. But like any debt, Enterprise Debt is only bad when:

      It is hidden and you don't know you are incurring it

      You don't know how you will pay off the debt

      You don't know the interest rate

      You don't know how long you will have to pay the interest

      ...all of the above.

When times are good, you can invest in reducing Enterprise Debt, which means when times are bad, you can lean on Enterprise Debt by allowing a controlled increase.

However, if you do not expose and manage Enterprise Debt your Enterprise Debt could already be too high to allow you to ride out the bad times. If you max out your credit card, how will you be able to fix your car when the exhaust falls off?





 

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