FRONTIERE EFFICIENTE

L'Efficient Frontier, traduit en français par Frontière efficiente est une méthode dérivée de la théorie du portefeuille financier pour déterminer, à partir d'un ensemble de propositions de projets, le portefeuille de projets optimal (c'est-à-dire la sélection des projets) qui maximisera la valeur pour l'organisation à chaque niveau d'investissement ou de ressources disponibles.

 

Très peu d'entreprises peuvent se targuer de disposer du type de ressources ou du budget d'investissement nécessaires pour s'engager dans chaque proposition de projet viable qu'elles identifient. Une question clé de la gestion de portefeuille de projets devient donc : comment sélectionner les projets dans lesquels j'investis, de manière à maximiser la valeur que j'en tirerai, compte tenu de mon budget d'investissement / de mes ressources limitées ?
 
La théorie de la frontière efficiente vise à répondre à cette question.

 

 

 

What is the Efficient Frontier, and how do I trace it?
 

 

 

Why use the Efficient Frontier?

The Efficient Frontier helps answer some important questions:

  • With my current level of budget, what is the best selection of projects to maximise the value of my portfolio?
    The one on the Efficient Frontier for my current level of budget.
  • What is the minimum amount of investment I need to obtain a specific level of returns?
    The cost of the portfolio on the Efficient Frontier for the level of returns that I need.
  • Given our current portfolio, are we over-spending in regards to the expected level of returns?
    How far away are we from the portfolio on the Efficient Frontier for the level of returns we are at?
  • If we decide (because of political reasons or other) to select a sub-optimal set of projects, how much are we over-spending or how much value are we leaving on the table?
    We are over-paying by the difference between the cost of our selected portfolio, and the cost of the portfolio on the Efficient Frontier for the same level of returns.
    We are leaving on the table the difference between the returns of our selected portfolio, and the returns of the portfolio on the Efficient Frontier for the same cost.
  • Considering our current portfolio, is there a way we could obtain more value with a lower level of investment?
    Can we change our portfolio selection so as to inch closer to the efficient frontier?

In addition, the visual nature of the Efficient Frontier helps create a different perspective by helping managers and decision-makers understand the relationship between the value created by the portfolio and the costs incurred, and better measure the trade-offs entailed by the decisions they take.

 

The Efficient Frontier method is particularly useful for industries or business models where:

  • projects require very large investments, especially at the beginning of the project or program
  • the benefits will be realized several years down the road, and / or
  • projects are seldom killed

because it builds the optimal portfolio before the projects are started. So this method is particularly used in the pharmaceutical and biotech, aerospace & defense and chemical industries.