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Running head: WHITE PAPER EVALUATION OF THEORIES AND FRAMEWORKS FOR MANAGING ORGANIZATIONAL INFORMATION AND INTELLECTUAL ASSETS White Paper Evaluation of Theories and Frameworks for Managing Organizational Information and Intellectual Assets White Paper Evaluation of Theories and Frameworks for Managing Organizational Information and Intellectual Assets Executive Summary The present paper emphasizes on the growing importance of information and intellectual assets for the companies and the necessity to seek for seek reasonable approaches enabling companies to convert the intangible value of their information and intellectual assets into cost savings, revenue, and other tangible benefits. The paper provides an overview of business drivers and challenges for effective management of the companys information and intellectual assets, gives clarity to critical success factors in the adoption of efficient business solutions, delivers a recommended framework inclusive of the core capabilities recommended to be delivered over a five year period. The paper also outlines the statement of direct and indirect benefits expected from the implementation of the proposed model. White Paper Evaluation of Theories and Frameworks for Managing Organizational Information and Intellectual Assets Table of Contents The Increasing Importance of Information and Intellectual Assets Business Drivers and Challenges Facing Organizations The Effective Management of Organizations Information and Intellectual Assets Benefits and Gains from Implementation a Proposed Framework Conclusion White Paper Evaluation of Theories and Frameworks for Managing Organizational Information and Intellectual Assets The Increasing Importance of Information and Intellectual Assets Nowadays the companies acknowledge the growing importance of information and intellectual assets and seek reasonable approaches enabling them to convert the intangible value of their information and intellectual assets into cost savings, revenue, and other tangible benefits. While some companies heavily emphasize on their ability to protect their intellectual property, the other rely on their income obtained from it (e. g.
through licensing) as a relatively important source of high-margin revenues. However, despite the strategy the company adheres to, it is recognized that more and more of the company's future and current value is being ascribed to its intangible assets. Thus, according to the recent Gartner report, "By 2007, intangible intellectual assets will account for more than 90 percent of the value of the Global 2000 enterprise, up from 20 percent in 1978 and 70 percent in 1998. " (Company, 2004) Similar to this, a November 2002 McKinsey & Co. study affirmed that although 40 percent of technology and innovations companies could add about 10 - 20 percent to their operating income by better using intellectual and information assets, only few of them even reached the 0. 5 percent mark (Company, 2004). These findings bring additional evidence to the fact that the importance of intellectual and information assets cannot be underestimated, and the companies need to enhance their framework and decision making capabilities, and culture in order to convert their information and intellectual assets into tangible profits (Baruch, 2001; Davis & Harrison, 2001). Business Drivers and Challenges Facing Organizations As it was already mentioned, many organizations face difficulties to understand and maximize the value they derive from their information and intellectual assets.
This predominantly occurs due to lack of visibility into the information and intellectual property within their companies. Thus, for example, according to the estimated results, each year the U. S. business companies spend $ 1 trillion in patent assets (Brunsvold & Oreilley, 2004; Glazier, 1997).
Only few companies managed to extract at least a small part of their information and intellectual assets portfolios true value and are actively seeking to find new revenue sources utilizing their information and intellectual assets to get a competitive and strategic advantage over other companies in a highly competitive business environment. The organizations with large patent portfolio also face challenges due to high costs required for effective management of their information and intellectual assets. These costs include but not limited to maintenance fees, prosecution fees, and application fees, which are not obligatory and, therefore, may be cut with information and intellectual assets management solution, if implemented properly (Buyer & Simensky, 2002). Yet, the vast majority of business organizations acknowledge the potential in developing advanced technologies, decreasing the duration of innovation cycles, and streamlining the companys business processes. The Effective Management of Organizations Information and Intellectual Assets The effective management of organizations information and intellectual assets can be achieved through implementation of information and intellectual asset management solution.
The proposed solution will enable the companies to efficiently manage their assets, to derive as much value as possible, thus leading to the increased revenues (Goldscheider, 2003). For example, the companies may consider aligning its information and intellectual assets with business strategy (e. g. by reducing the companys patent portfolio, data mining, and unlocking new revenue sources). This step will allow the companies to reduce their maintenance taxes, thus leading to reduced annual costs.
The success of the companys business strategy will be directly related to its ability to manage information and intellectual assets. In such a way, there is a need to develop an effective information and intellectual asset model. In other words, the company needs to develop the ability to operationally derive value from its information and intellectual assets (Teece, 2002). The estimated duration of the proposed framework will take approximately five years with prolongation period, if required. The skills and critical success factors in the adoption of business solutions include but not limited to the capabilities such as information, technical and intellectual property subject matter expertise, business strategy, financial valuation expertise, process knowledge, etc. The efficient model should also imply the ability to develop a strategy and vision combined with the best practices in class processes, as well as creation effective information and intellectual asset model focused organization structure.
The proposed system supports decision making and processes required to create, manage, and utilize the organizations practices to its full potential, integrating such functionalities like licensing, patent searching, and docketing, to mention a few (Goldscheider, 2003). The proposed framework also implies sharing of information across the company or between businesses, thus enabling the company to manage its information and intellectual property by fully leveraging intellectual asset models strategic power. Benefits and Gains from Implementation a Proposed Framework If properly implemented, the model will allow the companies derive significant benefits, which can be symbolically classified as direct and indirect benefits depending on how the revenue and cost savings are associated with the enhanced information and intellectual asset model (Lerner & Poltorak, 2002). Direct benefits imply the broad span of the benefits providing a connection between the value and information and intellectual assets (e.
g. profits or revenue) (Davis & Harrison, 2001). Direct benefits are generally referred to as those having near to midterm payback periods. So, the companies will be able to identify assets, which are not being used within the company, easier, getting an opportunity to sell these assets, license them out, abandon or even donated and derive benefits from them through new revenue streams or cost savings. The enhanced document management, agreement and obligation management will allow to recover uncollected royalty revenue (Matsuura, 2003). The companies will also be able to significantly reduce their costs as they eliminate ineffectiveness in their current management processes.
The cost of implementation of the proposed framework will be financially justified by the end of the fifth year, or earlier. Indirect benefits, or the benefits associated with the vision or strategy, are more difficult to assess and measure, as these benefits usually need longer payback periods compared with the direct benefits (Lerner & Poltorak, 2002). They include but not limited to the added value due to enhanced strategic positioning, such as increase in information and intellectual assets quality, blocking of competitors, or increased market share, enhanced risk management, increase in return on research and development investments, support of intellectual property value extraction opportunities, and others (Goldscheider, 2003). Conclusion In conclusion it may be said that that the importance of intellectual and information assets cannot be underestimated, and the companies need to enhance their framework and decision making capabilities, and culture in order to convert their information and intellectual assets into tangible profits. By the end of the fifth year of strategy implementation, the company will be able to achieve better profitability.
The company will also strengthen and enhance its strategic decision making capability, and will enjoy the opportunity to manage the entire lifecycle of the information or intellectual asset. If implemented properly, the company will gain competitive advantage, reduce the risk of infringement and protect its current investments. References Baruch, L. (2001). Lev, Baruch. Intangibles: Management, Measurement, and Reporting. The Brookings Institution.
Brunsvold, B. G. , & Oreilley. , D. P. (2004). Drafting Patent License Agreements. Washington, DC: Bureau of National Affairs. Buyer, L.
G. , & Simensky, M. (2002). Intellectual Property Assets in Mergers & Acquisitions. New York, NY: John Wiley & Sons. Company, D. &. (2004). ROI: Proving the Value of Intellectual Asset Management. Retrieved April 4, 2008, from The Dennemeyer Leading Practices Series: web Davis, J.
L. , & Harrison, S. S. (2001). Edison in the Boardroom: How Leading Companies Realize Value From Their Intellectual Assets. New York, NY: Wiley. Glazier, S.
C. (1997). Patent Strategies for Business. LBI Law & Business Inst. Goldscheider, R. (2003). Licensing Law Handbook: The New Companion to Licensing Negotiations. St.
Paul, MN: West Group. Leif, E. , & Malone, M. (1997). Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower. Harper Business. Lerner, P. J. , & Poltorak, A.
I. (2002). Essentials of Intellectual Property. New York, NY: John Wiley & Sons. Matsuura, J.
H. (2003). Managing Intellectual Assets in the Digital Age. Artech House. Teece, D.
J. (2002). Managing Intellectual Capital: Organizational, Strategic, and Policy Dimensions. Oxford University Press.
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