Recognizing value from the intangible
IP is a foundational business asset that drives the majority of enterprise value today. Compared to tangible business assets, however, generating enterprise value from IP can present a variety of challenges based upon its form of legal protection and intended use. Business leaders must employ successful strategies to navigate all offensive and defensive aspects of their intangible asset holdings, including IP, as its effective management is directly correlated to increased enterprise value.
Even when the importance of IP is recognized, the emphasis has been on statutory IP such as patents, copyrights, and trademarks. In an increasingly digital world IP, such as trade secrets, proprietary know-how, unique processes, data, business relationships, and other “soft IP,” are equally critical as drivers of a firm’s business model. Many companies are not even aware of the full spectrum of these critical intangibles in their business; even fewer actively recognize and manage them. The under-appreciation of these assets not only impairs enterprise value but can also put a company at severe risk. Therefore, developing the organizational infrastructure, management process, and analysis capabilities needed to properly manage IP is imperative not only from a competitive perspective, but is a necessary component in maximizing investor returns.
- What's at risk
- Changing the perspective
- KPMG can help
What's at risk
Enterprise value can be negatively impacted if any of the following occur:
- Valuable assets remain unrecognized, unprotected, or uncommercialized
- IP management expenses are excessive, leading to decreased return on assets (ROA)
- Inconsistent IP management policies and procedures among business units, increasing enterprise value risk
Changing the perspective
Organizations should consider an enterprise-level approach to IP management that is based on the following:
- Embracing the critical role of IP as a business asset
- Establishing strategic and efficient processes to recognize and protect all firm intellectual creations
- Developing a rigorous IP management and risk mitigation framework
KPMG can help
KPMG helps clients transform IP management from a focus on legal rights to an ongoing, enterprise-wide framework that recognizes innovation and new creations, develops and secures assets, and converts IP into organizational and strategic value. This is accomplished via the services provided by our highly experienced consulting team and supported by our proprietary IP management technology.