According to business strategist Dr Alan Rae, it has been calculated that only 15% of the value of a company appears in the balance sheet. The rest is intangible value, which lies in four main areas:
- Knowledge in people’s heads – skills and tacit knowledge.
- Formal intellectual property rights – copyrights, patents, trademarks, brand equity etc.
- Customer-related information and relationships.
- Business processes. We can include in this the knowledge and systems that comes from interacting with other organisations.
If all of these are coded and formalised, then a financial justification can be made for the value created in the company.
So how can you code and formalise these areas? One way is to turn them into software applications, and the other is to record them. Your intangible value will be recorded in the policies and procedures, in people’s knowledge that is captured and documented.
This means the better your content strategy and content management systems are, the more in control of your business’s intangible assets and intellectual property you’ll be.