In the past, the sources of competitive advantage were work and natural resources, and now, the key to building the wealth of nations is knowledge. Drucker, 1993
What are we talking about, when we talk about Intangible Assets?
Intangible assets have their origin in the knowledge, skills, values and attitudes of people, these intangible assets are called Intellectual Capital. The capacities that are generated in the organization are intangible assets, when the resources begin to work in groups.
The organization's intangible assets, if properly managed and measured, become a source of sustainable competitive advantage capable of providing organizational value and translating into significant benefits.
The Knowledge Management and Intellectual Capital Measurement initiatives represent a very significant milestone in the transition from the Industrial Age to the Knowledge Economy.
"In this new economy, the resource par excellence is no longer traditional economic factors - land, work and capital - but knowledge, an asset that, despite not appearing in accounting, contributes significantly to the company's results" (one)
Intangible assets are a series of resources that belong to the organization, but which are not valued from an accounting point of view. The capacities that are generated in the organization when the resources begin to work in groups are also intangible assets, many people instead of capacities speak of processes, or organizational routines. Therefore, the knowledge associated with a person and a series of personal skills becomes wisdom, and finally the knowledge associated with an organization and a series of organizational capacities becomes Intellectual Capital.
Knowledge Management is, in short, the management of intangible assets that generate value for the organization. Most of these intangibles have to do with processes related in one way or another to the acquisition, structuring and transmission of knowledge. Therefore, Knowledge Management has organizational learning as its main tool.
Competitive advantage is only achieved through the investment of new knowledge and its generation from intangible assets such as research, skill development, continuous training and a growing mastery of information technology. It shows us the transition to a world in which knowledge is the primary factor of production.
It is evident, therefore, that every organization must continually create new products or services to maintain its competitiveness in the market, which is why the knowledge necessary to maintain this rate of innovation is becoming the key to success, be it economic or management.
An important element and one that is being implemented more and more in organizations is the management of intellectual capital. As intellectual capital is the main source of wealth for organizations, it is entirely logical that their management should pay special attention to the effective management of such intellectual capital.
Once we have introduced the concept of Intellectual Capital, we can redefine the concept of Knowledge Management in a more precise way: a set of processes and systems that allow the Intellectual Capital of an organization to increase significantly, through management of its problem solving capacities efficiently, with the ultimate goal of generating sustainable competitive advantages over time.
Thus, the ability to identify, audit, measure, renew, increase and ultimately manage these intellectual assets is a determining factor in the success of companies of our time.
In this sense, the search for methodologies and models that contribute to improving the management capacity of Intellectual Capital have made numerous efforts in recent years
From the innovation in management and the implementation of knowledge management systems within organizations, we can say that Intellectual Capital is an almost accounting concept.
The idea is to implement measurement models for intangible assets, commonly called Intellectual Capital measurement models. The problem with these models is that these intangibles cannot be valued using uniform units of measurement, and therefore, an intangible accounting cannot be presented as such. In any case, the Intellectual Capital Measurement allows us to have a rough photo of the value of an organization's intangibles.
The management of the organizational knowledge flows is key, according to what the general bibliography indicates, the organization requires an internal analysis in order to identify, develop, protect and deploy the resources and capacities towards the achievement of a sustainable competitive advantage. The organization must provide an adequate context for individuals to generate knowledge and this is integrated and transferred to become organizational knowledge. Professor Ikujiro Nonaka points out that the conversion of knowledge originates through the interaction between tacit and explicit knowledge during the processes of socialization (conversion from tacit to tacit), internalization (conversion from explicit to tacit), externalization (conversion from tacit to explicit) and combination (conversion from explicit to explicit)(two)
Intellectual Capital is the variable used to measure organizational knowledge. It is described as the intangible resources of an organization and is evaluated as the difference between the market value and the book value of the company. The essence of Intellectual Capital is to explain the company's future earnings capacity with a deeper, broader and more human perspective than that presented in the financial reports.
Intellectual Capital is made up of human capital (base value, value of relationships and potential value) and structural capital, that is, everything that remains in the company when employees go home, that is, information systems, bases of data, information technology software, etc. Human capital represents the knowledge, skill and ability of employees to provide solutions to customers. Structural capital is made up of organizational capital and users.
Organizational capital is, in turn, made up of three other types of capital:
1. Human Capital: This block includes both the competencies, understanding these as the knowledge, skills and attitudes that are currently found in each organization, such as the learning capacity and creativity of people and work teams. It is enhanced by developing the skills of people and work teams.
Within Human Capital, communities of practice stand out, which can be defined as a group of individuals who, by working together for a long period of time, those who by having shared practices also share rich experiences. Developing their own trust mechanisms, because everyone knows what each of them is capable of doing.
This nucleation of people working in this way is an important prop for the development of knowledge management. Libraries are organizations where Communities of Practice appear very clearly. Used fluently managing the flow of information, it allows these Communities to emerge as managers of intellectual capital, as knowledge of the organization itself.
What relationship exists with the subject of Knowledge Management? From the perspective of Intellectual Capital, Knowledge Management would be the set of processes and systems that are aimed at increasing Intellectual Capital. For this reason, we previously affirmed that: Knowledge Management has its main tool in organizational learning.
2. Structural Capital: knowledge must be systematized, explicit or internalized by the organization. Allowing a rapid transmission of knowledge, generating an upward spiral of knowledge and continuous improvement. It is enhanced by managing structured organizational knowledge as an asset, that is, managing for reuse all existing knowledge in the organization. For this, tools such as the Intranet, Databases, generation of histories, others are used.
3. Relational Capital: This block includes the ways in which the organization and the agents in its environment relate, such as users, suppliers, other libraries, etc. and that, as an intangible asset that is of vital importance for the information unit, it must also be measured and managed. It is strengthened by weaving and managing a network of relations with the exterior of users, suppliers and related institutions.
These three blocks that make up Intellectual Capital have to be measured and evaluated in order to see what needs and what contributions the organization can obtain, but the process is a complex set of measurements and scales.
Whether people possess the competencies required by the organizational system is a vital matter. It is on these capacities that the supply of value and competitive advantages in the markets are sustained.
The issue is that the old training paradigm no longer responds to new demands, in terms of the essential alignment of the development of personal skills to the strategic guidelines of the organization. On the other hand, awareness of the value of the intellectual asset centered on individuals imposes new practices where, among other things, the person must assume responsibility for the increase in her own capital. For this reason, organizational learning must be permanent and continuous.
The type of organization that absorbs, recycles, transforms and adapts knowledge has a learning culture, therefore, great individual and collective flexibility, allows for easy collection of information and dissemination of knowledge. In addition, active work is done on ways of working and directing, and on how to recognize and reward.
Libraries have two great advantages to get into this type of management:
They have as conventional functions: gathering, processing, disseminating, storing and using information (high training in the use of information)
One of the most notable strengths of Libraries is the degree of commitment and in-service training of their human resources.
The estimated values for tangible and intangible assets are relevant and significant for the purposes of the forecast yields and prices of the securities. The difficulties in the field of valuation and registration of intangible assets lie in their own characteristics.
An asset, according to The International Accounting Standards Committee, is a resource controlled by a company as a result of past events, from which it is expected to obtain future benefits. An intangible asset (E60 standard) is an identifiable asset that lacks physical substance. It should be recognized on the balance sheet whether future benefits that are attributable to the asset are likely to flow to the company.
To satisfy this criterion, the company should demonstrate the following:
- The expected way in which the intangible asset will increase the inflow of future benefits Your ability and intention to use the asset Availability of adequate technical, financial and other resources to obtain future benefits The cost of the intangible asset must be measurable easily.
How to value intangible assets?
According to International Accounting Standard 38 (3) - Intangible Assets, “an intangible asset is characterized because it is an identifiable asset, without a physical substance and that is intended to be used in the production or supply of goods or services, for leasing to third parties. or for administrative purposes. Likewise, this International Standard requires the organization to recognize an intangible asset (at cost value) only when:
- It is probable that future economic benefits will flow to the company. The cost of the asset can be measured "reliably".
The valuation criteria for intangibles indicate that those purchased must be recorded at the acquisition price, which includes the cost of the goods and the necessary expenses for their use. However, if the intangible is acquired for stock or in exchange for other assets, it is recorded at real, non-historical values, or at the value of the assets delivered in exchange, if applicable.
So that Intellectual Capital can become an almost accounting concept. The idea is to implement measurement models for intangible assets, commonly called Intellectual Capital measurement models. The problem with these models is that said intangibles cannot be valued using uniform units of measurement, and therefore, an intangible accounting cannot be presented as such. In any case, the Measurement of Intellectual Capital allows us to have a rough picture of the value of an organization's intangibles.
The accounting and preparation of Intellectual Capital Reports presents three main challenges:
- Requirement for better tools to manage investment in employee skills, information bases, and technological capabilities. Requirement for some type of accounting measurement that can differentiate between companies where intellectual capital is appreciated versus companies where this asset depreciates. the ability to measure, in the long term, the return on investment in people, skills, information bases, and technological capabilities of the organization.
Intellectual capital indicators
Why use indicators in the management of a Library?
- To monitor the execution and performance of work plans and programs Because it allows for correct decision-making It facilitates the strategic direction of the different areas It provides for self-evaluation processes To achieve more efficient management and actors committed to results Because democratic, participatory forms are involved and responsibility (control lines in each area) Improves information regarding the use of resources, in this case the creation of intangible assets.
Some parameters that we can propose are those defined by Edvinsson and Malone (6) who define five approaches for establishing indicators of intellectual capital: financial focus, customer focus, Process approach, Innovation and Development approach and Human focus.
| Financial Approach | Customer Focus |
| 1. Fixed assets ($) | 1. Transaction interaction, satif queries. (%) |
| 2. Fixed assets / employee ($) | 2. Number of actual / potential users (#) |
| 3. Income / employee ($) | 3. Number of teaching users / invest% total (#) |
| 4. Income / assets managed (%) | 4. IT accessibility (%) |
| 5. Income from paid services ($) | 5 Databases (%) |
| 6. Cost / employee ($) | 6 Marketing Production (%) |
| 7. Customer time / employee care (%) | 7. WEB sites (#) |
| 8. Computer spending / administrative expense (%) | 8. Number of Professionals in services (#) |
| 9. Added value / employees-informatics ($) | 9. IT resources / total resources (%) |
| 10. Investments in computing ($) | 10. Participation in operational decisions (%) |
| Process Approach | Innovation and Development Approach |
| 1. Administrative expense / total income (#) | 1. Transfer activities in the external Community and the Region (#) |
| 2. Processing time, disbursements (#) | 2. Competency / Employee Development Expense ($) |
| 3. Requests registered without errors (#) | 3 Creation of application software (#) ($) |
| 4. Total return compared to index (%) | 4. Marketing / customer spending ($) |
| 5 Personal computers / employee (#) | 5. Marketing expense / assets managed ($) |
| 6. Administrative / employee expense ($) | 6. Participation in training hours (%) |
| 7 Spending on information technology (IT) / employee | 7 Participation in development hours (%) |
| 8. IT expenditure / administrative expenditure (%) | 8. Index of Works presented in Congresses and publications (#) |
| 9. Administrative expense / total premiums (%) | 9. Use of evaluation standards (%) |
| Human Focus | |
| 1. Leadership index (%) | 6. Average years of service in the Library (#) |
| 2. Motivation index (%) | 7. Number of professionals (#) |
| 3. Insertion index in the medium (%) | 8. Professionals with postgraduate and / or specializations (#) |
| 4. Number of employees (#) | 9. Research areas (#) |
| 5 Employee training (%) ($) | 10. Innovations applied in processes (#) |
The indicators presented are merely illustrative, each unit of information can adapt them to suit your organization. Apply them on the area that you consider convenient.
The measurement of management indicators, which in strict logic, should be part of the integral process of Strategic Planning, must involve in a democratic and participatory way, all the members of the Library, involved in the production of a service or function, therefore, its development and implementation should benefit both its producers and its recipients.
IN CONCLUSION:
The new society poses new requirements. An information culture that tends towards innovation must be acquired and maintained, because the “Knowledge Society must have professionals who are“ informationally educated ”and this will pose important problems and challenges in the field of documentation.
Therefore, now more than ever, the key to success and organizational excellence is focused on people and their management. Libraries must realize that, beyond technologies and processes, it is the knowledge and knowledge of their staff, increasingly trained, that bring added value to the organization.
Technology, customers and trained people are sources of continuous analysis and prospecting. Considering them as capital-knowledge, make these sources strategic resources of the organization.
The evolution goes through finding effective measurement systems but, above all, by implementing systems that convey information, generating new ways of understanding the Library and the role of the professional that facilitates this exchange of knowledge.
Traditional Libraries base their strategy on services and products, future libraries base it on knowledge and are defined as organizations that add value and create goods.
Traditional Libraries base their assessment on their tangible assets. The current Libraries measure their potentials considering their intangible assets, as a true way to measure their intellectual potential. Quoting Professor Viedma Martí (7), we conclude by stating that: “knowledge that generates value or Intellectual Capital is the key to the success of organizations that compete in the economic, political, social and technological context of our time, and their role in the future it will surely be increasingly relevant. ”
QUOTES:
(1) Patricia Ordoñez de Pablos (2002) Measurement and preparation of Intellectual Capital Reports: the challenge… http://gecon.es/
(2) Noaka, I., Takeouchi, H. (1995): The knowledge-creating company, Oxford University Press, New York.
(3) IAS. International Accounting Standard IASC (2000) "International Accounting Standards")
(4) the Good Model can be consulted at: ttp: //www.gestiondelconocimiento.com
(5) Bueno, E.; Morcillo, P. (1997): Foundations of economy and industrial organization. Madrid: McGraw Hill.
(6) Leif Edvinsson, Michael S. Malone, 1997, El Capital Intellectual, Grupo Editorial Norma, Mexico.
(7) José María Viedma Martí (2002) Knowledge management and intellectual capital
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