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Maintaining intangible assets is critical for businesses of all sizes and in any industry. From a small company with a few employees to a multinational enterprise, organizations need to understand their intangible assets, their value, life cycles, transformations and their potential applications at different stages. Without this data of core assets, firms wouldn’t have the option to maintain their assets effectively, leading to waste as a substitute of timely profits.
This need has grow to be much more critical in the digital age, where knowledge-based SMEs drive the economy and the underlying assets are more intangible than physical. Every day we hear news of company acquisitions with astronomical dollar values, many of which rely on intangible assets akin to mental property and information. Intangible assets, unlike physical assets, are dynamic – they live, evolve and transform throughout their life cycle.
Maintaining intangible assets requires a robust, iterative management system to track their performance and ensure alignment with business goals. ISO 55001 provides a framework to support this goal, enabling organizations to strategically manage intangible assets for long-term success.
Digital enterprises and intangible assets
Business assets enable you to achieve a business goal. In fact, a business goal is an asset in itself when it leverages the capabilities of its stakeholders. There is a direct relationship between a business goal and the value of its supporting assets. As a business purpose uses the asset more, its value increases. Increased demand from a business goal can move a resource away from it.
Companies need appropriate competences and infrastructure to have the option to use their assets. Iterative and consistent mapping of intangible assets and business objectives is essential to ensure a timely understanding of their importance to each other. This continuous alignment helps organizations determine whether their evolving intangible assets proceed to support business goals and whether those goals proceed to have the ability to leverage the assets effectively.
This practice enables higher decision-making regarding asset transformation or optimization, ensuring sustainable value creation.
What is ISO 55001?
The dynamic nature of intangible assets requires a structured approach to asset management. ISO 55001 specifies requirements for establishing, implementing, maintaining and improving an asset management system. It applies to all kinds of assets and organizations, helping enterprises effectively manage assets throughout their lifecycle, improving value creation and supporting the achievement of strategic goals.
ISO 55001 provides a fundamental framework for structuring asset management practices. It enables organizations to initiate processes iteratively, from identifying business assets in the type of a portfolio to repeatedly monitoring and improving asset performance.
Intangible assets – evolution and transformation
Implementing ISO 55001 as an asset management system leads to predefined processes that might be initiated iteratively to discover business assets and ensure their continuous operation. These processes are needed for the proper management of intangible assets, because their nature is significantly different from fixed assets. Intangible assets evolve and their life cycle is marked by transformation. The iterative approach of the management system should enable organizations to understand this evolution and transformation.
To effectively manage intangible assets, organizations must first define their asset management goals through a strategic asset management plan. This requires a shift in pondering from a focus on physical assets to recognizing the dynamic and evolving nature of intangible assets.
Continuous monitoring of asset performance is critical to ensuring asset alignment with business goals. The query stays: does your asset performance still enable you to achieve your business goal? Intangible assets, unlike physical assets, may evolve to such an extent that the business purpose now not allows for their effective use. This evolution creates a need for transformation, potentially transforming an intangible asset into a salable product.
Complexity of valuation of intangible assets
The valuation of intangible assets is much more complex than that of physical assets. Their value needs to be determined based on their evolution and the business goals they will achieve at each stage of transformation. This complexity adds one other layer to asset management, making ISO 55001 a key tool for firms dealing with the challenges of managing intangible assets.
There are best practices that might be applied when valuing intangible assets inside a management system, as defined by organizations akin to the AICPA. These practices emphasize transparency, consistency and the use of rigorous methodologies. For example, following the AICPA fair value measurement guidelines ensures accurate assessment of intangible assets akin to mental property and customer relationships. These guidelines encourage clear documentation, regular reviews of performance and alignment with strategic objectives to maintain the credibility of asset valuations throughout their lifecycle.
Integration of ISO 55001 with other management systems
ISO 55001 follows a high-level Annex SL structure that allows seamless integration with other management system standards akin to ISO 20000-1 (IT service management). Because they share a common structure, organizations can more easily implement and manage multiple management systems concurrently, increasing management and governance efficiency. This allows for the unification of IT asset and service management practices, promoting higher control, risk management and continuous improvement across various functions of the organization.
ISO 55001 offers businesses a key framework for managing the unique challenges associated with intangible assets in the digital age. A structured, iterative approach ensures that these dynamic assets evolve in line with business goals, supporting value creation and long-term success. By facilitating continuous monitoring and adaptation, ISO 55001 helps organizations not only maintain, but also strategically improve the performance of their intangible assets, ensuring they continue to be a key driver of business growth in an increasingly knowledge-based economy.