A company's intangible assets are assets that do not have a physical existence. Not only do they contribute to strengthening the internal competencies of companies, but they also represent real levers for competitiveness and stability of organizations. In this article, discover everything you need to know about intangible resources and the steps to follow to evaluate them.
Intangible resource: what is it?
The intangible resources of a company are its intangible assets, in other words its goods that are physically unattainable or impossible to apprehend directly. These are, among others, the skills and knowledge acquired by the company, the value of the brand, the company's capacity for innovation, the quality of the customer and partner relationship, the company's loyalty in its social and environmental commitments, etc. These resources are, so to speak, business elements that are difficult to evaluate and cannot be counted, but they have a considerable impact on the performance of a company.
What are the benefits of intangible resources?
The challenges facing small and medium-sized enterprises are numerous. These companies evolve in regularly unstable markets, often face intense competition, must adapt to the digital revolution, to numerous environmental, societal and territorial requirements, as well as to problems of well-being in the company and employee de-motivation. All these issues need to be solved and for which intangible resources are essential for VSEs and SMEs to understand and evaluate.
Intangible assets allow companies to assert their uniqueness in order to stand out from the competition, but also to consolidate the company by ensuring its coherence and social cohesion over the long term. Moreover, they help to reconnect with the meaning of work, to form coalitions to create value through cooperative ecosystems and to enhance a better governance model. Finally, these assets have the advantage of contributing to the sustainable development of the territory and of promoting the control of risks linked to the company's activity.
Material and immaterial resources: what are the differences?
Several properties distinguish intangible assets from tangible resources. Among these characteristics, here are 7 of the most essential:
- Intangible resources are not measurable and countable;
- Intangible resources can be developed according to the company's activity;
- They are not the exclusive property of the company;
- They are at risk of sudden and unpredictable degradation;
- They imply indirect results, but not proportional to the efforts;
- They are associated with the human dimension of the company;
- They depend on each other and act in an inseparable way.
How to understand intangible assets?
To achieve an understanding of intangible resources, there are three very important steps to follow:
Identify intangible assets
Unlike tangible resources, intangible assets are less perceptible. In order to identify them, one must carefully observe specific indicators and indices. In other words, special attention must be paid to events, weak signals, as well as to testimonies of people related to these resources.
Follow an inventory process
In order to clarify the intangible resources, it is recommended to use a reference system to order and list them. To this end, different types of classifications are available and adopted by XVAL consultants. Among these classes are: human capital, relational capital and structural capital.
By adopting one or the other of these classifications, the apprehension and therefore the valuation of intangible assets becomes less difficult.
Consider the interdependence of physical assets
Another essential point for successfully understanding intangible resources is to take into account the intrinsic link between each of them. This entanglement is due to the fact that they are linked to the human dimension of the company's activity, as well as to the relationships established between the various stakeholders. Consequently, it is impossible to make an absolute division of these assets.
How to properly value intangible assets?
In order to carry out a good evaluation of the company's intangible assets, it is necessary to rely on a system of evidence composed of well-defined indicators and indices.
The indicators
Whether quantitative or qualitative, indicators are elements that can be assigned to phenomena that can be observed over time. They are diversified in different categories: efficiency indicator, activity indicator, performance indicator, etc.
An example of an evaluation indicator is employee attendance or absenteeism (performance indicator).
The indices
Strictly qualitative in nature, clues are testimonies that cannot be singularly assigned to a phenomenon. They can be events, notorious or little known situations. For example, a power failure (common accident) and a loss of meaning at work (weak signal) are both clues.
A system of evidence to be developed specific to business evaluation
While the themes with the defined number and fields allow to create models applicable to all small and medium-sized companies, the evidence system, formed by indicators and indices related to a specific theme, must be adjusted according to the company assessment.
In concrete terms, the first thing to do during the company valuation process is to define the most relevant themes in relation to its development project. This is followed by the elaboration of a system of evidence, taking into account only those indices and indicators that seem most significant in relation to its specific features.
Finally, all the data or information obtained at the time of the evaluation of the intangible assets will make it possible to highlight the singularity of the company and, moreover, to carry out an evaluation of its website for example.
