Insight

Get the news, advice, and events from CSS Tec.

 

The Rise and Dominance of Intangible Value in the Age of Digital Commerce

As our world digitizes further and further by the minute, organizational intangible assets and value supersede classically tracked tangible assets as the new drivers of wealth growth and acceleration.

“It seems like our entire world developed intangibility through the COVID-19 pandemic as we dumped office space for remote work, brick-and-mortar retail for online shop therapy, and long commutes via plane, train, and automobile for quick strolls from our bedrooms to home offices. We’ve developed a desire for the digital, and our company valuations on asset investment followed.” Says Connie Testa, CSS TEC Managing Director.

Traditional tangible assists like cash, inventory, equipment, and physical workspace dominate GAAP (generally accepted accounting principles) and revenue analyses across companies and sectors, but digitization is revealing intangible assets the real value driver of revenue and long-term growth. We’ll look at the various intangible assets worth investing in and tracking as well as recent historical investment in said intangible data as it accelerates in our digital age of business. Before these critical points, let’s understand exactly what intangible assets are to an organization.

What are tangible versus intangible assets?

Classic tangible assets that almost always appear on a company’s GAAP balance sheet include – as stated earlier – cash, equipment, inventory, land, machinery, and receivables among others.

Intangible assets on the other hand are exactly that, intangible. These assets are much harder to quantify and thus end up on more expense sheets than added value reports due to their ambiguous added value. Everything from brand recognition to research and development teams fall under the intangible value umbrella. A major advantage of intangible assets versus tangible ones is the immediate flexibility and lasting impact that aspects like internal ecosystem networks and digital analytics offer.

Examples of intangible assets

While this is by no means an exhaustive list of types of intangible assets, it highlights those most popular under the umbrella of major intangible assets.

Research and Development – Also known as R&D or innovation capital, this intangible asset includes research and testing processes for new products as well as customer and market demand studies to steer product and service development in the right direction. Investment here allows for quick investment in successful product trials and quicker abandonment of failed ones.

Data Analytics – This includes meticulously farmed and organized proprietary data regarding internal system performance, customer behavior and buying patterns, and everything else an analytics team uses to create thoughtful forecasts.

Human Resources, Talent, and Training – HR and talent recruitment and training plant the seeds for dedicated, skilled employees. Invested time and energy in training on new systems, updating on market trends, assuring the physical and mental health and safety of employees among other human needs unify this pillar of the intangible value of people, often the most important asset of an organization.

Brand capital and Recognition – Brand recognition can be understood as a cumulative opinion of the buying market on a specific company tailored through market research, advertising, trusted product and service functionality, and more. This value can be the longest lasting of all intangibles but unlike the others cannot be flipped quickly as R&D or data analytics methodologies can.

How to foster intangible value growth

The beauty of intangible value and capital, once again, is flexibility and ingenuity. Here are a few growth methods for intangible value accrual you can apply to all five factors listed in the section above.

Build credibility with deliverable consistency­ – Reliable quarterly earnings forecasts, product and service performance, and other consistencies customers can rely on without fear of malfunction builds trust between company and customer, a value difficult to build and easy to lose.

A future to believe in – Steady profit reports are, well, steady, but a revolutionary vision excites and inspires new potential clients, customers, and investors looking toward the future beyond next quarter’s earnings forecasts. Market disruptors make waves, and progressive vision built on established trust is vital to intangible value growth.

Strategy investment – Connected to trust and vision above, add intangible value through a positive reputation by actually investing in the people and systems where you’ve promised growth. When marketing a potential new product, inject R&D teams with requisite funding for said product. When implementing a new internal CRM, invest in talent and training teams to get employees comfortably up to speed.

Build value through people – As revolutionary as a product is, an organization is nothing without competent, driven people and a set of systems to maximize their success. Capitalize on capabilities like:

  • Talent/Training
  • Agility
  • Leadership
  • Collaboration
  • Accountability/Recognition

To be the best, invest in intangibles

Over the past 25 years, investment in intangible asset growth has risen 29 percent points of a given company’s total expenditure, and the top performers are going above and beyond that median. Financial services and telecommunications grew exponentially in intangible investment, and even iceberg-paced sectors like utilities showed a clear distinction between the top grossers who invested in intangibles and the laggards who didn’t.

CSS Tec is here to add intangible value to your organization

To maximize your potential energy build of intangible assets for prosperous, long-term success, partner with the CSS Tec talent team privy to everything your organization needs to build intangible value across sectors.

About CSS Tec:

CSS Tec provides staffing solutions for employers across a variety of industries nationwide. Our unwavering commitment to quality, flexible delivery models, and ability to be process adept has positioned us among the leaders in the IT Staffing Industry. Our tenured team of Recruiters are committed to finding highly skilled resources dedicated to the technology domain.

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on email
Email