Smart Intangible Asset Management

IP Analytics for Financial Leaders in R&D

02.
IP Analytics for Financial Leaders in R&D

IP Analytics for Financial Leaders in R&D

In today’s innovation driven economy, intellectual property (IP) is crucial for R&D entities. It provides a competitive edge and significantly impacts financial progress. However, often a financial leader looking to drive revenue growth does not fully leverage their IP. This is mainly because they lack the tools to decode IP management complexities. This lack of tools is detrimental as Gartner® research states, “By 2025, R&D organizations that use IP analytics to conduct continuous technology intelligence will be 80% more likely to outperform direct competitors in revenue growth (1).”

The Need for IP Analytics Software for Revenue Growth

As organizations grow, the decision making processes of IP and R&D teams often become siloed. This fragmentation leads to inefficiencies, duplicated efforts, and overlooked opportunities to safeguard valuable inventions. This lack of coordination is often seen as the norm. Many financial leaders, including CFOs, do not receive reports on the financial value created by their IP and R&D teams quarterly. This deficiency hampers an organization’s capacity to capitalize on its IP for strategic advantages fully.

IP analytics software addresses this gap by offering a unified and accurate source of information for both. It facilitates the streamlining of IP management processes and provides valuable insights into the organization’s technology landscape. Consequently, organizations and financial leaders can make informed decisions about their IP strategy aligned with financial objectives.

The Myth of Equal IP Analytics

Many financial leaders mistakenly assume that all IP has a 1:1 impact in terms of quality, validity, and value. This assumption is a far cry from reality. The quality, validity, and value of a patent, for example, can vary significantly, and these variations are crucial in determining the potential return on investment from each asset. The reality is that not all patents are equal. Some may have a groundbreaking impact on the industry, while others may only bring incremental improvements. Additionally, the validity of a patent can be challenged, leading to potential legal disputes that can diminish its value. Therefore, it is imperative for financial leaders to recognize these nuances and have analytics that point to the quality, validity, and value of each patent in their portfolio.

Key Analytics Financial Leaders Should Track

In a world where 96% of executives, as noted by Accenture, agree that managing intangible assets, like IP, is crucial for the success of high-performing companies, it is imperative for financial leaders to grasp IP’s strategic importance (2). This requires understanding not only the IP’s potential financial value but also its broader impact on the organization’s strategic vision, competitive standing, and financial objectives.

Valuations:

The monetary value of IP is foundational for making strategic decisions. This extends beyond assigning a dollar value to IP; it involves understanding the organization’s overall financial health and growth potential. With intangible assets estimated at a staggering $74 trillion—a tenfold increase over the last 25 years according to Franklin Templeton and Brand Finance—updated analytics on IP value are critical for a financial leader looking to drive revenue growth (3) (4).

Benchmarking Capabilities:

Active analytics that compare your portfolio against competitors and industry peers are essential for understanding your market position. This process includes identifying areas for improvement and discovering where you have a competitive edge. Forrester estimates that US companies annually miss $1 trillion worth of IP opportunities, underscoring the importance of benchmarking to uncover and capitalize on untapped opportunities (5).

Ratings:

An unbiased evaluation of your portfolio is crucial for assessing a patent’s value, quality, and validity. Having a regularly quality rating of a patent, for example, on a weekly basis, can be invaluable for a financial leader deciding whether to pay the upcoming patent maintenance fee.

Value Indicators:

Identifying the most valuable assets in your portfolio is crucial for a financial leader looking to drive revenue growth. Often referred to as ‘Crown Jewels,’ these analytics can highlight where the majority of an organization’s value is in their portfolio to focus management. In 1975, the S&P 500 market value of intangible assets was 17%, amounting to $122 billion. By 2020, intangible assets represented 90% of the S&P 500, equating to over $21 trillion in market value (6) (7). This underscores the importance of managing and protecting these key assets.

Competitive Landscape Reports:

Benchmarking the metrics mentioned above against competitors provides a comprehensive understanding of market dynamics. This involves uncovering potential threats and opportunities and gathering strategic insights for informed decision making.

Embracing these insights is not just about optimizing the IP management process; it is about redefining the organization’s strategic approach to IP. This aligns with the broader vision and impacts sustainable financial progress. By doing so, financial leaders can position their entities at the forefront of innovation and financial success.

Conclusion: IP Analytics for Revenue Growth

Photo of SIAM - revenue growth IP analytics tool

For R&D entities, intellectual property strategy is crucial for staying competitive and impacting financial progress. Financial leaders can play a pivotal role in this process if they understand the value of their IP portfolio and know what metrics their IP department should be reaching with advanced patent analytics software like IPwe’s Smart Intangible Asset Management.

Gartner® research states, “By 2025, R&D entities using IP analytics for continuous technology intelligence will outperform direct competitors by 80% (1).” It is essential for a financial leader looking to drive revenue growth to recognize the value intellectual property has. They must leverage advanced tools and technologies to unlock its full potential.

 


 

(1) Gartner, Market Guide for Intellectual Property Management Software With R&D-Specific Use Cases, By Svetlana Golden, Shradha Sapra, Published 22 August 2023

GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

(2) Accenture, Managing Intangible Assets is a Top Issue for Senior Executives, Accenture Survey Finds, Published 29 January 2004

(3) Franklin Templeton, Deep Waves: The Quiet Undertow of Intangible Assets, By Kim Catechis and Lukasz Labedzki, Published 24 January 2022

(4) Brand Finance, Global Intangible Finance Tracker (Gift™) — An Annual Review of the World’s Intangible Value, Publish September 2021

(5) Forrester Research, as referenced in The Real Patent Crisis Is Stifling Innovation, By Daniel Fisher, Published 18 June 2014

(6) Visual Capitalist, The Soaring Value of Intangible Assets in the S&P 500, By Aran Ali, Published 12 November 2020

(7) Ocean Tomo, Intangible Asset Market Value Study

Contact The SIAM Team
Smart Intangible Asset Management
IP Analytics
support@ipwe.com