They may consist only of words, numbers, sounds or pictures, but for a growing number of enterprises, works of intellectual property (IP) have become essential assets.
"As much as 80 percent of top-performing global companies’ market capitalization is driven by intellectual assets," says Gartner IP asset management analyst Debra Logan. And just as General Motors must manage its inventory of dashboards, wheel covers and seats, so must a publisher such as Simon & Schuster get a handle on its various book-related assets, including content, cover art and author photos. "We require a digital asset bank," says Senior Vice President and CIO Anne Mander.
Simon & Schuster, like other companies with gobs of mind-generated assets, needed a way to organize and distribute its IP. The company found the answer in IP asset management software.
Unlike standard asset management applications, which are primarily geared toward handling physical objects, IP asset management tools are designed to accommodate intangible intellectual materials that can be utilized in numerous ways and are often surrounded by a host of legal, financial and regulatory issues. And unlike ordinary document and content management programs—which let users find, access, share, reuse, distribute and archive information—IP tools provide a variety of other capabilities, such as legal status monitoring, licensing and royalty tracking.
Media companies aren’t the only ones that need IP management software. Companies in such diverse industries as pharmaceuticals, aviation and beverage production can benefit from the technology, says Jim Murphy, senior analyst at AMR Research. "A lot of effort [in these fields] goes into R&D types of issues," he says. "Pharmaceuticals, for example, need to do drug discovery." Clinical trials and related testing procedures generate lots of information that needs to be organized, managed and utilized by numerous enterprise divisions. "It gets pretty complicated," Murphy says.
Out with the Old
At Simon & Schuster, IP asset management software replaced a home-grown archival system. "We had a full-time archivist who basically policed it and made sure that everybody got the proper copy," says Mander. The publisher’s new Teams Digital Asset Management software, developed by Artesia Technologies, provides a centralized way to organize, manage and distribute book content, cover art, marketing materials and other collateral resources. The software also lets companies extend branding, promotion and comarketing by automating the sharing, licensing and distribution of digital assets and promotional materials.
Simon & Schuster began rolling out the "digital asset bank" across its various publishing divisions throughout 2001. The system works across platforms, providing a common user interface that helps more than 500 employees find and use the most recent version of various IP assets, even while those materials are still under development.
In this era of proliferating content delivery channels, Simon & Schuster has become more aware of its IP’s value. That wasn’t always the case. "When I first came into trade publishing, about eight years ago, nobody put much value on the content," says Mander. "Probably the only version of the printed copy was at the printers, if you were lucky."
In the not-too-distant past, with only rare exceptions, publishers forgot about a book once it had finished its print run. Today, with the arrival of e-books, print-on-demand and other publishing technologies, it pays to have content and related materials within easy reach. "What people used to do was order another copy of the physical book, scan it and send it off to whomever," says Mander. With its new software, Simon & Schuster can transfer books and related materials to a new medium without touching the hard copy.
IP asset management software lets editors, art directors, lawyers and others more easily access book assets and handle legal and financial matters. But for marketing staff, the software can work like an ordinary content management tool. "Our remote sales force has access to it," says Mander. "If they’re going to a customer tomorrow, and they want to pull together a one-off marketing piece, they can."
Although IP asset management’s benefits are obvious, it can be difficult to pinpoint an ROI. That’s because most of the technology’s benefits are aimed at boosting efficiency, which can be difficult to measure.
The cost of IP asset management software also varies widely, depending on a product’s capabilities, number of users and other factors. PLX Systems, for example, offers several modules for prices starting at about $20,000 per year. Halo Solutions’ IPDOX software, on the other hand, is available on an ASP model at annual fees starting at $1,500 for a license for one to 99 users. Still, users claim it pays off. "I’m sure that we’re more efficient, and we know we’ve saved money on physical distribution of hard copy materials," says Mander.
Besides allowing easier recycling of published works, IP asset management software can reduce costs by lessening the need to rely on external service suppliers. "For example, the author photos used to be held by an outside service," says Mander. "Now we have them in our digital asset bank, so we save money."
For example, NorthPole USA can track its own trademarks and patents for the first time using IP asset management software. "Before, we just relied on outside counsel to report to us on the status of the trademark or patent," says April Meng, a NorthPole intellectual property specialist. The company uses IPDOX to handle trademark and patent applications, administration and maintenance.
Another important benefit provided by IP asset management software is enhanced security. Assets stored inside filing cabinets or on desktop computers can easily walk out the door. By placing assets on a secure server, enterprises can ensure that confidential information remains protected. "It certainly helps me sleep at night," says Mander.
Given the specialized needs of their customers, most IP asset management software vendors focus on either specific tasks or vertical markets. Artesia, for example, offers versions of its Teams software tailored to enterprises including publishers, advertisers, broadcasters and government agencies. Applied Information Management, on the other hand, focuses its Harpoon software on TV and film distribution companies. The organization offers separate applications for accounting, program acquisition, advertising sales, pay TV and pay-per-view contracts, home video distribution, residuals payment processing and distribution licensing.
Several vendors approach the IP asset management market by zeroing-in on one or more facets of IP asset management that appeal to a wide range of enterprises. IPDOX software, for example, allows corporate and external attorneys, R&D managers, government clerks and other interested parties to view and exchange relevant information regarding the status of various IP assets. PLX Systems, meanwhile, offers several different software modules that are designed to handle an array of tasks. The company offers PLXware, a suite designed to provide portfolio management, valuation analytics, accounting, audit control, decision support and reporting tools for IP assets owned by various types of enterprises.
Regardless of the type of software used, involving users in the planning of an IP asset management system is vital to the project’s ultimate success. "The best thing we ever did was to recognize that it couldn’t be an IT-driven project," says Mander. Simon & Schuster, with the help of consultancy Accenture, interviewed scores of its employees, ranging from top management to end users, to arrive at a comprehensive vision of what the system should include and how it should operate. "To make real use of these products, you’ve got to have the users embracing it," says Mander.
Gartner’s Logan feels that a successful IP asset management implementation requires a partnership between IT and the enterprise divisions that will use the software. With a patent management application, for example, close cooperation between a company’s IT and legal units is critical. "You can’t actually see the benefits if you’re an IT department unless the lawyers are able to tell you what they are, and the legal department wouldn’t necessarily be able to understand how the technology could help them unless it was explained by IT," says Logan.
Perhaps the biggest challenge facing IP asset management software users is getting the property into the system and keeping it organized. "It requires an awful lot of manual labor to be able to sort through all this stuff," says Logan. "Automatic classification software makes mistakes, so you still need at least some degree of human editing." (For more about data classification, see "Sleuthing Out Data," May 1, 2003.)
Enterprises must also take the time to train employees and business partners in the software’s use. "It was very difficult in the beginning to get people to grasp the concept because it was new," says Mander. "We had some people complaining that we were making their lives more difficult." Most of these individuals have since reconsidered their views and now believe that the technology is "pretty cool," says Mander.
As more enterprises begin to comprehend the potential value they have locked up in their intellectual assets, IP management software should grow increasingly popular. But this will happen only if CIOs recognize the technology’s power, says Martha Amram, an IP consultant and author of Value Sweep: Mapping Growth Opportunities Across Assets. She believes that CIOs, already comfortable with tangible business operations, need to take a proactive role in helping their organizations gain added value from what are essentially ethereal IP assets. "There’s an intangible flow going on in your company," she says. "What are its IT needs? It’s up to the CIO to make the call." n