Managing and measuring the intangibles to tangibles value flows and conversion process: Romanian Space Agency case study

Abstract

PurposeConverting knowledge or competency into long‐term business value is, in practice, a far more difficult process than in theory. While developing and implementing knowledge or competence management solutions, companies experience difficulties in measuring the contribution of their intangibles to business results and, what is more critical, companies fail in their efforts to reproduce the conditions and the processes that have unlocked the value creation potential of their intangibles. Building and maintaining large skills inventories, designing complex intranets, keeping large terabytes of knowledge or implementing performing document‐management systems and other technology solutions, do not necessarily lead to an improved cash flow stream. It simply brings inefficiency and leads to limited value creation as most of these solutions fail to identify the value‐creation patterns or prove the link with organizational performance. What value‐contributions bring these terabytes of information to the production process, or to the sales process or to a cash flow stream? This paper seeks to address this issue.Design/methodology/approachThe paper uses a case study to describe an approach and a methodology to identify and record the value flows (value‐adding sequences) among knowledge, competencies, partnerships and operational systems and processes, and to measure their contributions to the overall corporate value creation process.FindingsThe case study findings demonstrate that the use of the described methodology increased the knowledge base, reducing software implementation cycle time and increasing competitive advantage. Building a strong knowledge base has freed up 20 percent of consultant time and reduced the competence development time for new employees.Originality/valueThe paper presents and demonstrates a methodology that can help organization build and exploit knowledge bases more quickly.