bengin the intangible evaluation the service version 2.0 draft, not for distribution bengin - the...
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bengin
The Intangible Evaluation
The Service
Version 2.0
Draft, not for Distributionbengin - The Intangible Evaluation – The Service V2.0_e.ppt
Index
• The new Business World
• The bengin.com approach
• The Benefit for the customers
• The MindSet: how does it work?
• Some examples from the market
• More ways to use the analysis
• Additional Types of analysis
Complexity of the new Business World rises and the Business Models have to reflect this
Valueto be
Mapped
Valueto be
Mapped
Business ModelBusiness Model
intangibleintangible
tangibletangible
newnewoldold T
Real Economy
We have developed new models for the classic and the new Business to deliver new solutions
Customized SolutionForm & Content
So
ftW
are
Application
Operating System
Hardware
Min
dW
areApplication
Business TheoryBasics
RootOracleSAPSAS
...
RootOracleSAPSAS
...
MicrosoftMicrosoft
E&YKPMGPwCAA....
B’ESystems
Partner b
Partner a
Partner ..
1. Structure
2. Quantity
3. Direction
4. Optimization
We developed the original know-how, the procedures and the instruments to analyze the new Business World and to find the needed Solutions.
We developed the original know-how, the procedures and the instruments to analyze the new Business World and to find the needed Solutions.
We concentrate on the evaluation of the total assets of a company, because.... „YOU CANNOT MANAGE WHAT YOU CANNOT MEASURE“!
2. Quantity
The total value of a company is the sum of its Tangible and Intangible Assets.
Only by managing the Tangible Assets
(money based) and the Intangible Assets (Knowledge, Skills, Market Position, etc.) the company can achieve their goals successfully.
Intangible Value
Tangible ValueT
ITotal Value
The Value Vector
Evaluating the Intangible, our customers can gain in various ways
Large, international companies, mid-sized companies and governamental Departments and Institution:
To analyze their current position and development over time To plan internal changes To plan mergers and acquisitions To plan spin offs and oursoucing To evaluate the market position (benchmark) To evaluate the productivity of various Business Units To evaluate new projects (integration in the company assets) ........
Investment companies and Venture Capitals:
To evaluate the potential of an investment (e.g. in a start up, etc) To plan the future „exit strategy“ ........
Start up companies:
To explain (calibrate) their own potential to an Investor To show the development over time of their own potential ........
Evaluating the Intangible, our customers can gain in various ways
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then...
Example 1 (same company, 2 times):
The SMV at time 1 and at time 2 are the same.The BSV 2 is though only half of the BSV 1. On the other hand the Intangible Value 2 is 30% higher the Intangible Value 1. Why?
• Purchase of patents?• Introduction of a new product line?• Other?
The company invested money (TangibleValue) to create the potential for the future (Intangible Value)
Intangible Value
Tangible ValueBSV 1
I 1SMV at time 1
BSV 2
I 2SMV at time 2
Intangible Value
Tangible ValueBSV 1
I 1SMV 1
SMV 3
BSV 3
I 3
Example 2 (same company, 2 times):
The SMV at time 1 and at time 2 are the same.The Balance Value 3 increased by 20% compared to the Balance Value 1. On the other hand the Intangible Value 3 is less than half of the Intangible Value 1. Why?
• Sale of a department?• Sale of patents?• Other?
The company transformed Intangible Assets into money based value (Tangible Assets)
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then...
If in example 1 it is NOT TRUE that.....The company invested money (TangibleValue) to create the potential for the future (Intangible Value)e.g. • Purchase of patents?• Introduction of a new product line?
If in example 2 it is NOT TRUE that.....The company transformed the Intangible Assets into money based value (Tangible Assets)e.g.• Sale of a department?• Sale of patents?
What happened then?
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then...
Intangible Value
Tangible ValueBSV 1
Int. 1
BSV 3
Int. 3
SMV 2Int. 2
BSV 2
SMV 1
SMV 3
What happened then?
• Maybe the company is just loosing good people: yes, there are less costs but....
• Maybe the company is spending too much on marketing....
• Maybe the people are not receiving any training: yes, there are less costs but any know-how in the new technology...
If the combination of tangible and intangible assets cannot be explained by the company`s strategy, decisions, actions......then we must look deeper. The causes need to be discovered in order to better manage the company
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then...
Intangible Value
Tangible Value
Int. 1
Int. 3
Int. 2SMV 2
SMV 1
SMV 3
BSV 1 BSV 3BSV 2
1. Analyze the structure and development of the Intangible Assets
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then...
Intangible Value
Rights
Intangible Value
Tangible Value
BSV 1
I 1
Market Position
Know howSkillsR&D
Organ &support
Meth. &QA
TangibleValue
BSV 2
I 2
MP
KH
R
O&SM. & QA
?
Balancedifference
SMV 1
SMV 2
2. Identify the changes/problems
................20
66Number of procedures/methodology
M & QA8
75%80%Use of IT infrastructure (PC and Laptops/employee)
O & S7
1212Number of patents (Copy- rights, Design, etc)
Rights6
300500R & D hoursKnow-How5
85100Number of trained employees
Know-How4
122200Number of employeesKnow-How3
400‘000200‘000Marketing costsMarket Position
2
20%20%Market shareMarket Position
1
„Time“ 2„Time“ 1IndexObjectNr
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then...
3. Discover the reasons
People left – see Nr 3
Reason not clear!
Organized event to launch new products
Reasons
Consequence of Nr 3
Yes, it need to be solved!
no
Actions needed?
300
122
400‘000
„Time“ 2
500R & D hoursKnow-How5
200Number of employees
Know-How3
200‘000Marketing costsMarket Position
2
„Time“ 1IndexObjectNr
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then...
4. Prevent problems today and avoid loosing money tomorrow!
Corrected only by solving Nr 3
• Decrease in R & D & production
• Inability to deliver
• Loss of customers
• Decrease of Stock Exchange Value!
-
Consequences within the next 6 to 12 months
Consequence of Nr 3
Yes, it need to be solved!
no
Actions needed?
People left – see Nr 3
R & D hoursKnow-How5
Reason not clear!Number of employeeKnow-How3
Organized event to launch new products
Marketing costsMarket Position
2
ReasonsIndexObjectNr
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then...
By analyzing only the Tangible Assets (money based) you would recognize the problems TOO LATE.
The Intangible Assets of today represent the TangibleAssets of tomorrow, therefore knowing them will help you manage the total assets of the company better.
In this example:Knowing the possible internal problems 6 to 12 months in advance will allow you to correct the problems before they effect the company Market Value!
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then...
A better working instrument for showing overpriced papers: Example Coca Cola Amatil
Intangible Asset
0
1000000000
2000000000
3000000000
4000000000
5000000000
6000000000
7000000000
8000000000
9000000000
0 2E+09
4E+09
6E+09
Tangible Assets
Inta
ng
ible
Ass
ets
Jahr 1990
Jahr 1991
Jahr 1992
Jahr 1993
Jahr 1994
Jahr 1995
Jahr 1996
Jahr 1997
Jahr 1998
Jahr 1999
96
97
98
99
Stock Exchange Value
0
2000000000
4000000000
6000000000
8000000000
10000000000
12000000000
Jahr
199
0
Jahr
199
1
Jahr
199
2
Jahr
199
3
Jahr
199
4
Jahr
199
5
Jahr
199
6
Jahr
199
7
Jahr
199
8
Jahr
199
9
96
97
98
99
....a year before the classic Market Analysis, the Intangible Assets Analysis of BE-Solution could foresee a change by Coca Cola.........
It is possible to analyze the development of the company‘s asset. Example: a part of ABB
Pointer of vector for five years
0 200 400 600 800 1'000 1'200
1'400
1'600
material axis [Mio sFr]
0
200
400
600
800
1'000
1'200
1'400
inta
ng
ible
axi
s [
i -
Mio
]
96
93 94
92 95 The answer for the question – "What happens in the year 1996?" – is easy:
Part of enterprise sold.It is after all a question of the quality of Management if this loss of intangible values is compensated by the price received for the sold enterprise.
Intagible assets or Shareholder Value Expectation?
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80
80
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
Intangible Value [i - Mia]
Tangible Value [Mia]
-
McDonald's
The Tangible Value and the Intangible Value together gives a complete picture about the company value and its development.
The question remain:Are all Intangible Assets or part of it is only Shareholder Value Expectation?
Microsoft IBM
Ford
Coca Cola
Valuepoints of 75 enterprises
0
1'000
2'000
3'000
4'000
5'000
6'000
7'000
8'000
9'000
10'000
0 1'000 2'000 3'000 4'000 5'000 6'000 7'000 8'000 9'000 10'000
tangible Values
inta
ng
ible
Va
lue
s
Analyzing enterprises with the above mentioned instruments leads to fundamentally new decisions on the side of the managers as well as of the side of shareholders, which have nowadays a better/good working instrument for showing overpriced papers.
A better model for new decisions
Investors: Attention!
Management should use potential more effective
More ways to use the analysis: Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value
• To evaluate and decide if it is better to „Make“ or „Buy“• To evaluate and decide for an acquisition (Tangible and Intangible)• To evaluate productivity, e.g. the „transformation“ of Intangible into Tangible• To Benchmark• To evaluate the benefits of a merge• .........
This can be done at various levels: Whole Company, Business Unit, department, process or project.
Additional types of analysis
Turnover (Total value) vs. Total costs (Tangible)
e.g. knowing the Total Value (Turnover) and the Tangible Value of a company (Total costs) it is possible to analyze what value is generated by the company (know how, etc.)
To analyze productivityTo analyze resource allocation (intangible ROI)To analyze Value Chain profitabilityTo evaluate a possible spin off or mergeTo compare the values of different departments
This can be done at various levels: Whole Company, Business Unit, department, process or project.
Additional types of analysis
Total costs (Total Value) vs. „Total costs minus Personal costs“ (Tangible)
e.g. knowing the Total Value (Total costs) and the Tangible Value („All cost minus Personal costs“) it is possible to analyze what value is generated by the people (know how, etc.)
To analyze the productivity of employeesTo analyze the value of trainingTo compare the values of different departments
This can be done at various levels: Whole Company, Business Unit, department, process or project.
Contact:
Peter BretscherIngenieurbüro für WirtschaftsentwicklungAlpsteinstrasse 4, CH-9034 [email protected]++41 (0)79 650 49 04