SoftScience Group, Inc.

Leverage Intellectual Capital

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Leverage Intellectual Capital

All business students learn that a growing business requires capital in order to expand. Most people understand capital to be financial capital. Financial capital is the additional funding necessary to invest in additional resources and capabilities that will allow the business to increase its size, presence, output, product line, or any number of other growth measures. By growing the business, additional profit will theoretically be generated for additional growth and to reward the shareholders. The trick is to make sure that the financial return back to the shareholders who make the additional financial investments in the business is sufficiently larger than the new capital investment.

Intellectual Capital

Unfortunately, a lesser understood form of capital available to a growing business entity is its intellectual capital. Intellectual capital is the know-how, experience, professionalism and specialized knowledge that comes together to form the brain resources of the enterprise. Without the expertise and mental productivity to properly utilize the other financial and operational assets of a business, those assets will not be used efficiently. The human resource, particularly its skilled knowledge workers, are the intellectual capital of any organization.

Financial Capital

Financial capital is used to purchase the things needed to operate the business, including inventory, equipment, materials, labor and specialized know-how.

Intellectual Capital

The specialized know-how is part of an enterprise's intellectual capital. Leveraging the existing know-how means that less outside intellectual capital needs to be purchased with the available financial capital.

(Credit ‐ illustration by SostScience Web Media)

With most business functions becoming more automated, the remaining work that must be completed by human beings requires increasingly more knowledge, training, experience and skill. There are fewer and fewer individuals that have the requisite skill set for many modern jobs. So finding and retaining and utilizing such intellectual capital to its maximum efficiency is a critical business goal.

For small businesses, much of the knowledge and know-how needed to run the business often resides within the capabilities of the founder (or founders), and their key early hires. Very often, the founder's intellectual capital is the only thing that makes the business work. The founder, and his intimate knowledge of the business is the reason that the financial capital that might be available can be efficiently utilized.

Often times there's not enough financial capital to grow the business as easily as one might want. Maximizing the efficiency and functioning of the business is essential to preserve both financial capital and the intellectual capital.

Business Formalization--growth requires extending intellectual capital

As a business grows, it reaches a point where the business's data and information becomes too complicated to be managed by simple systems (human or computer software). Often piecemeal solutions (human-software hybrid solutions or multiple separate software systems) rapidly become unwieldy, further taxing the organization's intellectual capital. A more natural holistic software system can extend the company's intellectual capital by capturing and storing the businesses data more efficiently when it first is discovered/generated.

Businesses, particularly newer organizations in a growth mode, need to have rapid decision-making and responsiveness utilizing the widest possible set of relevant information in order to advance in their market niches. Coordination within the enterprise is paramount. The enterprise's knowledge must be available to all decision-makers as quickly as that information is born. Information technology is the key to achieving that goal.

In the information technology ecosystem, code reuse has been widely accepted for at least the past 25 years as a way to leverage investments in enterprise knowledge. SSG believes that the same need for reuse exists in the data sphere as well. Leveraging an enterprise's data – its declarative knowledge base – is just as important, if not more so, than code reuse – its procedural knowledge base.

By employing a set of principles in the design of software that emphasize a holistic organization of the business's declarative knowledge into a common data layer that can be used for multiple functions within the organization, the knowledge base of the organization is not trapped in specialized software that only provides one aspect of the company's usage needs.

This approach, called Information Naturalization stresses the primacy of the declarative knowledge over procedural knowledge in terms of its collection and storage and ultimate reusability. By capturing all information in a naturalized form as it is generated by the organization, and by preserving the relationships between instances of information that may exist, the richness of the information is preserved for future use in multiple processes. Many tasks and business functions can then be performed using this consolidated enterprise knowledge base.

Utilizing smart software that allows the key personnel in an organization to make good decisions quickly is one way to efficiently utilize the financial and working capital of the business by fully leveraging the available intellectual capital within the organization. SoftScience Group, Inc. has been developing solutions to this problem for over 25 years.

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