Strategic characterization of process assets based on asset quality and business impact
| Pages | 1720-1737 |
| DOI | https://doi.org/10.1108/IMDS-10-2016-0422 |
| Date | 11 September 2017 |
| Published date | 11 September 2017 |
| Author | Maria-Isabel Sanchez-Segura,Alejandro Ruiz-Robles,Fuensanta Medina-Dominguez,German-Lenin Dugarte-Peña |
| Subject Matter | Information & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems |
Strategic characterization of
process assets based on asset
quality and business impact
Maria-Isabel Sanchez-Segura
Department of Computer Science,
Universidad Carlos III de Madrid, Madrid, Spain
Alejandro Ruiz-Robles
Universidad de Piura, Piura, Peru, and
Fuensanta Medina-Dominguez and German-Lenin Dugarte-Peña
Department of Computer Science,
Universidad Carlos III de Madrid, Madrid, Spain
Abstract
Purpose –The purpose of this paper is to present the strategic intangible process assets characterization
(SIPAC) methodology illustrated by an example of its application to the field of information technology (IT).
This is a pioneering methodology for characterizing the impact and quality of intangible process assets and
intellectual capital as levers to achieve organizational objectives. This strategic intellectual capital approach
will help to identify both intangible assets and indicators geared to meeting organizational objectives. This is
of vital importance since the success of an organization can be construed in terms of goal achievement.
Design/methodology/approach –The paper illustrates an example of the step-by-step application of the
proposed methodology at an IT company. The aim is to describe its use in a real case sothat other companies
can benefit from the replication of the methodology used.
Findings –The proposed methodology (SIPAC) that the authors have designed and applied has been found
to be useful and provide an insightful new point of view for strategic decision making in the IT industry
taking into account intangible process assets.
Practical implications –The proposed methodology has been exemplified in a real case. This should help
organizations to use the methodology to replicate the results.
Originality/value –Each and every organization has know-how represented by intangible assets. This
paper meets an identified need to use intangible process assets as levers to help organizations achieve their
business goals.
Keywords Intellectual capital, Strategic decisions, Intangible process assets, IT process assets valuation,
Process assets characterization
Paper type Research paper
1. Introduction
Due to current market pressures, information technology (IT) companies need to deliver
products and services better, faster and cheaper. Now, more than ever, these companies
need to take action to meet their business goals and remain competitive (Lesser and Ban,
2016; Markeset and Bang, 2012; Software Engineering Institute, 2010).
Like any organization, IT companies depend on three main vital resources: financial
capital, physical capital and intellectual capital.
An IT company may not be successful even if it has the financial capital, i.e., money or
credit, and physical capital, e.g., computers or buildings, to support its operations. An IT
company is a knowledge-intensive firm. One of the vital key resources of a knowledge-
intensive companyis intellectual capital. Intellectual capital is defined as the knowledge that
Industrial Management & Data
Systems
Vol. 117 No. 8, 2017
pp. 1720-1737
© Emerald PublishingLimited
0263-5577
DOI 10.1108/IMDS-10-2016-0422
Received 5 October 2016
Revised 9 January 2017
Accepted 10 March 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
This work has been partially funded by the Spanish Ministry of Science and Technology through the
project TIN2011-27244.
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IMDS
117,8
resides in people, organizations, technology, procedures, customer relationships and
professional skills that give a competitive advantage. Alternatively, it is the term used to
describe the processes and assets thathave an indirect effect but arenot usually stated in the
balance sheet (Edvinsson, 1997; Roos, 2001). However, intellectual capital is often taken for
granted and not regardedas the core component that it really is. An organization with better
intangible assets has better prospects of long-term success (Andrews and de Serres, 2012;
Axtle-Ortiz, 2013; Greco et al., 2013; Khan, 2014; Lee et al., 2015; Lerro et al., 2012; Phusavat
et al., 2012; Tamayo-Torres et al., 2016; Ts ai et al., 2012; Shao et al., 2016).
In the IT industry, intangible assets have also been recognized as strategic components
(Castro et al., 2013; Saunders and Brynjolfsson, 2015). Process assets are the intangible
assets (Sánchez-Segura et al., 2016) defined as the core elements for describing, deploying
and improving processes. Process asset performance determines how well processes work
and projects are executed (Project Management Institute, 2013; Software Engineering
Institute, 2010). However, according to the Software Engineering Institute (2010),
the ultimate expected benefit from acquiring or developing process assets is to help to
meet a company’s business goals.
Process assets are of strategic importance and are expected to contribute to meeting
company business goals. Moreover, strategic management is defined as the set of
analyses, decisions and actions performed by an organization. In view of this, an IT
company has to answer four questions in order to build up and retain a competitive
advantage and thereby achieve its business goals (Dess et al., 2004; Thompson, 1993):
what process assets does the company have? How good are the company’s process assets?
How do process assets influence the achievement of business goals? What decisions can
be made with respect to process asset improvement and the resultant achievement of their
associated business goals?
Despite the importance of process assets in the IT industry (Castro et al., 2013;
Sánchez-Segura et al., 2016; Saunders and Brynjolfsson, 2015; Project Management Institute,
2013; Software Engineering Institute, 2010), however, we have not found any new proposals
focusing on the development of solutions to determine the quality of process assets and their
impact on company business goals or decision making regarding such assets in order to
guarantee the long-term sustainability of the business.
This paper aims to take a step further along this path. It aims to help IT companies to
identify and characterize their intangible process assets with respect to their quality and
business impact, laying the foundations for a company to make strategic decisions
regarding its process assets. Section 2 presents related work. Section 3 describes the
proposed methodology and a case study based on an IT company. Section 4 outlines the
conclusions and future work.
2. Related work
The related work focuses on three aspects of the proposal made in this paper: the
identification and classification of process assets, the linkage of process assets with
business goals, and the assessment of process assets.
Several process asset identification and classification methods have been proposed
in the literature (Kogut and Zander, 1992; Hall, 1993; Nonaka et al., 2000; Housel and
Nelson, 2005; Marr, 2008; Li and Tsai, 2009; Li et al., 2010; Seleim et al., 2007; Stewart, 1998;
Verdun et al., 2011). They address the classification of process assets from different
perspectives and could be of use in IT companies. However, they have not been deployed
in real cases. The process asset identification and classification method proposed by
Sánchez-Segura et al. (2016) is based on intellectual capital models (Edvinsson, 1997;
Marr, 2008; Stewart, 1998), which they adapted and applied to the reality of IT companies.
This method has already proven to be valuable for identifying and classifying process
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