Service Metaphysics

Service Metaphysics

Adamantios Koumpis (ALTEC Information & Communication Systems S.A., Greece)
DOI: 10.4018/978-1-60566-683-9.ch009
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Abstract

Transcendental matters of services: communities of users, service idealism, theological and existentialist perspectives on services – this chapter (in contrast to the previous one) is the most philosophical part of the entire book though it is of straight utility for its linkage to many service business and management topics. Furthermore, in this chapter we present a methodology (PACE) that helps for the valuation of intangible assets like (what else?) services. PACE is presented with practical examples and contextually linked with project and other service related activities. Services unequivocally constitute an area where increasing interest of experts from the areas of intellectual capital management and valuation will be concentrated, as they on their own possess qualities and characteristics of intangible assets because of their immaterial nature.
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What Is Pace?

PACE aspires to be an easy-to-use methodology that will help projects to express their assets, the ones that each one of the participating entities possess as well as the ones that are created during the project execution and which are collectively owned either by all or by more than one partners.

To this end, we made several assumptions which aimed not to support academic completeness and consistency, but rather to help for the practical presentation of key issues which tended to be neglected, though they are of utmost importance.

The name PACE comes as an acronym of the following: Project Assets, Core competences and Exploitable items. As shown in Figure 2, these three concepts form the basic pillars around which our methodology is formed.

Figure 2.

Basic entities of the PACE toolkit

More specifically, during the lifetime of a project, and as a result of the collaborative research and development activities, it is supposed that certain Core competences are strengthened for each of the participating entities.

These can be related to certain intangible assets of the organisation, and an attempt to quantify their contribution margins can be made. Of course, this valuation may be highly subjective, and it is not uncommon that different people in different moments and in different contexts may valuate a certain competence or a certain intangible asset quite differently.

However, this is not an excuse for not carrying out this exercise. Even if wrongly done, at least it is worth to put figures next to core competences, as this is the first step only for revising, refining and correcting.

From any point seen, a project is judged by its outcomes; these may relate to specific Deliverables, or relate to any different type of results, synergies and achievements that have been given birth during the project execution.

Whatever these can be, they form the Project Assets and it is these that can be traded as tangible or intangible products of the project itself. They can be collectively or equally owned or partly owned by one or more partners.

The way that this distribution will be made is not straightforward; it can either be related with the resources allocated by each of the partners involved in an achievement, or judged by quality criteria. In any case, they should be consensually agreed and accepted by all parties. Last but not least, and similarly to the case of the core competences, the Project Assets are subject to a valuation.

However, and in contrast to the case of core competences that are valuated with respect to the actual contribution margins that they can show, each assets is related with a foreseen contribution margin. i.e. while core competences are analysed with respect to how much they contribute to an organisation’s existing business cycle, for the project assets the focus point is at the future and the underlying question is how much can I expect to receive from this particular asset as a contribution to my business?

Finally, there are the Exploitable items. These relate to each member of the consortium and can be considered as a bridge between the overall and in many cases rather abstract project assets and the more down to earth core competences.

Exploitable items are of more tangible nature; in a basic research project that examines new types of algorithms, the exploitable item for a software company might be the improvement of a computing application that makes use of a particular algorithm. In this respect, the company may count on higher revenues, a more established reputation, and an increase in sales or an appreciation by its installed base. All these latter elements can be related with figures and provide a convincing argument for the corporate Management Board to support adoption of an innovation.

Having said what PACE is, we now need to say what PACE is not: PACE is neither a business plan nor a template for some type of exploitation or commercialisation report. It aims to facilitate understanding of the approach to be employed for organising the exploitation work, and in this respect to improve the cohesion in presentation and terminology matters. Where possible, we illustrate the different parts with examples, some of which are real and others fictitious.

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