Saving intangible assets it is critical for businesses of any size or industry. From a small business with few employees to a multinational enterprise, organizations need to understand their intangible assets, their value, life cycles, transformations and their possible applications at different stages. Without this knowledge of underlying assets, businesses would not be able to maintain their assets effectively, leading to losses instead of timely profits.

This need has become significantly more critical in the digital age, where knowledge-based SMEs are driving economies and their underlying assets are more intangible than physical. Every day, we hear news about business acquisitions with astronomical dollar figures, many based on intangible assets such as intellectual property and information. Intangible assets, unlike physical assets, are dynamic – they live, develop and transform throughout their life cycle.

Maintaining intangible assets requires a robust and repeatable management system to track their performance and ensure alignment with business objectives. ISO 55001 provides a framework to support this, enabling organizations to strategically manage intangible assets for long-term success.

Related: How intangible assets affect business value

Digital businesses and intangible assets

Business assets enable the business objective. In fact, the business objective itself is an asset when it uses the skills of its stakeholders. There is a direct relationship between the objective of the business and the value of its enabling assets. As the business objective makes more use of the asset, the value of the asset increases. Increased demand from the business objective may push the asset further away from it.

Businesses need the right competencies and infrastructure to exploit their assets. It is essential to map intangible assets and business objectives iteratively and continuously to ensure a timely understanding of their importance to each other. This ongoing alignment helps organizations determine whether their evolving intangible assets continue to support business objectives and whether those objectives still have the capacity to effectively use the assets.

Such practice enables better decision-making regarding asset transformation or optimization, ensuring sustainable value creation.

What is ISO 55001?

The dynamic nature of intangible assets requires a structured approach to asset management. ISO 55001 specifies the requirements for establishing, implementing, maintaining and improving an asset management system. It applies to all types of assets and organizations, helping businesses manage assets effectively throughout their lifecycle, increasing value creation and supporting the achievement of strategic objectives.

ISO 55001 provides a basic framework to add structure to asset management practices. It enables organizations to start processes iteratively, by identifying their business assets as a PORTFOLIO for continuous monitoring and improvement of asset performance.

Related: 8 things you should do to protect your assets

Intangible assets – evolution and transformation

Implementing ISO 55001 as an asset management system leads to predefined processes that can be initiated repeatedly to identify business assets and ensure their continued performance. These processes are essential for the proper management of intangible assets, as their nature differs significantly from physical wealth. Intangible assets evolve and their life cycle is marked by transformation. The iterative management system approach should empower organizations to understand this evolution and transformation.

To effectively manage intangible assets, organizations must first define their asset management objectives through the strategic asset management plan. This requires a shift in mindset, from focusing on physical assets to recognizing the dynamic and evolving nature of intangible assets.

Continuous monitoring of asset performance is essential to ensure consistency between assets and business objectives. The question remains: Does the performance of your assets still enable the business objective? Intangible assets, unlike physical assets, can evolve to a point where the business objective no longer has the capacity to use them effectively. This evolution causes the need for transformation, potentially turning an intangible asset into a salable product.

Complexity of valuation of intangible assets

Valuation of intangible assets is significantly more complex than physical assets. Their value must be determined based on their evolution and the business objectives they can enable at each stage of transformation. This complexity adds another layer to asset management, making ISO 55001 a critical tool for businesses navigating the challenges of managing intangible assets.

There are best practices that can be used in valuing intangible assets within a management system, as defined by organizations such as the AICPA. These practices emphasize transparency, consistency and the application of rigorous methodologies. For example, following the AICPA's guidance on fair value measurement ensures that intangible assets such as intellectual property and customer relations are accurately assessed. These guidelines encourage clear documentation, regular performance reviews and alignment with strategic objectives to maintain the credibility of asset assessments throughout their life cycle.

Integration of ISO 55001 with other management systems

ISO 55001 follows the high-level structure of Annex SL, which enables seamless integration with other management system standards such as ISO 20000-1 (IT service management). Since they share a common structure, organizations can more easily implement and manage multiple management systems simultaneously, creating efficiencies in governance and oversight. This allows alignment between asset management practices and IT services, promoting better control, risk management and continuous improvement in different functions of the organization.

Related: How to: Protect your intellectual property as a small business

ISO 55001 provides businesses with a critical framework for managing the unique challenges of intangible assets in the digital age. Its structured and iterative approach ensures that these dynamic assets evolve in line with business objectives, supporting value creation and long-term success. By facilitating continuous monitoring and adaptation, ISO 55001 helps organizations not only maintain but also strategically improve the performance of their intangible assets, ensuring they remain a key driver of business growth in an increasingly knowledge-based economy.