|dc.contributor.author||Housel, Thomas J.||
|dc.contributor.author||Nelson, Sarah K.||
|dc.description||The article of record as published may be located at http://dx.doi.org/10.1108/14691930510628816||en_US
|dc.description.abstract||Purpose – The purpose of this paper is to provide a review of an analytic methodology (knowledge
valuation analysis, i.e. KVA), based on complexity and information theory, that is capable of
quantifying value creation by corporate intellectual capital. It aims to use a real-world case to
demonstrate this methodology within a consulting context.
Design/methodology/approach – The fundamental assumptions and theoretical constructs
underlying KVA are summarized. The history of the concept, a case application, limitations, and
implications for the methodology are presented.
Findings – Although well-known financial analytic tools were used to justify IT investment
proposals, none provided a satisfying result because none offered an unambiguous way to tie IT
performance to value creation. KVA provided a means to count the amount of corporate knowledge, in
equivalent units, required to produce the outputs of client core processes. This enabled stakeholders to
assign revenue streams to IT, develop IT ROIs, and decide with clarity where to invest.
Practical implications – When stakeholders can assign revenue streams to sub-corporate
processes, they have a new context for making IC investment decisions. “Cost centers” and decisions
based on cost containment can be replaced. Concepts such as a knowledge market, the knowledge
asset pricing model, k-betas, and a sub-corporate equities market can be developed and applied. Some
of the limitations related to real options analysis can be resolved.
Originality/value – This paper introduces an approach to measuring corporate intellectual capital
that solves some long-standing IC valuation problems.||en_US
|dc.publisher||Monterey, California: Naval Postgraduate School.||en_US
|dc.rights||This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. As such, it is in the public domain, and under the provisions of Title 17, United States Code, Section 105, may not be copyrighted.||en_US
|dc.title||Knowledge valuation analysis, Applications for organizational intellectual capital||en_US
|dc.contributor.department||Information Sciences (IS)||