A framework of intangible valuation areas (FIVA): Aligning business strategy and intangible assets

Purpose – This study investigates the adequacy of existing intangible asset models and defines and codifies common principal valuation drivers of intangible assets for use in enterprise balanced scorecard valuation practices of information technology (IT) firms. Design/methodology/approach – Existing intangible asset balance scorecard valuation models and value chain models are evaluated to extract their value components and align them with performance-based activities of the business enterprise to define a common taxonomy of value drivers of intangible assets. Chief executive officers (CEOs), chief finance officers (CFOs) and “other executives” of IT firms validate the taxonomy. Findings – IT firms that use a standard and consistent taxonomy of intangible assets could increase its ability to identify and account for more intangible assets for measurement and valuation. Research limitations/implications – This study is limited to the Washington Metropolitan Area, is a single sector study (IT firms), the target audience is CEOs and CFOs; and emphasis is on the Score Card (SC) type model as classified by Sveiby. Future studies could expand the geographic circumference, the scope to other industry sectors, and the target audience to other decision makers Practical implications – The framework of intangible valuation areas (FIVA) allows a business to identify and link performance measurements/indicators to its intangible value drivers. It supports the capture and subsequent evaluation of leading and lagging indicators in the achievement of a knowledge management strategy. Originality/value – FIVA provides a framework to have command of and access to effective utilization of business resources and knowledge, to develop, sustain and enhance its mission effectiveness and/or competitive advantage.