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"Intangible Assets and Value Creation" by Juergen H. Daum

 

 


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The transformation of our economies and societies at the begin of the 21st century requires new enterprise management concepts:
 
This book presents them!

John Wiley & Sons Ltd, Chichester/UK,
ISBN 0470845120, December 2002

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“Intangible Assets and Value Creation” by Juergen H. Daum summarizes in a synopsis all relevant aspects of intangible assets management and presents for the first time a comprehensive and integrated concept for enterprise management that takes intangible assets systematically into account.

Including many practical examples and tips for implementation!
Including interviews with leading experts like David Norton, Leif Edvinssion and Baruch Lev!

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Juergen H. Daum, is management adviser, expert on finance and enterprise management, and a generator of ideas and stimuli for the CFOs and controllers of numerous European companies in redesigning the finance organization ("Finance Transformation") and the enterprise management and control system (e.g. related to topics like "Beyond Budgeting" or Intangible Assets Management). In addition he is the Chief Solution Architect of the Business Solutions Architects Group EMEA at SAP, based in Walldorf, Germany. He regularly publishes articles in professional journals and books, speaks at conferences, and is holding workshops and seminars.   

After conducting more than three years of extensive research, he published his book "Intangible Assets and Value Creation" in May 2002 (Germany edition - English edition in January 2003).
During his research he investigated the new control and management requirement of enterprises and of their executives who are confronted today with an economic environment that is so much different from the one of the past from which originate the management tools that we know, but that are not sufficient to help companies and their managers to master the challenges of today’s 
global knowledge economy.

The goal of this book is threefold
First, to provides a complete picture of these conditions and of the new success factors for companies today that comprises all important enterprise management disciplines.
Second, to develop in a systematic and understandable way the framework for a new more appropriate enterprise management model and system.
Third, to guide managers as well as corporate professionals and staff members 
in starting to develop and implement a new management, accounting and reporting system 
for their company.

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The book's mission - developing the foundation
or a new enterprise management system :
Working with some of the main contributors to a new model of enterprise and performance management as well as of accounting and corporate reporting and communications, Juergen H. Daum developed in his book the foundation for a new enterprise management system and introduces it from a very practical perspective. He is citing many examples and is describing concrete steps that companies must take to implement the management system for the 21st century.  This is complemented with interviews with some of the leading experts like David Norton, coauthor of the Balanced Scorecard, Leif Edvinsson, pioneer and thought leader in intellectual capital management, and with Baruch Lev, the worlds leading expert in intangibles accounting.

The book meets a growing demand of senior executives and of CFOs to actively manage the hidden immaterial values of their companies and to leverage the full potential of all of their corporate assets and capabilties. Writes Dr. Werner Brandt, CFO and member of the board of SAP AG:


“The increasing importance of the so-called knowledge economy, which is often associated with industries such as software, pharmaceuticals, the media, and financial services, will continue to change our image of the economy and of value creation. Factories and assembly lines will no longer form the wealth of a company; instead it will be the creativity and capacity for learning of the employees, innovation, and the ability to maintain long-term customer and business partner relationships.

But there is no exclusive "either-or" between industrial and knowledge economy. Many products will continue to be manufactured industrially. However, the share of intellectual capital and therefore of intangible assets that flows into the development and design of new products and that forms the basis for modern competitive production and supply chain processes will increase.

But to convert their knowledge capital into a measurable performance and results, companies require appropriate instruments for control. A combination of "old" and "new" is also valid here - for example, efficient cost management in combination with effective innovation, market, sales, and customer relationship management. Here we need to catch up, both with regard to business science and theory as well as the practical aspects. This book covers exactly this subject, and represents therefore a valuable contribution towards making the intangible assets that are so valuable to a company today more manageable by integrating them into a comprehensive enterprise management and control system
.”

Dr. Werner Brandt, CFO and member of the executive board of SAP AG
(quoted from the book’s foreword)


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Extract from editorial reviews:

"This book aims at a paradigm change in management and names good reasons and arguments for it. It belongs into the management discussion of today. Juergen Daum proves great thought leadership." (Controller Magazin, issue 5/2002 - review of German edition)

"The author succeeded to present the book's broad and complex topic in a structured and clear way." (Krp-Kostenrechnungspraxis, 5/2002 - review of German edition) 

"A comprehensive collection of material and a rich source for ideas around the topic of intangible assets management." (is-report, issue 9/2002 - review of German edition)

"A really COMPLETE controlling and management system is outlined. 
And I found many good ideas for my practical work [as a consultant]." 
(amazon.de customer review, August 2002 - review of German edition)

"An impressive business book. ..What makes the book special is that it strikes a fine balance between practical insights, case studies and applications on the one hand, and state-of-the-art theoretical concepts on the other." (Amazon.com customer review of the English edition, 10/ 2003)

"Intangible Assets is a valuable advisor for managers of companies, that are based on knowledge-based processes. No controller should miss to read it." (review of the German edition, Business bestseller summaries, No. 181, 2003)

"Would a six rating star exist [for the Amazon customer rating], I would grant it for the interviews with the five leading experts and pioneers in the field of this new accounting and controlling approach: Leif Edvinsson, David P. Norton, Baruch Lev, Ghislain Malcorps and Patrick Georges. This is a clear buy recommendation for managers, auditors, controllers, accounting experts, financial analysts and institional investors." 
(
Amazon.com customer review of the German edition, 07/ 2004)


----------------------------------------------------------
 
About the author:
Juergen H. Daum is a management adviser, an expert on finance and enterprise management,  Chief Solution Architect of the Business Solutions Architects Group EMEA at SAP in Walldorf, Germany and a book author and a speaker and moderator at national and international conferences, workshops and seminars. For the CFOs and controllers of numerous European companies, he functions as a generator of ideas and stimuli for the redesign of the finance organization ("Finance Transformation") and of enterprise performance management (e.g. related to topics like "Beyond Budgeting" or Intangible Assets Management). Together with his colleagues of the SAP Business Solutions Architect Group he has built up a network for CFOs and senior finance architects of European companies (SAP Finance Best Practice Network) through which he is organising cross industry and cross country learning and exchange of finance best and next practice between member organisations.Before his current position he was responsible in SAP's product development group as Director Program Management mySAP Financials for the strategic repositioning of SAP’s financial and accounting applications, then called mySAP Financials. Before, as project manager and later as global product manager, he shaped the concept for SAP’s Strategic Enterprise Management (SAP SEM) solutions, a suite of analytic software applications to support enterprise performance management. Prior he worked for SAP in sales, consulting and product management functions in Germany and on a European level. Before joining SAP in 1992 he was the CFO and controller of a German midsize company. He regularly publishes articles in professional journals and books, speaks at conferences, and is the author - in addition to "Intangible Assets and Value Creation" (2003) - of the book "Beyond Budgeting" (2005 - German edition). In addition he teaches at various universities and business schools in Germany and the UK and is training controllers at the Austrian Controller Institute (Österreichisches Controller Institut). He can be reached via his website at www.juergendaum.com.

interview with Juergen H. Daum

» Juergen H. Daum @ Events 2006

» Speeches, conferences, seminars and workshops (2002-2005)
» List of publications 2002-2005


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Articles:
Why a new managment system?

A European Peer Discussion: “Measuring and Managing Intangible Values in Today’s Economy” 

Value drivers intangible assets and intellectual capital: implications for the reporting, management and corporate governance practice – report from a workshop in Copenhagen with experts from Sweden, Denmark and Germany  
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More about this book
Overview

Book Content

Statements about the book's topic

Editorial reviews

About the author

 

 Overview:



Corporate success today is not based any more on production facilities, financial capital and ownership, but on invisible and untouchable values - intangible assets -, such as relationships with business partners, brands, ideas, the quality of business processes, talented employees, corporate culture, intellectual capital and innovation power. 

As a consequence, the old systems for managing companies have become outdated. They had been conceived for the industrial age and worked well for decades. But they are failing in the knowledge economies of today.  Which tools requires management instead ? How does the new model of the enterprise look like and how must companies be organized internally and how they have to organize relations to external parties in
order to be successful under these new conditions ? Which are the concepts and management tools necessary to harness the full potential of a company’s intangible assets in order to be able to create sustainable value for all its stakeholders? 

This book explains and demonstrates, how companies can be managed successfully and can create sustainable value in the new era of “intellectual capitalism”. The author develops an enterprise management and control system that integrates concepts such as the Balanced Scorecard, Real Options Valuation, Beyond Budgeting and new human capital, customer, and innovation management techniques into one comprehensive management concept and framework. This includes also mission critical "soft factors", such as a new approach to management communications and dialogs, which support better the new management processes, as well as concepts, for improving the personal productivity of managers.   

The book includes many practical examples and case studies as well as interviews with the leading experts in the respective field, such as Leif Edvinsson, David Norton and Baruch Lev.
 

German Edition:
Galileo Press, Bonn/Germany,  ISBN 3-89842-112-0, May 2002 (more about the German edition)
English Edition: John Wiley & Sons Ltd, Chichester/UK, ISBN 0470845120, December 2002

» Foreword to the German edition by Karlheinz Hornung, Chief Financial Officer and member of the 
   executive board, MG Technologies

» Foreword to the English edition by Dr. Werner Brandt, Chief Financial Officer and member of the 
   executive board,
SAP AG


 

 

 Book content:

  • The end of industrial capitalism and of traditional management 

  • Factors of corporate success in a knowledge based, digitized economy

  • The evolution of organization structures and of organizational capital

  • The new management system and a new approach to accounting and business controlling 

  • Management tools of the future: How managers can increase business effectiveness

  • Challenges for the CFO und CIO

  • Intangible Assets and the wealth of nations: How should the new production factors affect economic policy ?

Since begin of the 1980s, the share of Intangible Assets of corporate market value, that is the amount of market value that is not reported on a company’s balance sheet, has constantly increased from an average of 40% to over 80% at the begin of the 21st century. And this growing dominance of Intangible Assets in the developed economies is changing the economics.

In order to create sustainable value for their investors and stakeholders under these new conditions, companies have to:

  •  Transform their organization structures and processes and partly also have to adapt their corporate culture

  • Implement new management systems and improved accounting, controlling, and analytical tools

In his book, Juergen Daum starts to describe the new business conditions of an Intangible Assets based economy and its consequences for companies. He explains the limitations of the traditional business organization and its management, accounting and controlling systems. He continues to demonstrate, underpinned by many examples from real life companies, the success factors for enterprises in this new environment.

In the second part of the book, the author presents, through two detailed case studies of well known firms, the evolution of enterprise structures in the past two decades:
-from the hierarchical industrial corporation to the global but decentralized enterprise that can act locally in an entrepreneurial way, while sharing knowledge based Intangible Assets on a global level and
- from the global industrial company to the networked e-business enterprise, that is able to increase leverage of its Intangible Assets exponentially. 

The third part of the book presents a concept and detailed blueprint for a new management system that enables companies to master the challenges and fully leverage the opportunities of the era of the Intellectual Capital and Intangible Assets. This includes the presentation of a framework for a new accounting, controlling, and risk management system as well as  management concepts, that enable managers to increase the effectiveness of their strategies and organizations. It is followed by the description of the challenges CFOs and CIOs are facing in providing the new business information infrastructure as well as of the possible solutions. 

What a knowledge and Intangible Assets based economy on the macro level means, is covered in the last section of the book. Here the author presents and elaborates on the new economic success factors of nations.

Juergen Daum is using many examples and case studies for illustration. This is complemented through interviews with leading experts. The concepts these experts talk about, have been integrated into the framework for the new accounting, controlling, and management system proposed by Juergen Daum in his book. Here some extracts from the interviews with Prof. Baruch Lev, David Norton, 
and Leif Edvinsson:
» to the Interviews

 

Articles about the book's topic written by the author:

Vector-Based Performance Measurement: Linking the Subjective and Objective Dimension into One System of Performance Measurement (August 2004)      (article as PDF )    (presentation: PDF as winzip file) 

Report from the First PMA Intellectual Capital Research Symposium held in Cranfield, UK, 1-2 October 2003 (October 2003)

Intangible Assets and the need for a holistic and more future oriented approach to enterprise management and corporate reporting 
(Paper (co-authored with Baruch Lev) submitted for and presentation (prepared together with Baruch Lev) held by Juergen H. Daum at the First PMA Intellectual Capital Research Symposium held in Cranfield, UK, 1-2 October 2003

Value drivers intangible assets and intellectual capital: implications for the reporting, management and corporate governance practice – report from a workshop in Copenhagen with experts from Sweden, Denmark and Germany   (March 2003)

Why a new management system?
(January 2003)

Approaching the next level of shareholder value management – the art of corporate performance management (part 2) (December 2002)

A European Peer Discussion: “Measuring and Managing Intangible Values in Today’s Economy” (November 2002)

Approaching the next level of shareholder value management – basics (part 1) (August 2002)

Value Drivers Intangible Assets: Do We Need a New Approach to Financial and Management Accounting? - A Blueprint for an Improved Management System - by Juergen H. Daum (published in "Controlling", January 2002)  

Corporate Performance Management: Managing profitability and growth in the new environment (Januar 2002)

The new FASB rules for reporting on Intangible Asset - The U.S. versus the European way (November 2001)

...more articles 

 

 

 Statements about the book's topic:

 

"Business success of enterprises from all industries is based increasingly on their capability to innovate and to create sustaining relationships with business partners and customers. Through investments in these areas they create intangible assets which represent, beside their human capital, the core of their corporate value." 

Prof. Dr. Henning Kagermann, CEO of SAP AG
_____________________________

"In an effort to achieve optimal allocation of corporate resources, managers should develop the capability to  assess the expected return on investments in R&D, employee training, information technology, brand enhancement, online activities, and other intangibles and compare these returns with those of physical investments."

Prof. Baruch Lev, Professor of Accounting and Finance at New York University, Stern School of Business 
 ______________________________

"It’s impossible for financial systems to describe the process of intangible asset based value creation. They can’t integrate different kinds of assets into what I would call a strategic recipe. With the Balanced Scorecard an organization has a way that it can describe its strategy because it allows you to deal with non-financial factors - the intangible assets - and to show how those are being tied to financial outcomes. And once you describe it, you can manage it."

David P. Norton, co-author of the Balanced Scorecard concept (quoted from the interview in this book)
______________________________
 

"Most companies do not dispose today of the information and management tools they need in order to manage their intangible assets effectively. It's the tasks of the chief financial officer, as the guard of the economics of the enterprise, to provide these tools and information systems."

Cedric Read, Director World Class Finance, KPMG UK and author of the book
„e-CFO“

 ______________________________  

"Industrial value chain processes no longer dominate economic value creation. Today it is innovation, it is seeking new ways of meeting market demands, that is yielding the highest return on investment. And that means that you have to invest in your Intellectual Capital and in new structures that help you to innovate and to make a difference."

Leif Edvinsson, father of the concept of Intellectual Capital and former director Intellectual Capital at Swedish financial services provider Skandia  

______________________________ 

 

Editorial reviews (of the identical German edition):

 

krp-Kostenrechnungspraxis 5/2002 (October 2002):
...the book "Intangible Assets" provides an interesting introduction to the challenges, which the new knowledge economy places at companies in the areas of management, accounting and controlling. The author succeeded to present the book's broad and complex topic in a structured and clear way. ...The book is of interest both for managers as well as for controllers and accountants.

Controller Magazin 5/2002 (September 2002):
... a very engaged, carefully investigated and knowledgeable written book... This book aims at a paradigm change in management and names good reasons and arguments for it... The book belongs into the management discussion of today, it brings much change potential to the table. Juergen Daum proves great thought leadership. 

is-report 9/2002 (September 2002):
... the author succeeds in presenting in a very good and varied way concepts and methods for performance measurement. To investigate the (still exotic) topic of intangible assets creates unquestionably value added. This book is a good, comprehensive gathering of material and a rich source for ideas around the topic of intangible assets. 

Acccounting, August 2002:
The call for improved controlling and reporting systems is growing louder. Juergen Daums suggestion for a Tableau de Bord [as controlling and reporting tool, as described in the book], which unites the best concepts available in the market, can help here. His suggestion is brilliant and typical for times, when business science is not any more held together by one unifying model. 

Amazon.de customer reviews (July and August 2002):
Average customer rating: *****

Absolute buy recommendation
- A really COMPLETE controlling and management system is outlined. And I found many good ideas for my practical work [as a consultant]. 

A comprehensive control and management concept - The author outlines nothing less than a comprehensive controlling and management system... It is an excellent book. Juergen Daum presumes not in endless academic discussions, but added many practical examples, easy-to-digest explanations and descriptions as well as focused interviews with the unquestioned experts in the respective areas. The book stands thus more in the Anglo-American tradition than comparable German-language management publications... 

A
mazon.com customer review (October 2003):
Average customer rating: *****
An impressive business book on the "exotic" topic of intangible assets...What makes the book special is that it strikes a fine balance between practical insights, case studies and applications on the one hand, and state-of-the-art theoretical concepts on the other...I strongly recommend this book if you want to have a better understanding of the comprehensive role and implications of a company's intangible assets. 

Business bestseller summaries, No. 181, 2003:
Intangible Assets is a valuable advisor for managers of companies, that are based on knowledge-based processes. No controller should miss to read it." (review of the German edition)

Amazon.de customer reviews (July 2004):
Average customer rating:
*****
Would a six rating star exist [for the Amazon customer rating], I would grant it for the interviews with the five leading experts and pioneers in the field of this new accounting and controlling approach: Leif Edvinsson, David P. Norton, Baruch Lev, Ghislain Malcorps and Patrick Georges. This is a clear buy recommendation for managers, auditors, controllers, accounting experts, financial analysts and institional investors. 


  About the author:


Interview with Juergen H. Daum

Juergen H. Daum is a management adviser, an expert on finance and enterprise performance management, and the Chief Solution Architect of the Business Solutions Architects Group EMEA at SAP in Walldorf, Germany. He also is a book author and a speaker and moderator at national and international conferences, workshops and seminars  

Management adviser: For the CFOs and controllers of numerous European companies, he functions as a generator of ideas and stimuli for the redesign of the finance organization ("Finance Transformation") and of enterprise performance management (e.g. related to topics like "Beyond Budgeting" or Intangible Assets Management)

Expert on finance and enterprise performance management: He teaches at various universities and business schools in Germany and the UK and is training controllers at the Austrian Controller Institute (Österreichisches Controller Institut). In his workshops and seminars about finance and controlling/performance management topics he provides practicable concepts for developing the CFO and controller function in organisations and for "management innovation". He regularly publishes articles in journals and books, speaks at conferences, and is - in addition to "Intangible Assets and Value Creation" (2003) - also the author of the book "Beyond Budgeting" (2005, German edition).

Chief Solution Architect at SAP: Together with his colleagues of the SAP Business Solutions Architect Group he has built up a network for CFOs and senior finance architects of European companies (SAP Finance Best Practice Network) through which he is organising cross industry and cross country learning and exchange of finance best and next practice between member organisations.

Juergen H. Daum is engaged through various activities (conferences, seminars, workshops etc.) in the European finance and controller community. He also is a member of the Controller Association, based in Germany (Internationaler Controller Verein e.V.) and maintains a personal network of relationships to thought leaders in Europe, North America and Asia.

Before his current position he was responsible in SAP's product development group as Director Program Management mySAP Financials for the strategic repositioning of SAP’s financial and accounting applications, then called mySAP Financials. Before, as project manager and later as global product manager, he shaped the concept for SAP’s Strategic Enterprise Management (SAP SEM) solutions, a suite of analytic software applications to support enterprise performance management (therefore his colleagues call him also the "father of SAP SEM"). Both roles included the responsibility for business development, the acquisition of pilot customers and the creation of relationships to executives of these customers and to important thought leaders - both in North America and Europe. Prior he worked for SAP in sales, consulting and product management functions in Germany and on a European level. Before joining SAP in 1992 he was the CFO and controller of a German midsize company

Juergen H. Daum, born in 1960, lives with his family near Heidelberg in Germany. He owns a second home in France. 

 


Juergen H. Daum @ events 2006

Speeches, conferences, seminars and workshops 2002-2005

List of Publications 2002-2005

He can be reached at:

       

Website: http://www.juergendaum.com/

 

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