Off-Shoring Intellectual Capital Is Off-Shoring Intangible Assets…

Michael D. Moberly   November 25, 2009

Remember in 1998 and 1999 when every IT system-computer worldwide was facing a presumptive technological Armageddon.  Individual users and entire companies were scrambling to become ‘y2k’ compliant. 

At the time, a widely known, but, somewhat embarrassing aspect of meeting the deadline, i.e., achieving y2k compliance, was finding – locating individuals with the requisite legacy skills – historical expertise of a company’s original IT system configuration necessary to bridge and/or align the aging (non-compliant) systems with the y2k mandates.  

Interestingly, the y2k phenomena came at a time when many companies were experiencing two other phenomena:

1. engaging their second generation of computing, but, computing-IT ‘generations’ in the 90’s were calculated in years, not months or quarters, as they routinely are today.  

2. the initial peak of the IT off-shoring, that is, for a variety of reasons, most of which were financial, companies were shedding their internal (proprietary) IT expertise to an off-shore model.  

There’s little argument today that intellectual capital did then, and still does, represent one of a company’s most valuable (intangible) assets.  So, as many companies learned during the y2k period, intellectual capital adds-sustains value for a company and, if recognized and effectively exploited, can permit companies to be more efficient and avoid reinventing (or, finding) the proverbial wheel each time a new venture is undertaken. 

Ultimately, whether a company’s intellectual capital goes out the front door through off-shoring or downsizing or out the back door through theft, misappropriation, or infringement, several questions should be on management team and board agendas.  One of which is, will companies again find themselves in a predicament not unlike the y2k period, in which their internally developed and proprietary intellectual capital (know how) becomes hollow, i.e., lacks the necessary depth, organizational framework, and infrastructure to quickly and effectively respond to on-the-horizon challenges, risks, and threats.


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