Off-Shoring – Out-Sourcing Intangible Assets…

Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog – Business Intangible Asset Strategies and Risk Mitigator

A relatively brief 23 years ago, every IT system-computer (mobile device, machine, and appliance, etc.), whose functionality was, in some way, reliant on ‘mother boards, chips, and codes’ was potentially facing a technological Armageddon at midnight, January 1, 2000, which translated to ‘y2k’, ala year 2000.

Individual users and entire companies (globally) were scrambling to become what was dubbed, ‘y2k compliant’ which translated as trying to ensure ‘all things computer’ would not go awry when the respective global time-zoned clocks struck midnight, ala transitioned to a new millennium.

In 1998-1999, a somewhat embarrassing – awkward underlier to business – institutions meeting the deadline of the new millennium and achieving ‘y2k compliance’, was…

  • finding sufficient – numbers of ‘1G individuals’ who still held the requisite (legacy coding) knowledge relative to the original (computer) operating systems, who suddenly were considered ‘mission essential’ to bridge – re-align ‘all things 1G’ with the y2k compliant mandates.  

The y2k ‘compliance’ phenomenon materialized earnestly in mid-1998, a period when all countries’ critical infrastructure + private sector, were experiencing – sensing the effects of two related circumstances…

  1. onset of successive – progressive generations of computing, which then, was largely measured in years, not quarters or globally competitive rollouts at shareholder meetings.  
  2. IT – computing ‘off-shoring’, e.g., financial services, call centers, etc., in which many businesses were, for various reasons, receptive to out-sourcing – off-shoring their internal (often proprietary) IT-computing expertise.  

Premiums were being offered – paid (in the lead-up to y2k,)to re-engage that legacyknowledge – knowhow quickly and allow it to contribute to rendering machines everywhere, y2k compliant and resistant to the ‘shutdown’ risks posed by entering a new millennium which computers were not programmed to recognize as merely another date change.

Those experiential insights, of course, suddenly being welcomed and re-delivered by legacy originators leading up to January 1, 2000, are repeatedly described throughout this blog, as…

  • intellectual capital, i.e., the needed knowledge + knowhow, and
  • structural capital,i.e., familiarity with relevant processes – procedures which then needed to be tweaked for y2k compliance.

Suddenly, those particular-intangible assets, that had been developed, honed, and still held by a ‘generation’ of former employees, were deemed ‘mission essential’ ala, relevant, and very, very valuable.

I was asked to chair – organize a 2-day conference in Washington, DC on behalf of the American Society for Industrial Security-International, on ‘y2k matters’. As it turned out, this conference was SRO for registrants.

This is relevant today on several levels. Prudent – forward looking business leaders, management teams, boards, and investors acknowledged the…

  1. contributory roles – value adds of introducing (re-introducing) the right intellectual – structural capital, at the right time, in the right way, and at the right cost,
    1. may avoid reinventing (or, finding) the proverbial wheel each time a new venture is undertaken, hence efficiencies.
  2. delivery of measurable ROI’s, to business’s reputation, brand, goodwill, image, and, how same
  3. integrated – converged as sustainable and confident business ‘operating cultures.’

Too, whether a business’s ‘mission essential’ intangible assets go out (a.) the front door through off-shoring or downsizing, or (b.) the back door through theft, misappropriation, or infringement, there are important considerations – factors which business leadership, management teams, boards, and investors are obliged to unravel, one of which is…

  • will businesses – institutions, irrespective of sector, again experience circumstances – predicaments not unlike ‘y2k’, in which internally – proprietarily developed + held intangible assets clearly needed depth – breadth to rapidly – effectively respond.

Comparable challenges (risks – threats) to government, business, institutional ‘computing systems, and personal mobile devices, today, and for the foreseeable future, are ever-present, not millennial occurences.

Readers of Mr. Moberly’s – kpstrat’s ‘Business Intangible Asset Blog’ are encouraged to review and comment on other posts wherein arrays of issues related to business things intangible are experientially researched and authentically and practically expressed.


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