Functional Intangible Asset

Unlike reputational intangible assets, which focus on a company’s perception in the marketplace, functional intangible assets are internal resources that enable it to operate efficiently. These assets include everything from proprietary technology, patents, trade secrets, know-how, processes, systems and even workplace culture. In the example of a software company, its brand reputation and customer loyalty are reputational intangible assets, while the underlying software code, algorithms and technical expertise of its developers are functional intangible assets. Companies can maximise the value of their functional intangible assets by integrating them into their strategic planning, decision-making processes and day-to-day operations. Similarly, companies can use their internal know-how and expertise to streamline business processes and reduce costs. Building functional intangible assets requires a strategic approach that focuses on cultivating a culture of innovation, collaboration and continuous learning, where employees are empowered to share knowledge and experiment with new ideas.