IP Spend Management: Contextualizing Performance
The legal business landscape has shifted significantly over the past decade. Since the financial crash of 2008, corporate law and IP departments and law firms were forced to do more with less, making the allocation of resources more critical than ever. As the bottom line continues to recover in the years since, the crux of IP Management has evolved from an emphasis on legal matters to one of spend management visibility and the revenue-generating potential of individual assets. This has, in effect, formed a well-defined focus to align the management of intellectual property assets and the achievement of overall business objectives—and ultimately, to demonstrate real return on investment.
IP stakeholders investing in advanced IPM solutions these days demand actionable intelligence – intelligence that delivers informational assets to support, enable and drive decision-making at all levels of the organization. In short, progressing IPM organizations seek the context and the data to make the best decisions possible for pursuing, managing and monetizing innovation.
Spend Management: Borrowing Operational Maturity
In our research, we have observed leading IP Management vendors focus development resources to create new competencies for IP spend management. These new IPBM capabilities borrow heavily from the sibling discipline of Enterprise Legal Management (ELM), which, largely is dedicated to the harvesting, analysis, and management of legal invoice data for business insight. This reinforces the notion that progressive practice management, whether in corporate law departments or law firms, must adopt a multidisciplinary cross-functional approach.
As a result, we have observed a notable expansion in the use of performance metrics, reporting and Key Performance Indicators (KPIs) to track and contextualize IP spend. We have also seen the development and adoption of modules to manage IP-related spend with the integration IP budgets, matter templates, forecasting, accruals and spending rules. Solution providers have been particularly aggressive in developing expansive spend-management capabilities. One recent example introduced a new budget and forecasting tool, which allows users to build custom task-driven budget templates; these are used to scope and forecast IP spend, track performance against expectations, and even to perform scenario-based modeling with visual representations and contextual predictors for how various changes and assumptions could affect bottom-line performance. Other solutions showcase new fully realized capabilities for contract management, a growing legal-technology discipline. Such competency and insight into both prosecution and maintenance-related costs can be of equal benefit to law firms and corporate law departments, both of which seek persistently to add business value to the services they provide. These tools and integrated features help illustrate what a true IPBM solution can accomplish. They also further highlight the growth of IPM from a mere set of tactical tools to a more organic, institutional mindset: that spend management, as a prime example, is necessary for bona fide bottom-line discipline.