VTV ANALYSIS TM
VTV Analysis TM * is Vertex Intellectual Property Strategies Inc.'s proprietary method for carrying out socio-economic benefit-investment evaluations of technology development initiatives.
Vertex Intellectual Property Strategies developed the VTV Analysis model for the purpose of identifying the benefits and projecting the payback of industry consortia, industrial R&D funding, technology deployment projects, government and government agency funded technology commercialization initiatives. Vertex has developed this model in response to the need of the sponsors of such initiatives to assess the impact of funding R&D, deployment and commercialization programs.
The Vertex model facilitates the identification of all financial contributions
provided during the development and commercialization processes, and the
identification of both the financial and intangible benefits that are projected
to flow from the project(s). The VTV Analysis methodology will have extensive
applicability and Vertex has designed the analysis model with this flexibility
Our assessment process considers both technology development risks as well as business risks. Client supplied financial business projections are scrutinized and utilized as the basis for Vertex's analysis. Benefit-investment ratios are calculated by dividing the Net Present Value (NPV) of defined benefits that are anticipated to flow from the application of the technology by the NPV of the targeted investments made to develop and commercialize the technology.
In addition to applying the VTV Analysis to specific projects, the Vertex model is ideally suited to assessment of entire portfolio(s) of technology development supported projects, programs, and initiatives of a specific organization. Furthermore, the assessment of individual projects and/or portfolios can be easily integrated to provide a benefit-investment ratio of an entire organization.
The VTV Analysis Model has been developed in a way that facilitates adjusting projections as new insights and additional information becomes available. It is also possible to add additional parameters that may be identified at a later stage. In addition, it is straightforward to assess different scenarios such as alternative discount rates, delays in the revenue stream developing, and adjustments to the investment and benefit projections.
The VTV Analysis methodology involves the following steps:
- The Vertex study team develops a basic understanding of the specific
technologies involved, how they were developed, and their commercialization
potential. Key personnel involved are interviewed. Past financial records,
future projections and other supporting information is gathered and evaluated.
- Based on Vertex's understanding of the technology and business situation,
Vertex projects the future business potential, the economic benefits to
business, industry, society and the sponsoring agency. Where appropriate,
comments from industry experts are sought to vet this analysis.
- The VTV Analysis model is then employed to compile and analyze the information
gathered. NPVs are calculated with all assumptions being noted.
- A report, summarizing our findings and providing conclusions and recommendations, is then produced for our client. The assessment of individual projects/portfolios is then compiled to provide a benefit-investment of the entire organization.
The VTV Analysis can uncover and quantify benefits that are not often considered during the course of a technology development and/or deployment investment. The total benefit-investment ratio for a typical project is often better than anticipated and can prove to be a constructive means to express the anticipate leveraging of the investment. Our analysis is intended to provide the order of magnitude of the benefit-investment ratio of a technology commercialization initiative and is not meant to withstand the rigors of a financial accounting review.
In addition to some of the tangible business benefits such as improved sales, improved margins and improved product quality which will result from successful technology development and deployment; some of the intangible benefits which can develop and which will be considered as part of our analysis include:
- Job creation - impact on GNP and the development of foreign exchange,
- Environmental impact and energy conservation,
- State of the art advancements of Canadian technologies,
- Educational benefits at universities,
- Growth in the Canadian knowledge base,
- Synergies created such as the development of spin-off businesses and technology licensing potential.
See the case study Here To Help You for an example of how this methodology has been applied.
( * VTV Analysis is Vertex Intellectual Property Strategies Inc.'s proprietary socio-economic benefit-investment analysis tool. )