ILG STUDIOS A TURKISH SOFTWARE ENGINEERING COMPANY 1

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY 1. www. ilgstudios. com 2. http: //www. ilgbar. com/company. html 1

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW THE METHOD SENT BY PROF. STAM (1) STEP 1: WHAT ARE THE LEARNİNG OBJECTIVES OF THIS CASE? STEP 2: NARRATIVE OF THE SITUATION TO MOTIVATE STUDENTS STEP 3: HOW SHOULD THE CASE REVEAL MULTIFACETED ISSUES ABOUT THE PROBLEM? STEP 4: IS THE CASE REALISTIC? AUTHENTIC? STEP 5: DOES THE CASE PRESENT A PROBLEM? AN ISSUE? OR A SITUATION? STEP 6: WHAT ARE THE CASE COMPONENTS? STEP 7: COMPANY FACTS AS GIVEN IN THE “SIX STEP ANALYSIS” PRESENTATION OF BUN SUCENTO ( SENT BY PROF. STAM) 2

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW THE METHOD SENT BY PROF. STAM (2) STEP 8: IDENTIFY THE MAJOR INDICATORS OF IC FOR THIS COMPANY AND DETERMINE THE LEVELS TO PREPARE AN IC STATEMENT USE DANISH / JAPANESE GUIDELINES. 3

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW THE METHOD SENT BY PROF. STAM (2) STEP 9: PREPARE AN IC STATEMENT WHICH CAN BE USED AS AN ANNEX TO ACCOUNTING REPORTS. LET ME PUT MY QUESTION TO YOU, DEAR PARTICIPANTS: “FOR THESE ALL THE PROJECT TEAMS SHOULD ADAPT A COMMON METHODOLOGY ( DANISH ? , JAPANESE? OR A COMBO ) AND SHALL WE DO STEP 9? THIS IS INFEASIBLE FOR A PROJECT OF A SHORT DURATION BUT IS FEASIBLE FOR A SCIENTIFIC STUDY LIKE THESIS OR A SCIENTIFIC ARTICLE OR A LONG TERM PROJECT DOES EVERYONE AGREE? “ . 4

PROPOSED ACTION We should develop a COUNTRY KNOWLEDGE STRATEGY REPORT rather than a DETAILED IC COUNTRY STATEMENT OR A SECTORAL BREAKDOWN. 5

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY SO THESE WERE OUR FIRST OBSERVATIONS, BASED ON OUR FIRST INTERVIEW. 0 They rely on human capital heavily. Because they are a small company. They deal with international customers in complex projects. 0 They need to employ very talented, innovative-minded, systematic and very experienced people to meet deadlines with succeful results ! 0 They provide innovative web solutions to companies like Sony, Yahoo, Open University Company Training Programmes (UK), Illinois Bar ( US) 0 They have a small workforce. Expert but a very small number of software professionals. 6

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY HISTORY OF COMPANY http: //www. ilgstudios. com/company. html 0 The company was founded in 2005. In just three years’ time they have become a competitot in the world. 0 They provide innovative web solutions to companies like Sony, Yahoo, Open University Training Programmes ( UK), Illinois Bar ( US) 0 They have a small workforce. Talented but a very small number of software professionals. 7

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW THE METHOD SENT BY PROF. STAM (2) As to Danish Guidelines, Intellectual Capital is built on four foundations: “… four most common classifications or types of knowledge resources, employees, customers, processes and technologies. ” Compare to the three-fold foundation laid in Stam’s thesis: Human Capital, Relational Capital, Structural Capital 8

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW THE METHOD SENT BY PROF. STAM (2) Japanese Guidelines has a completely different approach for assessing the current situation: (1) “Regarding future value creation, degree of difficulty in writing a story supported by indicators varies greatly among corporations. A corporation which has not built sufficient internal control system or which has no experience in preparing reports on factors other than financial information would have difficulties in finding a clue to the preparation of intellectual assets based management report. ” 9

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW THE METHOD SENT BY PROF. STAM (2) Japanese Guidelines has a completely different approach for assessing the current situation: (2) “In such a case, the first step of preliminary work in creating the story on value creation is “SWOT analysis”, that is a method to analyze the strengths and weaknesses identified in the business process from the past to present, and the areas of future business opportunities with high degree of profit earning expectation and associated threats” 10

PROPOSED ACTION We should find the similarities and differences of these methods and find an REALISTIC AND EFFICIENT MIXED METHODOLOGY. 11

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? THERE ARE SIMILARITIES BETWEEN DANISH METHODOLOGY AND STAM METHOD. HOWEVER JAPANESE METHODOLOGY ONLY POINT TO THE RELATIONAL CAPITAL ASPECTS. 12

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? METHOD 1: (STAM METHOD) 1. HUMAN CAPITAL RESOURCES OF ILG 2. STRUCTURAL CAPITAL OF ILG 3. RELATIONAL CAPITAL OF ILG Here follows our observations after the preliminary contacts with the company. 13

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? The red marked items show the observable, obvious advantages. The grey ones show missing answers. Missing because: We have sent the IC resource matrix to the Director, Mr. Misman. He expressed his confusion on the terms. 14

PROPOSED ACTION We have to formulate a simpler matrix to convey to SMEs in the coming weeks. 15

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY The known and unknown Intellectual Capital Items All resources Human • R&D knowledge • Ability to participate in networks • Ability to deal with cultural differences • Contracts definition knowledge • Production and distribution knowledge • Motivation and commitment • Problem solving Organizatio nal • R&D process • Patents • Quality control systems • Brand reputation • Production and assembly • Distribution • Databases • Information systems Relational • Research institutions • Cultural institutions • Social institutions • Government agencies • Customers • Community Physical Monetary • Factory facilities • Equipment • Products • Raw materials • Revenue from in-licensing agreements • Revenue from out-licensing • Revenue from subsidies • We have nıot discussed these with them • International forums • Competition Juries 16

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY; Percentage weightings of ILG’s resources- figures are from BIAL- to be completed for ILG All resources 40% Human 70% R&D Organizatio nal 50% R&D structure knowledge 30% Attitude Relational 60% Scientific community Physical 80% Plants & 15% Customers 10% Products 20% Brand & 10% Government 10% Raw materials 10% Core competencies Monetary 75% Revenues equipment 20% Patents reputation 25% Subsidies agencies 15% National and local community 17

Absolute percentage weightings of ILG’s resourcesfigures are from BIAL- to be completed for ILG All resources 40% 20% Organizatio nal Human 28% R&D 10% Relational Physical 15% Monetary 10% R&D structure 9% Scientific community 8% Plants & equipment 11. 25% Revenues 4% Patents 2. 25% Customers 1% Products 3. 75% Subsidies 4% Brand & reputation 1. 5% Government 1% Raw materials Core competencies 2. 25% National and knowledge 12% Attitude 15% 2% agencies local community 18

RTD Transformation Matrix of ILG- to be prepared later National & local community Revenues 0 Subsidies 0 Plants & Equipment 0 Products R&D knowledge Attitude 0 0 0 25 0 0 5 65 0 100 0 0 0 25 0 0 0 75 0 100 80 0 0 0 0 10 100 0 0 20 0 0 0 100 0 0 100 5 5 0 0 0 70 0 10 10 100 0 0 10 5 5 5 100 0 10 0 15 0 100 0 0 80 0 0 20 100 20 0 0 40 10 100 0 5 100 0 0 20 100 0 Raw materials 0 0 0 100 Scientific community 0 0 0 75 0 0 0 Government agencies 0 75 0 0 0 National & local community 0 0 0 0 R&D structure 15 5 0 10 0 0 Patents 85 0 0 0 10 0 0 Brand & Reputation 30 10 10 0 Core competencies 30 0 0 20 0 0 30 0 0 10 0 R&D knowledge 50 10 0 0 0 0 30 10 0 0 0 10 10 Attitude 5 60 Customers Core competencies Brand & Reputation Patents Government agencies Customers Subsidies Revenues Raw materials Products Plants & equipment Scientific community R&D structure 0 0 10 60 100 19

0, 00 0, 94 0, 00 0, 80 0, 00 0, 20 0, 00 0, 00 0, 45 0, 00 Attitude 2, 81 R&D knowledge 0, 00 0, 56 7, 31 0, 00 11, 25 0, 00 2, 81 0, 00 3, 75 0, 00 0, 80 8, 00 0, 20 0, 00 1, 00 0, 00 0, 00 1, 00 0, 45 0, 00 6, 30 0, 00 0, 90 9, 00 0, 00 0, 23 0, 11 2, 25 0, 00 0, 15 0, 00 0, 23 0, 00 1, 50 0, 00 1, 80 0, 00 0, 45 2, 25 2, 00 0, 00 4, 00 10, 00 0, 20 4, 00 0, 80 4, 00 0, 20 2, 00 0, 00 28, 00 0, 00 Core competencies 6, 40 0, 00 Brand & reputation 0, 00 Patents 0, 00 R&D structure 0, 00 Government agencies National & local community 0, 00 Customers 0, 56 Scientific community Raw materials Subsidies 0, 00 Products Plants & Equipment 11, 25 Revenues Resource weight Transformation Matrix of ILG- to be prepared later 3, 75 Subsidies 0, 00 8, 00 Plants & Equipment 0, 00 1, 00 Products 0, 60 0, 00 1, 00 Raw materials 0, 00 1, 00 9, 00 Scientific community 0, 00 0, 00 2, 25 Customers 1, 69 0, 00 0, 00 1, 50 Government agencies 0, 00 1, 13 0, 00 0, 00 2, 25 National & local community 0, 00 0, 00 1, 50 0, 00 1, 00 0, 00 0, 00 4, 00 Patents 3, 40 0, 00 0, 00 0, 40 0, 00 4, 00 Brand & Reputation 1, 20 0, 40 0, 00 0, 40 0, 00 2, 00 Core competencies 0, 60 0, 00 0, 40 0, 00 0, 60 0, 00 0, 20 0, 00 14, 00 2, 80 0, 00 0, 00 8, 40 2, 80 0, 00 0, 00 1, 20 0, 00 1, 20 22, 99 4, 83 0, 56 8, 80 0, 00 0, 40 3, 25 0, 85 1, 20 3, 95 11, 60 12, 68 10, 00 R&D structure 28, 00 R&D knowledge 12, 00 Attitude 100, 00 7, 20 1, 88 22, 56 12, 00 4, 46 100, 00 20

Intellectual Capital Navigator for ILG – to be prepared Monetary Relational Human Physical Organizational 21

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? METHOD 2: (DANISH GUIDELINE CLASSIFICATION) (1) Let me put some equations to explain similarities. 1. EMPLOYEES OF ILG = HUMAN CAPITAL 22

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? They have a very small but expert programmers and IS professionals. Since the grup is small they are working at a much greater risk compared to larger companies ( due to absenteeism etc. ). But a small group would also mean closer relations, a better communication and a more synchronized organizational environment. 23

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? METHOD 2: (DANISH GUIDELINE CLASSIFICATION) (2) 2. CUSTOMERS OF ILG = (RELATIONAL CAPITAL) – (VENDORS) – (COMPETITORS) – (OTHER BUSINESS / ACADEMIC NETWORKS) 24

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? METHOD 2: (DANISH GUIDELINE CLASSIFICATION) (3) They have local and international customers. Their international customers lay the way to new expanded networks. They continue to do new projects for existing clients. They rely on international customers as their major competitive advantage. (ref: http: //www. ilgstudios. com/clients. html) 25

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? METHOD 2: (DANISH GUIDELINE CLASSIFICATION) (4) Here is a very good observation on the success of ILG: http: //www. bilgicagi. com/index. php? option=com_content&task=vie w&id=130&Itemid=139&limit=1&limitstart=1 26

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? THE MAJOR MISSING POINT IN DANISH METHODOLOGY IS: HOW SHALL WE MEASURE A FIRM’S CAPACITY TO BUILD AND REMAIN IN SUSTAINABLE NETWORKS? 27

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? A VERY GOOD POINT MADE BY A TURKISH INNOVATION SPECIALIST, MS. Şirin Elçi: (1) (ref: http: //www. bilgicagi. com/index. php? option=com_content&task=view&id=130&Itemid =139&limit=1&limitstart=1) HOW SHALL WE MEASURE A FIRM’S CAPACITY TO BUILD AND REMAIN IN SUSTAINABLE NETWORKS? “Tüm dünyada özel sektörün olsun, kamunun olsun, rekabetçiliği arttırmak için uygulamaya koyduğu tüm mekanizmalarda ‘olmazsa olmaz’ koşul olarak farklı kesimlerin işbirlikleri ve etkileşimleri teşvik edilirken bu tür bir kuralın ana şartlar arasında bulunmasını anlamak güç. Hele ki inovasyon sayesinde gittikçe küçülen, sınırların ve mesafelerin artık pek bir anlam ifade etmediği günümüz dünyasında. . . “ 28

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? A VERY GOOD POINT MADE BY A TURKISH INNOVATION SPECIALIST, MS. Şirin Elçi: (2) “Bu ‘mesafesizlik’ avantajını kullanarak oluşturduğu ağlar sayesinde önemli başarılara imza atan firmalarımız benzer anlayışların ortadan kalkmasının ne kadar önemli olduğunu bize hatırlatıyor. Bilkent’teki teknoloji geliştirme bölgesinde iki genç girişimcimizin iki yıl önce kurduğu ILG Bilişim’in bu kadar kısa sürede küresel boyutta faaliyet gösteren bir firma halini almasının da sırrı burada. 29

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? A VERY GOOD POINT MADE BY A TURKISH INNOVATION SPECIALIST, MS. Şirin Elçi: (3) “ILG, sahip olduğu ağlar sayesinde Sony’den Yahoo’ya kadar, alanlarında dünya lideri şirketler için inovatif ürünler geliştiriyor. ABD’nin çeşitli eyaletlerindeki kurumların ihtiyaçlarını da yine bu ağlar sayesinde saptayıp, en uygun çözümleri Ankara’dan sunuyor. ILG’nin patronlarından Barış Misman’la konuştuğunuzda bu kapıları açan anahtarın sahip oldukları ağlardaki ilişkileri yönetme başarıları olduğunu görüyorsunuz. Bu sayede ağları sürekli genişliyor ve ağın her yeni üyesi yeni fırsatlarla beraber geliyor” 30

PROPOSED ACTION We shall then find an EXTENDED CLASSIFICATION FOR RELATIONAL CAPITAL. 31

PROPOSED ACTION We should use realiable statistics to be used in our teaching notes to identify Turkey’s sustainable networking capacity. 32

PROPOSED ACTION We should study “networking statistics” of Turkey. Please note a quote from Ms. Elçi again: “İstatistiklere baktığımızda Türk firmaların ağlara katılma konusunda diğer ülkelerdeki rakiplerinden geri olmadıklarını görüyoruz. Örnekse, Avrupa Komisyonu’nun ‘Lizbon Stratejisi’ kapsamında mevcut durumu ve ilerlemeleri izlemek için kullandığı araçlardan biri olan Innobarometer’ın 2006 sonuçları kuzey ülkelerinin yanında bu alanda en iyi ülkenin Türkiye olduğunu gösteriyor. Araştırmanın sonuçlarına göre Finlandiya, İsveç, Danimarka, Norveç ve Türkiye’deki ‘kümemsi yapılar’da faaliyet gösteren şirketler, en az iki iş ağına aktif olarak katılıyor ve kümedeki 10 şirketten yaklaşık dokuzu en az bir ağa anlamlı şekilde dahil oluyor. …” 33

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? METHOD 2: (DANISH GUIDELINE CLASSIFICATION) (4) 3. PROCESSES AND TECHNOLOGIES OF ILG = STRUCTURAL CAPITAL 34

ILG STUDIOS – A TURKISH SOFTWARE ENGINEERING COMPANY NOW HOW TO ANALYZE KNOWLEDGE RESOURCES? METHOD 3: (JAPANESE GUIDELINE CLASSIFICATION) STRENGTHS AND WEAKNESSES OF ILG I. STRENGTHS OF ILG : II. WEAKNESSES OF ILG : 35