This document discusses the differences between tactical and strategic technology licensing from a business operations perspective. It explores the resources, organization, and business processes needed to transform from tactical to strategic licensing. Specifically, it addresses assessing licensable technologies, ensuring licensing processes are in place, structuring licensing organizations like profit/loss centers, and determining if licensing is a viable business strategy. The document provides questions to help companies evaluate where they are on the tactical to strategic licensing continuum.

1. Tactical vs
Strategic
Technology
Licensing
(Part II)

2. In Part I of “Tactical vs Strategic
Licensing” (last month’s blogpost), we
focused on the differences between
tactical and strategic technology
licensing, including the potential business
usefulness of strategic licensing. Here we
explore in greater detail the “right”
business processes, resources, and
organization for a successful
transformation from tactical to strategic
technology licensing.

3. Resources OrganizationBusiness Process
From an operations
perspective, the
transformation from
tactical to strategic
licensing requires a
supporting evolution
in three distinct
areas:

4. To begin to understand where
you are as a company along the
“tactical” to “strategic” licensing
continuum, consider fully the
answers to the following
questions:

5. For example, if you plan to license technologies which you
are using yourself to support the products you sell, you’ll
need to adopt a “business case” approach to assess the
impact of licensing to third parties on your business that’s
supported by self-manufacturing. A “best practice”
followed by the most successful integrated
manufacturing/licensing companies is the development of
a formal, comprehensive business case approach, similar
in depth and breadth to the company’s existing five-year
business plans for its product lines.
Do we have the right
processes in place?

6. Assuming that you decide to engage in technology
licensing as a business per se, how are you going to
generate licensable technologies on an ongoing basis?
What is the interaction between the licensing group and
the technology development groups? In most cases,
operating units or business units continue to fund R&D,
with the licensing group ge ing at least a voice in the early
stages of the technology development process.
Do we have licensable
technologies?

7. The transition from tactical to strategic o en involves
shi s in organization. Companies that have begun to treat
licensing as an identifiable and separate business activity
o en put someone with successful P&L experience in
charge. The group is then “built-out” with a full-time
supporting cast dedicated to commercializing the
licensable technologies. The performance of strategic
licensing organizations is measured in terms of income
generated.
A graphic depicting the “tactical” to “strategic” continuum
is shown to the right. It provides a snapshot of the extent
to which a licensing organization “looks” like a P&L.
Does our licensing
organization look like a P&L?

8. Technology licensing can be a useful vehicle for
technology-rich companies. In Part III of “Tactical vs
Strategic Licensing” (our next month’s blogpost), we’ll
provide you with a checklist of key issues to address and
which will lead you to the answer to this question!
Is licensing a viable business
strategy element for you?

9. h p://www.prakteka.com/contact-us/
For a customized plan for your needs, contact us at
h p://www.prakteka.com/category/technology-commercialization/
For more on creating value by
commercializing technology, see
We at Prakteka LLC developed our expertise in market penetration
strategies in the context of numerous and diverse client
assignments, all focused on using technology to create business
value. We are here to help you answer business-critical
technology questions, too.