Structural Capital consists of all tangible intangibles. This may sound paradoxical at first glance, but is easily understood when viewed as documentation of processes or a database of knowledge. Microsoft has huge volumes of Structural Capital in the form of code libraries and marketing processes.

Structural capital is the intellectual value that remains with the enterprise when people leave. Structural capital includes the content within the enterprise knowledge asset, as well as the intellectual investment that the enterprise has made in the physical, technical and business culture infrastructures that support its activities. Structural capital serves two purposes: to create and maintain the enterprise knowledge asset, and to enable enterprise connectivity. Structural capital is most valuable when it adeptly and unobtrusively supports enterprise activities. However, managers and professionals may need to acquire new skills in order to effectively use the overabundance of content that structural capital is capable of delivering.

Structural capital is composed of the following elements.

Network :
The network is the infrastructure used for sharing knowledge. It is the part of the structural capital on which knowledge is stored so that it can be used by anyone in the company. Effectively becoming not just an Intranet or Extranet, but an 'Intrallectualnet'.

Knowledge management :
Both the quality of information and the way in which that information is stored and can be retrieved must be managed in order to ensure the most efficient use of the available knowledge. Databases are very useful for this purpose, but one must always keep in mind that "Garbage In - Garbage Out" is of great importance when capturing, managing and re-distributing knowledge.

The Network is the infrastructure used for communicating. It is the part of the structural capital on which knowledge is captured, stored and distributed so that it can be used by anyone in the company. The Network may be

• An Intranet is a way of capturing, storing and disseminating a company's knowledge.

• An Extranet is a way to share company knowledge with other companies and exploit this information to boost commercial goals.

Network technology will radically affect the way that people communicate; with video conferencing, however remote the location people can 'meet' and socialise. After overcoming the initial embarrassment of using the technology, people will socialise far more often but perhaps for shorter durations, because distance is irrelevant. Communities will be formed from people with shared interests, both professional and social. This new way of 'networked communicating' will very soon become a normal way of communication. Future developments of IC integration with Networking could include a Ubiquitous Interface, or UBI, that would seamlessly codify knowledge about each individual, and supply fast access to this data along with simple and intuitive interfaces for interpersonal communication such as voice, video and data.

The whole concept is not possible without having a high-speed network. The network should, for instance, be able to carry live video in multiple concurrent streams in order to make virtual conferencing possible. For this, data compression techniques are needed to save cost of shipping and time.

Filling in the technological requirements requires the sharing of information and technology. It will then become easier to write vertical applications without having to 're-invent the wheel'. This reduces waste of money and resources but it also prevents the possibility of having people excluded from the virtual community because they lack certain knowledge, skills or capabilities.

As mentioned earlier, one of the key factors in the success of the virtual community is the acceptance of new technology. The more people use it, the higher the acceptance will be, which will in turn lead to more users. Eventually the penetration of new technology will reach critical mass, where it is accessible to anyone with the infrastructure available to access it.

We've seen that as a part of human capital, knowledge is one of the most valuable assets of a company. It is clear then that it makes sense for companies to capture and retain that knowledge by putting it into structural capital, but also to find ways of protecting, dispersing and increasing that knowledge. It takes knowledge management to do all that.

An intranet can be very useful in capturing and dispersing information throughout a company, however an intranet that does only those two things is not necessarily very useful. If the captured knowledge is not managed in such a way that it is distributed to the right people at the right time, it will soon loose its credibility. In fact, too much knowledge can easily become over-information and have an averse effect. The quality of information is far more important than the quantity so that 'less = more'.

Improvements need to be made in a company's knowledge capturing skills because that is how it increases its 'owned' knowledge. By capturing this information and ensuring that it is distributed on demand in an easy to use format, the company's' knowledge can be used profitably by anyone who is allowed access to it.

A company must therefore invest in methods of capturing and analysing data which will continuously increase its 'owned' knowledge. It must also be able to distribute the information that it has learnt so as to enable people to make more informed decisions.

In the 'Background Information' section under 'References' you will find the example of how Cisco Systems manage the content of their Intranet.

Network technology allows companies to both capture and distribute knowledge in the form of Intranet (within the company itself) and/or Extranet (also available to selected suppliers and clients). By using these networks as a knowledge management tool, a company effectively creates what is called an 'Intrallectualnet', providing and capturing the right information at the right time.

There are many ways that IT can serve as a benefactor to the knowledge capturing and codification process. Although an intranet is often interpreted as a Web driven system, this type of system does not always allow for swift input and retrieval of knowledge. IBM has developed a large Intrallectualnet using Lotus Notes and Domino for Web based access. The trick is the underlying database technology that Notes provides. Microsoft Exchange Server is also a very useful platform for capturing and retrieving knowledge, as it is basically a client/server database system with a fancy User Interface that is highly customizable.

To create a competitive advantage, it is not enough for a company to know what everyone else knows; a company can only be successful if it possesses knowledge that other companies don't. This can be achieved by patenting or by protection through copyrights. Exclusive knowledge is profitable knowledge!

In the 'Background Information' section under 'References' you will find the example of how Vacuvin protected their knowledge by patenting technology.