Knowledge management
Knowledge management (KM) comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences. Such insights and experiences comprise knowledge, either embodied in individuals or embedded in organizational processes or practice.
An established discipline since 1991 KM includes courses taught in the fields of business administration, information systems, management, and library and information sciences. More recently, other fields have started contributing to KM research; these include information and media, computer science, public health, and public policy.
Many large companies and non-profit organizations have resources dedicated to internal KM efforts, often as a part of their 'business strategy', 'information technology', or 'human resource management' departments. Several consulting companies also exist that provide strategy and advice regarding KM to these organizations.
KM efforts typically focus on organizational objectives such as improved performance, competitive advantage, innovation, the sharing of lessons learned, integration and continuous improvement of the organization. KM efforts overlap with organizational learning, and may be distinguished from that by a greater focus on the management of knowledge as a strategic asset and a focus on encouraging the sharing of knowledge. KM efforts can help individuals and groups to share valuable organizational insights, to reduce redundant work, to avoid reinventing the wheel per se, to reduce training time for new employees, to retain intellectual capital as employees turnover in an organization, and to adapt to changing environments and markets
In other words, Knowledge Management is a process that, continuously and systematically, transfers knowledge from individuals and teams, who generate them, to the brain of the organization for the benefit of the entire organization.
KM efforts typically focus on organizational objectives such as improved performance, competitive advantage, innovation, the sharing of lessons learned, and continuous improvement of the organization. KM efforts overlap with Organizational Learning, and may be distinguished from by a greater focus on the management of knowledge as a strategic asset and a focus on encouraging the exchange of knowledge.
What is knowledge management?
At Knowledge Praxis, we define knowledge management as a business activity with two primary aspects:
Treating the knowledge component of business activities as an explicit concern of business reflected in strategy, policy, and practice at all levels of the organization.
Making a direct connection between an organizations intellectual assets both explicit [recorded] and tacit [personal know-how] and positive business results.
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In practice, knowledge management often encompasses identifying and mapping intellectual assets within the organization, generating new knowledge for competitive advantage within the organization, making vast amounts of corporate information accessible, sharing of best practices, and technology that enables all of the above including groupware and intranets.
That covers a lot of ground. And it should, because applying knowledge to work is integral to most business activities.
Knowledge management is hard to define precisely and simply. (The definition also leapfrogs the task of defining "knowledge" itself. Well get to that later.) Thats not surprising. How would a nurse or doctor define "health care" succinctly? How would a CEO describe "management"? How would a CFO describe "compensation"? Each of those domains is complex, with many sub-areas of specialization. Nevertheless, we know "health care" and "management" when we see them, and we understand the major goals and activities of those domains.
Few KM Definitions
Prof. Gopinath defines the Knowledge Management in three different views:
• Knowledge Management is a right principle for right application and right use.
• Knowledge Management is a field of handling knowledge in different stages. It focuses around creation, capturing, nurturing, documenting, disseminating, absorbing and conserving for development of human resources.
• Knowledge Management is a process of enriching human resource, material resource and environment (organization’s environment, work environment) preservation.
R. Gregory Wenig (1998) defines KM from organizational perspective. According to his definition, Knowledge Management for the organization consists of activities focused on the organization gaining knowledge from its own experience and from the experience of others, and on the judicious application of that knowledge to fulfill the mission of the organization.
Tom Davenport (1998, brint.com) says KM is: “Process of capturing, distributing, and effectively using knowledge.
Ellen Knapp (1998 brint.com) defines KM as the art of transforming information and intellectual assets into enduring value for an organization’s clients and its people.
Simple Definition:
Knowledge Management (KM) refers to a multi-disciplined approach to achieving organizational objectives by making the best use of knowledge. KM focuses on processes such as acquiring, creating and sharing knowledge and the cultural and technical foundations that support them.
Knowledge Management may be viewed in terms of:
People – how do you increase the ability of an individual in the organisation to influence others with their knowledge
Processes – Its approach varies from organization to organization. There is no limit on the number of processes
Technology – It needs to be chosen only after all the requirements of a knowledge management initiative have been established.
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Or
Culture –The biggest enabler of successful knowledge-driven organizations is the establishment of a knowledge-focused culture
Structure – the business processes and organisational structures that facilitate knowledge sharing
Technology – a crucial enabler rather than the solution.
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1. 70's, A number of management theorists have contributed to the evolution of knowledge management
Peter Drucker: information and knowledge as organizational resources
Peter Senge: "learning organization"
Leonard-Barton: well-known case study of "Chaparral Steel ", a company having knowledge management strategy
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2. 80's,
Knowledge (and its expression in professional competence) as a competitive asset was apparent
Managing knowledge that relied on work done in artificial intelligence and expert systems
Knowledge management-related articles began appearing in journals and books
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3. 90's until now,
A number of management consulting firms had begun in-house knowledge management programs
The International Knowledge Management Network(IKMN) went online in 1994
Knowledge management has become big business for such major international consulting firms as Ernst & Young, Arthur Andersen, and Booz-Allen & Hamilton
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Arent we managing knowledge already? Well, no. In fact, most of the time were making a really ugly mess of managing information. In practice, the terms information and knowledge are often used interchangeably by business writers.
Lets choose a simple working definition and get on with it:
Knowledge has two basic definitions of interest. The first pertains to a defined body of information. Depending on the definition, the body of information might consist of facts, opinions, ideas, theories, principles, and models (or other frameworks). Clearly, other categories are possible, too. Subject matter (e.g., chemistry, mathematics, etc.) is just one possibility.
Knowledge also refers to a persons state of being with respect to some body of information. These states include ignorance, awareness, familiarity, understanding, facility, and so on.
Types of Knowledge from Knowledge Management point
Skills: These are personalized skills possessed by individuals. Many times experts explicit their skills so that their knowledge can be used more effectively by users.
Cases are stories of real time events that give practical knowledge to the users. Thus we learn how the world works in real life. This is the best way to learn from previous mistakes and achieve from previous successes.
Processes are supposed to be high-level skills that are systematized to provide most abstract form of knowledge. Out of many skills required for a work, few are worked out into processes to make them standards.
Stages of Knowledge Management
Michael Koenig explained three stages of Knowledge Management:
1.) The first stage of KM all about use of IT (intranets) for knowledge sharing and coordination across the enterprise.
2.) The second stage added focus on human and cultural factors as essential in getting humans to implement KM.
3.) The third stage is the awareness of the importance of content- and, in particular, an awareness of the importance of the retrievability and therefore of the arrangement, description, and structure of that content.
Why do we need to manage knowledge? Some of the specific business factors, including:
Marketplaces are increasingly competitive and the rate of innovation is rising.
Reductions in staffing create a need to replace informal knowledge with formal methods.
Competitive pressures reduce the size of the work force that holds valuable business knowledge.
The amount of time available to experience and acquire knowledge has diminished.
Early retirements and increasing mobility of the work force lead to loss of knowledge.
There is a need to manage increasing complexity as small operating companies are trans-national sourcing operations.
Changes in strategic direction may result in the loss of knowledge in a specific area.
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To these paraphrases observations we would add:
Most of our work is information based.
Organizations compete on the basis of knowledge.
Products and services are increasingly complex, endowing them with a significant information component.
The need for life-long learning is an inescapable reality.
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In brief, knowledge and information have become the medium in which business problems occur. As a result, managing knowledge represents the primary opportunity for achieving substantial savings, significant improvements in human performance, and competitive advantage.
Its not just a Fortune 500 business problem. Small companies need formal approaches to knowledge management even more, because they dont have the market leverage, inertia, and resources that big companies do. They have to be much more flexible, more responsive, and more "right" (make better decisions) because even small mistakes can be fatal to them.
Knowledge management draws from a wide range of disciplines and technologies:
Cognitive science
Expert systems, artificial intelligence and knowledge base management systems (KBMS)
Computer-supported collaborative work (groupware)
Library and information science
Technical writing
Document management
Decision support systems
Semantic networks
Relational and object databases
Simulation
Organizational science
object-oriented information modeling
electronic publishing technology, hypertext, and the World Wide Web; help-desk technology
full-text search and retrieval
performance support systems
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Although around 20 kinds of disciplines and study areas were listed above, there is no way to include all of the related subjects to knowledge management.
Some benefits of KM correlate directly to bottom-line savings, while others are more difficult to quantify. In today's information-driven economy, companies uncover the most opportunities — and ultimately derive the most value — from intellectual rather than physical assets. To get the most value from a company's intellectual assets, KM practitioners maintain that knowledge must be shared and serve as the foundation for collaboration. Yet better collaboration is not an end in itself; without an overarching business context, KM is meaningless at best and harmful at worst. Consequently, an effective KM program should help a company do one or more of the following:
Foster innovation by encouraging the free flow of ideas
Improve decision making
Improve customer service by streamlining response time
Boost revenues by getting products and services to market faster
Enhance employee retention rates by recognizing the value of employees' knowledge and rewarding them for it
Streamline operations and reduce costs by eliminating redundant or unnecessary processes
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These are the most prevalent examples. A creative approach to KM can result in improved efficiency, higher productivity and increased revenues in practically any business function.
According to a recent IDC report, knowledge management is in a state of high growth, especially among the business and legal services industries. As the performance metrics of early adopters are documenting the substantial benefits of knowledge management, more organizations are recognizing the value of leveraging organizational knowledge. As a result, knowledge management consulting services and technologies are in high demand, and knowledge management software is rapidly evolving.
The main drivers behind knowledge management efforts are:
Knowledge Attrition:[/b] Despite the economic slowdown, voluntary employee turnover remains high. A recent survey by the global consulting firm Drake Beam Morin revealed an average voluntary employee turnover rate of 20 percent with 81 percent of organizations citing employee turnover as a critical issue. Estimated annual costs of employee turnover was a staggering $129 million per organization. Much of this cost is due to knowledge attrition, which can be effectively minimized using knowledge management techniques.
Knowledge Merging:[/b] Since 1980, the annual value of mergers has risen 100 fold reaching a cumulative $15 trillion in 1999. Over 32,000 deals were announced, triple the number of 10 years earlier and more than 30 times as many as in 1981. The recent frenzy of corporate mergers coupled with the increased need to integrate global corporate communications requires the merging of disparate and often conflicting knowledge models.
Content Management:[/b] The explosion of digitally stored business-critical data is widely documented. Forester Research estimates that online storage for Global 2,500 companies will grow from an average of 15,000 gigabytes per company in 1999 to 153,000 gigabytes by 2003, representing a compound annual growth rate of 78%. As the volume of digital information expands, the need for its logical organization is critical for purposes of information retrieval, sharing and reuse.
E-Learning:[/b] As the economy becomes more global and the use of PCs more pervasive, there has been a dramatic increase in e-learning, also known as computer based training. E-learning is closely linked to and overlapping with, but not equal to knowledge management. E-learning can be an effective medium for knowledge management deliverables.
The graph below shows the results of a recent IDC study in which corporations cited various objectives for knowledge management efforts:
Activities related to these objectives include: creating knowledge sharing networks that facilitate a corporate knowledge culture, developing knowledge leaders, optimizing intellectual capital by producing knowledge management solutions such as codification strategies and knowledge bases, and estimating revenue and efficiency gains resulting from knowledge management in terms of return on investment (ROI).
Although 65% of organizations that are currently implementing KM initiatives have not measured the impact of their performance, large revenue gains and efficiency improvements have been recorded by numerous major corporations. For instance: Ford Motor Company accelerated its concept-to-production time from 36 months to 24 months. The flow on value of this has been estimated at US $1.25 billion, The Dow Chemical Company saved $40 million a year in the re-use of patents, Chase Manhattan, one of the largest banks in the US, used Customer relationship management KM initiatives to increase its annual revenue by 15%, and Pfizer credits KM practices for discovering the hidden benefits of the Viagra drug.
The following diagram reflects the main technologies that currently support knowledge management systems.
These technologies roughly correlate to four main stages of the KM life cycle:
Knowledge is acquired or captured using intranets, extranets, groupware, web conferencing, and document management systems.
An organizational memory is formed by refining, organizing, and storing knowledge using structured repositories such as data warehouses.
Knowledge is distributed through education, training programs, automated knowledge based systems, expert networks.
Knowledge is Applied or leveraged for further learning and innovation via mining of the organizational memory and the application of expert systems such as decision support systems.
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All of these stages are enhanced by effective workflow and project management.
Currently, communities of practice such as the Knowledge Management Network and the development of standards and best practices are in a mature stage of development. KM curricula such as certification, corporate training and university graduate certificate programs are on the rise. Techniques such as data mining and text mining that use KM for competitive intelligence and innovation are in the early stages of development. Finally, organizations are investing heavily in ad hoc KM software that facilitates organizational knowledge. The chart below estimates the state of their current and future KM activities.
In the next several years ad-hoc software will develop into comprehensive, knowledge aware enterprise management systems. KM and E-learning will converge into knowledge collaboration portals that will efficiently transfer knowledge in an interdisciplinary and cross functional environment. Information systems will evolve into artificial intelligence systems that use intelligent agents to customize and filter relevant information. New methods and tools will be developed for KM driven E-intelligence and innovation.
Multiple corporate databases will merge into large, integrated, multidimensional knowledge bases that are designed to support competitive intelligence and organizational memory. These centralized knowledge repositories will optimize information collection, organization, and retrieval. They will offer knowledge enriching features that support the seamless interoperability and flow of information and knowledge. These features may include: the incorporation of video and audio clips, links to external authoritative sources, content qualifiers in the form of source or reference metadata, and annotation capabilities to capture tacit knowledge. Content will be in the form of small reusable learning objects and associated metadata that provides contextual information to assist KM reasoning and delivery systems.
Database Users:[/b] From business class users to the general public, database users will enjoy a new level of interaction with the KM system including just-in-time knowledge that delivers precise relevant information on demand and in context. More complex, smart systems will translate to optimal usability and less time spent searching for relevant information. For example, data analysts will enjoy simplified access and more powerful tools for data exploitation. The use of knowledge bases can reduce customer service costs by providing customers with easy access to 24/7 self service via smart systems that reduce the need to contact customer service or technical support staff. Database users may even create customized views of knowledge bases that support their needs.
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Database Developers:[/b] The design and development of knowledge based systems will be considerably more complex than current database development methods. Developers must consider the overall technical architecture of the corporation to ensure seamless interoperability. The use of standardized metadata and methods will also facilitate both intra-corporate and inter-corporate interoperability. Making effective physical storage and platform choices will be equally more complex. Both knowledge base developers and administrators must understand the role of the knowledge base in the overall KM system.
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Database Administrators:[/b] Database Administrators will evolve into Knowledge Managers. The knowledge base will store and maintain corporate memory and Knowledge Managers will become the gatekeepers of corporate knowledge. The lines between technical roles such as Web Developer, Data Analyst or Systems Administrator will blur as these systems merge into and overlap with KM systems. DBAs will need to have some knowledge about each of these disciplines.
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General Public:[/b] Even if they are not interacting directly with a knowledge base, the general public will benefit from the secondary effects of improved customer service due to faster access to more accurate information by service providers.
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