What you should know about knowledge management

The proper collection, storage, dissemination, and use of intellectual capital

can spell the difference between a dynamic and innovative company and a mediocre also-ran. It is incumbent upon IT executives to understand and use Knowledge Management to effectively conduct e-commerce and other critical business activities and place their organizations in a better competitive position.

Business Imperatives:

• Information management can collect and maintain accurate data but needs further manipulation and analysis to turn information into knowledge. The benefits that KM can provide include accelerated decision-making, “out of the box” innovative thinking, more efficient intra- and inter-organization communication, and streamlined business processes. IT executives who appreciate the difference between information and knowledge are better able to decide how each should be managed and controlled.
• The convergence of enterprise document management systems (EDMSs), the Web and customer relationship management (CRM) software give IT executives an opening to evangelize KM. IT executives that comprehend the dynamics of this convergence will be able to choose the appropriate KM support tools and implementation strategies for their situations.
• KM is not a technical solution in search of a problem. IT executives should understand that knowledge is highly dependent on individuals. To be successful, KM implementations must be employee-centric as well as in line with business goals. IT executives should be working with their peers in other business units to create dynamic KM solutions.

KM is not a new concept. Without some form of KM, most companies could not function profitably. The fact that companies consist of people that are making use of information is the most rudimentary form of KM (or knowledge mismanagement, as the case may be). The knowledge acquired and maintained by an organization is one of its most important assets. How organizations obtain and use their knowledge provides the KM foundation.

More attention is focusing on KM due to the information explosion that Internet continues to fuel. The sheer amount of internally and externally generated information

that is of importance to the organization has simply become unwieldy.

Basic definitions are useful in understanding KM. Information is comprised of data in context. Information viewed relative to other information and filtered by user

and corporate experience and strategy is knowledge. Explicit knowledge is generally of the type stored electronically in company databases and manually in

hardcopy media. Tacit (or implicit) knowledge is what employees have in their heads and is more difficult to manage. A KM strategy that does not take into

account both types of knowledge will not produce the desired results.

A central characteristic of knowledge is that it can be acted upon. If a piece of knowledge does not indicate an action pertaining to a business activity or corporate

objective, it is merely extraneous information. Capturing, organizing, manipulating, sharing, and using this knowledge is the practice of knowledge management (KM).

One cannot overstate the people aspect of KM. They are the ones who possess the tacit knowledge and make use of explicit knowledge.

Today, KM has come to include all or portions of such areas as information access, workflow, document management, data mining, business intelligence, collaborative business processes and the technology that supports them. For this reason, no single KM “solution” or even unifying model exists. It is important for IT executives to realize that KM is a philosophy – a way of doing business. As such, it is more of a business issue than a technical one and is specific to each organization. The role of the IT executive in KM is to create a KM-facilitating infrastructure using Intranets, database search tools, collaborative software, and other technology.

Many of the current KM support tools revolve around managing the media where most explicit corporate knowledge resides – documents. This includes contracts, proposals, accounting reports, project status reports, strategic plans, e-mails, meeting minutes, miscellaneous correspondence, technical and non-technical asset documentation and training manuals to name several. Some vendors that provide traditional document management solutions are now marketing their products as KM solutions. Integrated enterprise document management systems (EDMSs) are moving toward more Web-enablement, integrated workflow, and heterogeneous format search capabilities.

Customer relationship management (CRM) functions such as customer profiling and content personalization are specific manifestations of KM. CRM includes the analytic processing (transforming information into knowledge) of multiple sources of customer data with a definite corporate strategic objective in mind such as increasing sales. As exciting as CRM may seem, it is merely the tip of the iceberg as far as exploiting the potential of KM.

Depending on the existing corporate culture, organizations can implement KM gradually or rapidly. The difference lies in whether the employee views a selected KM strategy as a help or a hindrance in their daily work. One way organizations can introduce KM process development into an organization is to make it a final phase of business process reengineering. KM may often provide the solutions to pressing business problems. An effective KM implementation strategy is to start small and gradually expand. Companies can localize an initial KM program to a business unit, workgroup, or more appropriately a “virtual” workgroup.

Virtual workgroups consist of participants who are geographically or organizationally dispersed but collaborate on specific projects or perform similar work. IT’s responsibility is to provide the electronic means to communicate and share ideas and information. Then IT can apply the same approach to other workgroups or communities of interest. The purpose is to use explicit and tacit knowledge together to “seed” corporate brainstorms. In this way, business processes continually improve and innovation becomes the norm not the exception.

It would be difficult to perform KM activities without first deciding on the knowledge base. IT executives should identify or develop a good knowledge base that is both dynamic and widely accepted as representing explicit corporate knowledge or at least as containing information that can be used to reap KM benefits. This does not mean a large data warehousing effort although businesses can leverage an existing data warehouse for KM purposes.

RFG believes that the Internet is increasing competitive pressures and placing a premium on corporate efficiency, speed, and innovation. KM is a way for IT executives to facilitate corporate understanding of the benefits of KM and to use technology they may already have for this purpose. KM has been something of a “Holy Grail” for organizations whereby all knowledge necessary for decision-making is quickly accessible and employees efficiently and effectively collaborate on achieving company goals and objectives. With the wealth of knowledge available today, IT executives should be considering ways to manage it and help create a more proactive and innovative corporate culture.

© 2000 Robert Frances Group. All rights reserved. Jim Cordes is a Senior Research Analyst at the Robert Frances Group. He can be reached at jcordes@rfgonline.com or 203-291-6900.