What Is Knowledge Management?
Knowledge Management is one of
the hottest topics today in both the industry world and information research
world. In our daily life, we deal with huge amount of data and information.
Data and information is not knowledge until we know how to dig the value out
of of it. This is the reason we need knowledge management. Unfortunately,
there's no universal definition of knowledge management, just as there's no
agreement as to what constitutes knowledge in the first place. We chose the
following definition for knowledge management for its simplicity and broad
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.
Management may be viewed in terms of:
how do you increase the ability of an individual in the organisation
to influence others with their knowledge
Its approach varies from organization to organization. There
is no limit on the number of processes
It needs to be chosen only after all the requirements of a
knowledge management initiative have been established.
- 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.
What Is Knowledge Management
Knowledge management draws
from a wide range of disciplines and technologies:
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.
- Cognitive science
- Expert systems, artificial intelligence
and knowledge base management systems (KBMS)
- Computer-supported collaborative
- Library and information science
- Technical writing
- Document management
- Decision support systems
- Semantic networks
- Relational and object databases
- Organizational science
- object-oriented information
- electronic publishing technology,
hypertext, and the World Wide Web; help-desk technology
- full-text search and retrieval
- performance support systems
The History of Knowledge Management
1. 70's, A
number of management theorists have contributed to the evolution of knowledge
- Peter Drucker: information and
knowledge as organizational resources
- Peter Senge: "learning
- Leonard-Barton: well-known case
study of "Chaparral Steel ", a company having knowledge management
- 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
3. 90's until now,
- A number of management consulting
firms had begun in-house knowledge management programs
- Knowledge management was introduced
in the popular press, the most widely read work to date is Ikujiro Nonakas
and Hirotaka Takeuchis The Knowledge-Creating Company: How Japanese
Companies Create the Dynamics of Innovation (1995)
- 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
The Value of 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
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.
Knowledge Management Today
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 Management Drivers
The graph below shows the results
of a recent IDC study in which corporations cited various objectives for knowledge
- Knowledge Attrition: 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: 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: 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
- E-Learning: 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.
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.
Technologies That Support
These technologies roughly correlate to four main stages of the KM life cycle:
All of these stages are enhanced by
effective workflow and project management.
- Knowledge is acquired or captured
using intranets, extranets, groupware, web conferencing, and document management
- 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
- 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.
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.
Present and Future State of
The Future of Knowledge Management
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.
The Effect of Knowledge Management
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.
The Implications of Knowledge
- Database Users: 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.
- Database Developers:
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.
- Database Administrators:
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.
- General Public:
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.
Organizations are realizing that intellectual
capital or corporate knowledge is a valuable asset that can be managed as effectively
as physical assets in order to improve performance. The focus of knowledge
management is connecting people, processes and technology for the purpose of
leveraging corporate knowledge. The database professionals of today are
the Knowledge Managers of the future, and they will play an integral role
in making these connections possible.