Laurel Qi
Knowledge and knowledge management
Knowledge management value chain
Knowledge management systems (KMS)
MM2422 @ Laurel 2
Knowledge management is important,
because…
Knowledge is a key resource. Firm’s value depends on the firm’s
ability to create and manage knowledge.
What are the internet-based knowledge sharing platforms for companies?
A substantial part of a firm’s stock market value is related to its
intangible assets (knowledge, brands, reputation and unique
business processes.)
Knowledge can produce return on investment (ROI).
Information economy - 37% of US labor force are K&I workers; 45%
of US GDP comes from K&I sectors.
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Data, information, knowledge and wisdom
Explanation and firm activities
Data A flow of events or transactions. Raw facts.
Information Organize data into categories of understanding. Monthly,
regional, or store-based reports of total sales.
Knowledge Discover patterns, rules, and contexts where the
knowledge works.
Wisdom Collective and individual experience of applying
knowledge to the solution of problems.
Knowing how to do things effectively and efficiently in ways others
cannot duplicate is prime source of profit and competitive advantage.
E.g., Having a unique build-to-order production system
Dell’s direct
sell model
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Important dimensions of knowledge
◦ Knowledge is a firm asset
Intangible
Creation of knowledge from data, information and
requires organizational resources
Experiences network effects its value increases as
more people share it
◦ Knowledge has different forms
Either explicit (documented) or tacit (residing in minds)
Involves know-how, craft, skill
Involves knowing how to follow procedure
Involves knowing why things happen (causality)
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Explicit Knowledge vs. Tacit Knowledge
◦ Explicit knowledge (leaky knowledge)
… is the policies, procedural guides, white papers,
reports, designs, products, strategies, goals, and
mission of the company
… is the knowledge that has been codified
(documented) in a form that can be distributed to
others or transformed into a process without requiring
interpersonal interaction
The more that knowledge is made explicit,
the more economically it can be transferred.
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Explicit Knowledge vs. Tacit Knowledge
◦ Tacit knowledge (sticky/embedded knowledge)
…is the cumulative store of the experiences, mental
maps, insights, acumen, expertise, know-how, trade
secrets, skill sets, and learning that an organization has
…is usually embedded in human being’s brain, or in a group interactions
Successful transfer or sharing: through associations, internships,
apprenticeships, conversations, etc.
Tacit knowledge is generally
slow and costly to transfer.
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Knowledge Management (KM): business
processes developed in an organization to create,
store, transfer, and apply knowledge.
Knowledge management value chain, or a KM
cycle:
◦ Each stage adds value to raw data and information
as they are transformed into usable knowledge
Knowledge acquisition
Knowledge storage
Add value to Knowledge
Knowledge dissemination
Knowledge application
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Knowledge acquisition
◦ Documenting explicit and tacit knowledge
Structured documents: storing documents, reports,
presentations, best practices (via Document/Content
Management system)
Unstructured documents: e.g., e-mails, social media
Developing online expert networks (find the expert in
the company)
◦ Creating new knowledge
◦ Tracking data from TPS and external sources
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Enterprise Content Management Systems (CMS)
Help organizations to manage both structured and semi-structured/unstructured
information; and both internal and external information.
Help capture, store, retrieve, distribute, preserve knowledge.
Allow users to access external sources of information, e.g., news feeds and research
Starting to incorporate blogs, wikis, and other enterprise social networking tools.
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Knowledge storage
◦ Databases
◦ Document management systems / Electronic
knowledge repository
◦ Role of management:
Support development of planned knowledge storage
systems
Encourage development of corporate-wide schemas
for indexing documents
Reward employees for taking time to update and store
documents properly
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Knowledge dissemination
◦ Portals, wikis
◦ Push e-mail reports, IM
◦ Search engines
◦ Collaboration tools (social media)
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Knowledge application
◦ To provide return on investment, organizational
knowledge must become systematic part of
management decision making and become situated
in decision-support systems
New business practices
New products and services
New markets
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MM2422 @ Laurel 13
Effective knowledge management is 80% managerial and
organizational and 20% technology.
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Knowledge Management Systems (KMS) refers to the
use of modern IT to systemize, enhance, and
expedite intra- and inter-firm KM.
Generally, a KMS consists of:
Communication and collaboration technologies
Storage and retrieval technologies
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The role of people in knowledge management -
new organizational roles and responsibilities
• Chief knowledge officer (CKO)
• Dedicated staff/knowledge managers
• Communities of practice (COPs) (online?)
• Informal social networks of professionals and employees
within and outside firm who have similar work-related
activities and interests
• Activities include education, online newsletters, sharing
experiences and techniques
Functions:
• Facilitate reuse of knowledge, discussion
• Reduce learning curves of new employees
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Benefits of using KMS
◦ Reduce loss of intellectual capital due to people leaving the
company.
◦ Reduce costs by decreasing the number of knowledge re-
creation and by achieving economies of scale.
◦ Increase productivity by making knowledge available more
quickly and easily.
◦ Increase employee satisfaction by enabling greater
personal development and empowerment.
◦ Gain a competitive advantage in the marketplace.
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How to evaluate KMS Success?
◦ Financial metrics – a quick justification
ROI, e.g., = (reduced cost + new revenues)/KM
Investment
a reduction in volume of calls to call centers
the new paperless processes
◦ Non-financial metrics
growth in the volume of knowledge content
growth in KMS usage
Increase employee satisfaction
Shorten project implementation cycle
……
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Reasons of KMS failure?
◦ Inadequate or incomplete information
No valuable information there --rethink of reward
◦ Too much information not easily searchable
poor indexing or management; knowledge out-of-date
◦ Lack of commitment
lack of management involvement
lack of adequate staff and resources
◦ Over-emphasis on technology
Having a KMS in place does not guarantee that people contribute and share
knowledge nor use the system to search for knowledge. (Not the only remedy..)
◦ Without adequate user education and training
Employees don’t know what and how to share.
◦ Without necessary cultural change!!
The most important obstacles, in some cultures, KS never actually happened!
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Key Points Today
Knowledge management value chain model
Benefits and failure reasons of KMS projects
Home reading case:
Knowledge Management and Collaboration at Tata Consulting Services.
Thank you! Have a good exam!
MM2422@Laurel 20
