Chapter 9 Knowledge Management 1

Chapter 9 Knowledge Management 1

Learning Objectives Define knowledge and describe the different types of knowledge. Describe the characteristics of knowledge management. Describe the knowledge management cycle. Describe the technologies that can be utilized in a knowledge management system. Describe the activities of the chief knowledge officer and others involved in knowledge management. 2

Learning Objectives (cont.) Describe the role of KM in organizational activities. Describe ways of evaluating intellectual capital in an organization. Describe how knowledge management systems are implemented. Describe the roles of technology, people, and management in knowledge management. Describe how knowledge management can revolutionize the way an organization functions. 3

Case: Mitre & Knowledge Management Problem: Mitre Co., a global research and development center faced difficulties with accessing knowledge within the company. Solution: In 1993, Mitre technologists developed the groundwork for the Mitre Information Infrastructure through a wide-area information system. Results: Enhanced collaboration within the organization and among clients. On the 7.19 million invested into the system, there has been 62.1 million returned in reduced operating costs and improved productivity. 4

Knowledge Management Knowledge management (KM) is a process that helps organizations identify, select, organize, disseminate, and transfer important information and expertise that are part of the organization’s memory. Knowledge is information that is contextual, relevant, and actionable. Tacit knowledge is usually in the domain of subjective, cognitive, and experiential learning. Explicit knowledge deals with more objective, rational, and technical knowledge. 5

Characteristics of Knowledge Extraordinary leverage & increasing returns Fragmentation, leakage & the need to refresh Uncertain value Uncertain value sharing 6

Data, Information & Knowledge 7

Knowledge-based Economy Rapid changes in the business environment cannot be handled in traditional ways. Firms are much larger, with higher turnover and require better tools for collaboration, communication, and knowledge sharing. Firms must develop strategies to sustain competitive advantage by leveraging their intellectual assets for optimum performance. Managing knowledge is now critical for firms spread out over wide geographical areas, and for virtual organizations. 8

Learning Organization The term learning organization refers to an organization’s capability of learning from its past experience. To build a learning organization, it must tackle three critical issues: (1) Meaning (determining a vision of the learning organization); (2) Management (determining how the firm is to work); and (3) Measurement ( assessing the rate and level of learning). 9

Sharing Knowledge Some reasons people are reluctant to share knowledge include; No skill in knowledge management techniques. Willing to share, but not enough time to do so. Don’t understand knowledge management and benefits. Lack of appropriate technology. No commitment from senior managers. No funding for knowledge management. Culture does not encourage knowledge sharing. 10

Organization Culture The ability of an organization to learn, develop memory, and share knowledge is dependent on its culture. Culture is a pattern of shared basic assumptions. Over time organizations learn what works and what doesn’t work. As the lessons become second nature, they become part of the organizational culture. Generally when a technology project fails, it is because the technology does not match the organization’s culture. 11

Objectives of Knowledge Management Davenport et al. (1998) describe four broad objectives of knowledge management systems in practice: Create knowledge repositories. Improve knowledge access. Enhance the knowledge environment. Manage knowledge as an asset. 12

The Knowledge Management Cycle 1. 2. 3. 4. 5. 6. Create knowledge Capture knowledge Refine knowledge Store knowledge Manage knowledge Disseminate knowledge 13

The Knowledge Management Cycle (cont.) 14

Organizational Knowledge Repositories Knowledge network model. The individual who has the knowledge transfers expertise through person-to-person contacts. Knowledge repository model. Knowledge contribution and use follows a two-step transfer procedure of person-to-repository and repository-to-person. Captured knowledge is stored in a knowledge repository, a collection of both internal and external knowledge. Hybrid Model. Many organizations use a hybrid of the network and repository models. 15

Knowledge Repositories Databases. It is possible to structure part of a knowledge repository as a database. Data warehouses, large repositories of important data, can also be used for knowledge management, especially in conjunction with customer relationship management (CRM) systems. 16

Knowledge Repositories (cont.) Specially Structured Databases. Some systems have been developed in Lotus Notes/Domino Server and hence utilize the Notes database structure. These specialized databases are ideal for storing tacit knowledge because of its nature. Electronic Documents. Others have been developed around electronic document management systems. e.g., DocuShare by Xerox 17

Strategies for Knowledge Management The codification strategy typically is adopted by companies that sell relatively standardized products that fill common needs. Knowledge is carefully codified and stored in knowledge repositories structured as databases. The personalization strategy typically is adopted by companies that provide highly customized solutions to unique problems. Knowledge is shared mostly through person-to-person contacts. 18

Knowledge Systems Development 1. Identify the problem 2 . Prepare for change 3. Create the team 4. Map the knowledge 5. Create a feedback mechanism 6. Define the building blocks for the system 7. Integrate existing information systems 19

Challenges of KM Implementation Lack of understanding of KM and its benefits Lack of time by employees for knowledge management Lack of skill in knowledge management techniques Organizational culture does not encourage knowledge sharing Lack of incentives to share Lack of funding of knowledge management initiatives Lack of appropriate technology Lack of commitment from senior management 20

Case: Xerox as a Knowledge Enterprise Xerox Co. recognized that the bulk of the knowledge in an organization is contained in its documents and in how people use these documents. Xerox decided to transform itself from a copy-machine developer and manufacturer to a developer of knowledge management. They started by developing internal knowledge-sharing systems such as Eureka, a service-technician system In early 2000, a community-of-practice Web site was used by 30,000 Xerox employees. They developed DocuShare for in-house use. 21

Knowledge Management Facilities As storage models become increasingly important, there is a need to have dedicated staff to manage the knowledge repository. The leaders in knowledge storage are major consulting firms such as Accenture, Ernst & Young, KPMG, and so on. Most of these firms have one or more Knowledge Center that is open 24 hours per day, every day. These facilities are accessible via the Internet, as is the KMS. These centers function as a reference library, with a manager and reference knowledge specialists. 22

KM & Information Technologies The KMS challenge is to identify and integrate the following three technologies to meet the KM needs of an organization. Communication technologies allow users to access needed knowledge, and to communicate with each other--especially with experts. Collaboration technologies provide the means to perform group work. Storage technologies use a database management system to capture, store and manage knowledge. 23

KM Technologies Knowware are technology tools that support KM. Collaboration tools, or groupware, were the first used to enhance collaboration for tacit knowledge transfer within an organization. KM suites are complete KM solutions out-of-the-box. Knowledge Servers contain the main KM software, including the knowledge repository. 24

KM Technologies (cont.) Electronic document management systems focus on the document in electronic form as the collaborative focus of work. KM Tools capture knowledge unobtrusively (with minimal effort and impact). E.g. Tacit Knowledge Systems' KnowledgeMail Enterprise knowledge portals are the doorway into many KM systems. XML provides standardized representations of data structures so data can be processed without case-by-case programming. Application Software Providers have evolved as a form of KMS outsourcing on the Web. 25

KM & Artificial Intelligence AI is used in knowledge management systems to do the following: Assist in and enhance searching knowledge (e.g., in Web searches). Establish profiles to determine what kinds of knowledge to scan for individuals and groups. Help determine the relative importance of knowledge. Scan e-mail, documents, and databases to perform knowledge discovery to determine meaningful relationships or to glean knowledge. Scan e-mail, documents, and databases to perform knowledge discovery to induce rules for expert systems. Identify patterns in data (usually neural networks). 26

Knowledge Discovery in Databases Knowledge discovery in databases (KDD) involves tasks known as knowledge extraction, data archaeology, data exploration, data pattern processing, data dredging, and information harvesting. This is accomplished with the tool of Data mining. Model marts and model warehouses are analogous to data marts and data warehouses for models. They act as repositories of knowledge by using KDD techniques on past decision instances (stored in data marts and data warehouses). 27

Knowledge Management Benefits Reduction in loss of intellectual capital when people leave the company Reduction in costs by decreasing the number of times the company must repeatedly solve the same problem Economies of scale in obtaining information from external providers Reduction in redundancy of knowledge-based activities Increase in productivity by making knowledge available more quickly & easily Increase in employee satisfaction by enabling greater personal development and empowerment Strategic competitive advantage in the marketplace 28

KM Value Matrices (Allee, 1999) External relationship capital: how an organization links with its partners, suppliers, customers, regulators, and so on. Structural capital: systems and work processes that leverage competitiveness, such as information systems, and so on. Human capital: individual capabilities, knowledge, skills, etc. Social capital: the quality of relationships with the larger society. Environmental capital: the value of relationships with the environment. 29

Case: KM Failure at Ford In 2000 A failure to share knowledge between Ford and Firestone resulted in a Ford Explorer tire disaster. Although Ford shares knowledge extremely well, no one knew about the tremendous problem for two main reasons; 1. Knowledge is best shared within communities. 2. The more widely dispersed knowledge is, the more powerful a force is needed to extract and share it. A major lesson from this KM failure: Organizations should extract as much important knowledge as they can because they never know what might prove truly important, or when. 30

Knowledge Management Issues Buying & Selling Knowledge Encouraging System Use Most firms are reluctant to sell knowledge, unless they are expressly in the business of doing so. Employees must be motivated properly to contribute knowledge. A firm’s knowledge is an asset that has competitive value. The mechanism for doing so should be part of their job, and their salaries should reflect this. 31

People in the KM System The Chief Knowledge Officer CEO, Officers & Managers of the Organization Communities of Practice KMS Developers KMS Staff 32

Chief Knowledge Officer A CFO must do the following (adapted from Duffy, 1998): Set knowledge management strategic priorities. Establish a knowledge repository of best practices. Gain a commitment from senior executives to support a learning environment. Teach information seekers how to ask better & smarter questions. Establish a process for managing intellectual assets. Obtain customer satisfaction information in near real time. Globalize knowledge management. 33

Integration Since a KM system is an enterprise system, it must be integrated with other enterprise and information systems in an organization. The most important systems to integrate with are; Decision Support Systems Artificial Intelligence Databases and Information Systems Customer Relationship Management Systems Supply Chain Management Systems Corporate Intranets and Extranets 34

Managerial Issues Organizational culture change. How can we change organizational culture so that people are willing to both contribute knowledge to and use knowledge from a KMS? How to store tacit knowledge. How to measure the tangible and intangible benefits of KMS. 35

Managerial Issues (cont.) The importance of knowledge management. KM is not another management fad. How can our organization develop a successful knowledge management system? Implementation in the face of quickly changing technology. Determining the roles of the various personnel in a KM effort. 36