This report discusses about Knowledge Management being considered as a variety of information technologies known as ‘knowledge management systems”. The report shows the knowledge management process describing the different phases of the process. I used a modified version of Nonaka’s model to explain knowledge transformation.
I then move onto discuss some of the challenges involved in creating KM systems. Then I introduce two KM strategies – codification & personalization and which one should a firm choose. Some of the incentives that a firm can offer its employees for actively participating in the knowledge creation phase are discussed next. I conclude by discussing how much IT and support would a firm need depending on which strategy they implemented.
The former CEO of IBM, Thomas Watson, once stated “All the value of this company is in its people. If you burned down all our plants, and we just kept our people and our information files, we should soon be as strong as ever.”
Knowledge can be thought of as a blend of actionable information built over time based on accumulated experiences and understanding of a phenomenon. Take for example the case of creating business reports for a client. When a new joiner in the firm first creates a business report for a client, he may not possess the knowledge to create the best report. But as time passes and he/she gains experience, he/she understands the process of creating the reports and builds his/her knowledge.
Knowledge can be categorized with respect to its type as:
The knowledge available in an organization that is not yet recorded is referred to as Implicit Knowledge. For example, an employee of an organization might have the knowledge to create business reports but till the time his knowledge is not recorded by the organization, the knowledge remains implicit.
Once the implicit knowledge is recorded in any form, it transforms into explicit knowledge. For instance, in the above example, when the employee documents his knowledge about creation of business reports, his knowledge is no longer implicit but explicit.
Tacit Knowledge
There also exists a type of knowledge that we have, and know we have, but cannot capture by language or mathematics. We can only see it by its action.
What is Knowledge Management?
Knowledge Management is a set of activities and processes that an organization enacts to manage the wealth of knowledge it possesses and ensure that it is properly safeguarded and put to use to help the firm achieve its objectives.
What is a Knowledge Management System?
A system of any form (computer based, paper based, etc) involved in managing knowledge effectively can be considered as a knowledge management system. For example, Eureka, Xerox’s knowledge management system, is used by their customer service engineers to share repair tips. The technicians entered their insights into the database and created documents that include the author’s name, the context of the problem and the solution that was developed. These tips were validated by subject matter experts. Once validated, the tips were made available to all the technicians via internet.
In today’s digital world, information technology has played a prominent role in creating knowledge management systems, as shown in Eureka’s example. However, no one software application can enable an organization to successfully implement a knowledge management initiative. So, a number of technologies are used together to help create a successful knowledge management initiative.
The three phases of knowledge management process are (Refer Appendix 1):
Knowledge creation is the first phase of the knowledge management process. Here the organization’s employees generate new information, devise novel solutions to handle existing problems, or identify new explanations for recurrent events. This knowledge is very valuable for the organization because other employees in the organization might be facing the same problems. Such solutions can be used by them and can potentially save the organization a lot of time and money. But what it also does is improve customer satisfaction. For example, if a Xerox technician goes to a customer’s office to fix a problem and finds the solution to the problem on Eureka, he not only saves time and money for the organization but also keeps the customers happy.
Nonaka’s model of knowledge creation is an important matrix describing how knowledge transforms in an organization. I modified the model a little to include the implicit knowledge into the mix.
Figure 1 – Modified Nonaka’s Model
Shown in red in the modified Nonaka’s model is the transformation of knowledge from Tacit to Implicit, Explicit to Implicit and Implicit to Implicit. These three transformations are undesirable in the knowledge creation phase.
Examples of transformations:
Tacit to Tacit – Knowledge Transfer sessions between colleagues
Tacit to Explicit – Write down learning from a KT session
Explicit to Tacit – Learn from an explicit source, like a ‘Meta-data’ or a schema
Explicit to Explicit – Create/modify a document using another already existing
document
Implicit to Explicit – Creating a KT document using your own knowledge
Capturing and storing knowledge
The process of capturing and storing knowledge enables the organization to codify new knowledge and maintain an organizational memory. This step helps fulfil the main objectives of a knowledge management system – compile and use knowledge.
Capturing and storing knowledge can be a very difficult task. This is where the culture of the organization plays a very important role. The firm’s culture should be such that their employees are willing to engage in knowledge management activities like, documenting, sharing their knowledge. We will discuss the culture perspective in detail under ‘Challenges in building Knowledge Management Systems’.
Knowledge repositories and Content Management Systems (CMSs) are the main technologies used in this phase. A knowledge repository is a central location and search point for relevant knowledge. As time passes and as more and more employees of an organization start contributing, the volume of knowledge in these repositories is bound to increase. Also, in such a scenario, finding relevant knowledge becomes difficult and time consuming. This is where a CMS comes in handy. A CMS is a software program designed to organize and facilitate access to digital content of repositories.
Knowledge dissemination is the last stage of this process. This is the stage where knowledge contributed by the organization’s employees is both readily available and usable by other employees facing the same or a new problem. The dissemination of knowledge should ideally result in improving efficiency of the employees and indeed the organization.
Challenges in building KM Systems
Some of the challenges in the implementation of Knowledge Management Systems are:
- Getting the people to share knowledge – Culture of the organization plays a very important role in getting the people to share knowledge. If the culture of the organization is not suitable for sharing, people will not create new knowledge. In this case the failure of the knowledge management system is inevitable. For example, it is particularly difficult to get the employees of a consulting firm to share and document knowledge. The employees feel that if they share their knowledge, the organization will be able to replace them. Also, in the busy world of consulting where “billable hours” are very important, finding time to create knowledge and share it is particularly difficult. The organization needs to gradually change its culture and provide the employees with some incentives to motivate them to contribute.
For example, my previous organization – ACS, A Xerox Company, offered their employees gift vouchers redeemable at retail stores for contributing. Another way is to create an environment where the employees are confident that they will not be replaced by a computer system.
- Evaluation of knowledge – It is particularly difficult to evaluate the worth of knowledge in an organization. Without proper evaluation of knowledge, it is difficult to determine the scope of the KM projects to be undertaken. The organization can ask a consultancy firm to conduct a knowledge audit
- Documenting decision making – An organization can use the latest technology to develop a knowledge management system, throw in a huge amount of money in the process but it still would not be able to document the process of decision making of an employee. This is because everybody uses their own tacit knowledge to make decisions and no two people have the exact same knowledge.
- Knowledge implementation – Knowledge organization and integration with processing strategy is a major technical challenge. This is where knowledge repositories and Content Management Systems come in.
Knowledge Management Strategies
According to Morten T. Hansen, Nitin Nohria and Thomas Tierney (Refer Appendix 2), knowledge is the core asset of management consulting firms, so they were amongst the first businesses to pay attention to – and make heavy investments in – the management of knowledge. These consultants aggressively explored the use of information technologies to capture and disseminate knowledge. They describe two very different knowledge management strategies:
The knowledge management strategy in some companies centres on technology. They store the knowledge in the form of databases, indexed properly to give the most meaningful results to searches. The knowledge can then be easily accessed and used by anyone in the company.
Personalization strategy focuses on sharing knowledge on a person-to-person basis. The primary reason for this is that the company is dealing with tacit knowledge which is hard to put in words. Computers and technology in this case is used to communicate knowledge rather than store it effectively.
Determining which strategy to use
According to T. Hansen, Nitin Nohria and Thomas Tierney (Refer Appendix 2), a company’s KM strategy depends on the way the company serves its clients, the economics of its business and the people it hires.
The way the company serves its clients
Some firms have to deal with similar problems over and over. They offer customer benefits in the form of reliability, high-quality, cheaper than competition. These firms re-use existing solutions and apply their skills to create a new system for the firm. In this scenario, it would be highly beneficial for the firm to use a codification strategy.
Other firms may offer highly customized services to their clients because the client’s problems may be one of a kind or the firm deals with new problems everyday. This kind of a firm would be highly advised to use a personalization strategy.
The economics of its business
Codification allows the company to reuse their knowledge. This in turn means that the service provided by the company will be faster, of high-quality and thoroughly tested. What it also means is that the firm will be able to reduce the unit price of their product because the cost will be split into the number of clients. This is exactly why an off-the-shelf product is cheaper than a customized product. Product based companies have codified their knowledge and are relying on economies of sale while customized product companies have to create everything from scratch for their client and therefore charge more.
The people it hires
Both these strategies call for some specific traits in the people using the knowledge management systems. A firm using the codification strategy firm mostly hires people who can use knowledge repositories to gain knowledge. They implement, not invent. These firms don’t believe in re-inventing the wheel. On the other hand, personalization strategy firms hire people with superb analytical and creative skills on unique business problems. The new joiners are trained by experienced employees.
Incentives for employees to contribute to KM Systems
Incentives to participate and contribute to knowledge management systems are necessary because they motivate the employees. Most of the employees will not contribute to knowledge creation if there are no incentives – I know I won’t. The benefits of incentivising employee contribution are twofold – One, organization gets creates knowledge and two, it motivates the people to find new solutions to old problems. The incentives that an organization gives its employees should ideally depend on the strategy being used by the organization.
For example a firm using the codification strategy where writing everything down is of essence, is advised to assess an employee on the knowledge he created during the appraisal cycle amongst other parameters. This will prove to the employee that creating knowledge is an important part of the company culture and is here to stay.
In organizations employing the personalization strategy where computers are only used as a means of communicating knowledge, the incentive strategy may be different. Here the employee may be offered small gifts like company merchandise or maybe gift coupons like my previous organization (ACS, A Xerox Company) did.
Critical factors for a successful Knowledge Management System
The key factors for a successful Knowledge Management System are:
Culture of the organization
A knowledge management system cannot be successful if the culture of the organization does not promote knowledge sharing.
Clear objectives
A clear understanding of what knowledge means for the organization is very important. Every industry has its own ‘knowledge’. Its important to design the system keeping in mind the industry of the organization.
More flexibility on ways of Knowledge sharing
If the employees don’t like a method of knowledge sharing for some reason, give them options to use some other method. This method, apart from promoting knowledge transfer, also aids innovation – people will start innovating new ways to share knowledge.
The hand of senior management
Every big project in an organization has to have the backing of some one from senior management otherwise it loses to the other projects which have the ‘political clout’ behind them.
Incentives
The employees need to be motivated to share knowledge, at least when the knowledge management system is new (as discussed under ‘Incentives for employees to contribute to Knowledge Management Systems’).
A proper Content Management System (CMS)
As discussed earlier, a CMS is responsible for the organization of knowledge in knowledge repositories and faster searches. Slow response by the system can de-motivate employees from using the knowledge management system.
Technical infrastructure
The existing technical infrastructure of the company should be compatible with the planned knowledge management system. If not, new infrastructure should be laid down. Laying new infrastructure may be expensive and all organizations may not want to do this. So they must optimize their proposed knowledge management system in such a way so as to utilize their existing infrastructure.
According to T. Hansen, Nitin Nohria and Thomas Tierney (Refer Appendix 2), the amount of IT and support needed by a company depends on which knowledge management strategy the company uses.
So if a company like Accenture Consulting uses the codification strategy, they will most probably need a heavy IT infrastructure and support. Managers in these firms should be ready to spend large amounts of money on IT and IT related projects. These companies not only put invest a lot of money on building the KM system but also maintaining the system.
On the contrary, if a company like Pricewaterhouse Coopers uses the personalization strategy, heavy IT infrastructure and support is less important. For these companies communication between the employees is more important. The IT is most probably used just to bring the two individuals in contact, and that’s it.
Information technology has featured prominently in knowledge management initiatives since the beginning, giving rise to the notion of knowledge management systems. However, no single application can enable a firm to successfully implement a knowledge management system. Rather, a number of technologies are used in tandem to enable the various aspects of knowledge management. In today’s digital world, I can safely say knowledge management systems are here to stay and can provide companies competitive advantage over their competitors.
- Piccoli, Gabriele. "Information System Trends." Information Systems for Managers: Text & Cases. Chichester: John Wiley & Sons, 2007. 375-377. Print.
- Hansen, M. T., “What's Your Strategy for Managing Knowledge?” Harvard Business Review, March-April, 1999.
| Company Name | Page No. |
| Accenture Consulting | 9 |
| ACS, A Xerox Company | 6, 8 |
| IBM Computers | 3 |
| Pricewaterhouse Coopers | 9 |
| Xerox Corporation | 4 |
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