Investing in KM/KT: Supporting Business Strategy
KM/KT is important to all companies, particularly in sectors that generate, collect and use a lot of information and data to inform business strategies and to gain a competitive advantage. KM products and services are split between fulfilling organizational needs and identifying those needs and opportunities.
- Fulfilling needs: Addressing an organization’s KM needs entails surveying the organization to identify key ‘pain points’ or areas of continued aggravation (such as lost documents, writing communiqués from scratch on the same subject numerous times, loss of corporate memory due to high retirement rates, documenting the process and lessons learned after major organizational projects are completed). It is important in any KM exercise to identify the real problem areas and to find solutions to these problems. Tangible success in one KM project increases the organization’s understanding of the value of KM, despite the time and effort required ‘to get it right’.
- Identifying needs and opportunities: Organizations need to be able to use and analyze data and information from a number of sources to elicit emerging issues that need to be resolved; emerging opportunities that can benefit the organization and/or its stakeholders; elicit areas requiring new or amended policy or program development; contribute to reducing or eliminating risk to the organization (operational, technology, health and safety).
Interestingly, as organizations consume material assets, they often depreciate in value, On the other hand, when organizations use knowledge resources, these assets tend to increase value given that both the giver and receiver are enriched as a result of the transaction. For example, more than one individual can use knowledge at the same time, and shared knowledge stimulates the creation of new knowledge.
More importantly, KT can represent a low-cost alternative to the creation, codification, and capture of new knowledge and significantly contribute to overall organizational success by preventing individuals from repeating the mistakes of other individuals.21 One practitioner put it this way: “We used to say knowledge is power. Now we say sharing is power”.22 Thus, it can be argued that KT could represent not only a competitive advantage within an organization but also a less expensive alternative to knowledge creation and acquisition. This may not always be the case; however, an assessment is required at the initial strategy stage if it is easier to re-create than to transfer.
Effective KM/KT includes the following benefits:
- Structured and systematic access to documents and knowledge across the organization and between professionals in the same and related fields.
- Access to the person who has the required information or can help find the answer.
- Reduced search time for information and data.
- Effective use of relevant information to support strategy and decision making.
- Integration of paper and electronic information and other media.
- Freeing up time to focus on the benefits of information instead of the problems with information management.
- Retention of corporate memory and intellectual assets, which is extremely important for organizations and sectors undergoing significant workforce adjustment.
- KM solutions that facilitate collaboration, information sharing and organizational learning through products and services such as standardized taxonomy / classification systems, searchable repositories and databases.
- KT solutions including accelerated learning options, which is very important to sectors experiencing high retirement rates and replacing with new, less experienced people.
- Increased understanding of the customers’ needs and preferences in order to provide better products and services allowing for improved business enablement.
- Product/service excellence by bringing new ideas into the design process and capitalizing on lessons learned.
- Operational excellence through the use of best practices to improve the internal performance of the enterprise; contributes to continuous learning and avoidance of repeated mistakes:
- Increased productivity, speed, agility, profits, growth, and process improvement.
- Improved performance, effectiveness and capabilities (cost savings).
- Risk reduction.
- Improved personal connectivity (allowing employees to acquire and employ new and improved competencies and networks):
- KT across projects moves knowledge from project sources of knowledge to project recipients with the goal of improving performance and capabilities.
- Increased ROI on management’s investment in technology and knowledge resources.
Knowledge ultimately assumes value when it affects decision making and is translated into action.23 Firms unable to manage knowledge assets will become increasingly uncompetitive in the future business environment. For those who can harness their knowledge assets, the culture must adapt to the new environment and put in place new processes in order to achieve the expected return on investment.24
21 - Baum, J. A. C. & Ingram, P. (1998). Survival-enhancing learning in the Manhattan hotel industry, 1898-1980," Management Science, 44(7): 996-1016.; Gruenfeld, D., Martorana, P., & Fan, E. (2000). W Decision Processes, 82(1), 45-59
22 - Pederson, C. R. (1998). Management of knowledge new IT 'craze.' Computing Canada, 24(27), 19-21.
23 - De Long, D.W. "Diagnosing cultural barriers to knowledge management," The Academy of Management Excellence, 14 (4), 2000,pp. 113-127
24 - Nash, I. (2002) "Management not measurement is key" Australian CPA ( 72:4) May, 2002, pp. 14-27