Knowledge Management

CNB Rajesh Assistant Professor PES School of Engineering

What is Knowledge?

Knowledge is
Organized information to problem solving Woolf (1990) Information organized and analyzed to make it understandable and applicable to problem solving or decision making (Turban 1992 )

What is Knowledge?

Knowledge is
Consisting of truths and beliefs, perspectives and concepts, judgments and expectations, methodologies and know-how Wilg, 1993 The whole set of insights, experiences and procedures that are considered correct and true, and that therefore, guide the thoughts, behaviors and communications of people van der Spek, R and Spilkervet, A, 1997

What is Knowledge?

Knowledge is
Reasoning about information and data to actively enable performance, problem-solving, decision-making, learning, and teaching Beckman, t 1997 Highly contextualized information enriched with individual interpretation and expertise Natarajan & Shekhar 2000

Why is Knowledge necessary?

Global trade and business have resulted in

Competitive Pressures Complex business processes Cultural diversity Accelerating pace of doing business Customer driven market place

Why is Knowledge necessary?

To cope with the pressure, firms have to

Innovate constantly and differently. Change continuously Restructure, Transform and re-invent. Excel in managing Cost, Quality, Delivery and Performance. Unlearn past strategies. Develop foresight about future options.

KNOWLEDGE
IS THE ONLY ASSET THAT CAN HELP COPE WITH ALL THE AFOREMENTIONED ISSUES

KNOW

EDGE

Be aware of Be familiar with Be acquainted with

L E A R N

An Intense or Striking Quality A slight advantage over somebody or something

To be informed To gain knowledge, skill or ability in To be skillful

THE TERM KNOWLEDGE IN ITSELF IS A PROCESS OF LEARNING TO KNOW TO HAVE AN EDGE OVER OTHERS

The Nature of Knowledge

Explicit
Contributes to efficiency Easier to document and share Easier to replicate 20%

Leads to competency Harder to articulate Higher competitive advantage

Tacit
80%

Harder to steal Harder to transfer

Data, Information, Knowledge Relationship

Road map for expertise and capacity

Facts, Images, Sounds INTERPRETAION, MEANING/RELEVA NCE, PURPOSE

DATA

Formatted, Filtered, summarized data ACTION, APPLICATION

INFORMATIO N

KNOWLEDGE
Instincts, Ideas, rules and procedures that guide INTUITION, EXPERIENCE

Knowledge Repository, Integrated Performance Support Systems, Core Competence

CAPABILITY

Fast & Accurate Advice, Explanation & Justification of Results, Reasoning

INTEGRATION, NAVIGATION, DISTRIBUTION

EXPERTISE

Managing Knowledge
The most critical part of doing business today!

What is Knowledge Management?

Knowledge Management is
The process through which firms create and use their institutional or collective knowledge Rangnekar, 2002 The process of capturing a companys collective expertise wherever it residesin databases, on paper, or in peoples heads-and distributing it to wherever it can help produce the biggest payoff Hibbard, 1997

What is Knowledge Management?

Knowledge Management is
The systematic, explicit and deliberate building, renewal and application of knowledge to maximize an enterprises knowledge related effectiveness and returns from its knowledge assets Wiig, 1997.

What is Knowledge Management?

Knowledge Management is
A process involving the identification and analysis of available and required knowledge, and the subsequent planning and control of actions to develop knowledge assets so as to fulfil organizational objectives Macintosh, 1996.

A I M S
KNOWLEDGE MANAGEMENT

Reducing cost and time for information collection, dissemination and reuse
Improving customer/vendor service and support processes Identifying innovative business / revenue generation opportunities Shrinking cycle times for product / market development ENHANCED ENTERPRISE PROFITABILITY ENHANCED ORGANIZATIONAL LEARNING

A I M S

Stemming intellectual losses linked to employee turnover

Evolution of Knowledge Management

Peter Drucker and Paul Straussman have been stressing the importance of Information and Explicit Knowledge as an organizational resource, during 1970s. Peter Senge has focused on Learning Organization which is the cultural dimension of managing knowledge during the same period.

Evolution of Knowledge Management

Everett Rogers work at Stanford during the late 1970s on diffusion of innovations and Thomas Allens research at MIT, in information technology and technology transfer shed light on how knowledge is produced, used and diffused in organizations.

Evolution of Knowledge Management

By mid 1980s knowledge and its importance as an organizational resource came to be very highly pronounced because of global trade and business activities. Along with this concern over using existing knowledge and ever growing complexity of business processes became pronounced.

Evolution of Knowledge Management

Works of Information Technology specialists during mid 1980s using hypertext and hypermedia and intranets created the basic platform for creating, using and diffusing knowledge in organizations in a much quicker and productive fashion. Noteworthy is Knowledge Management System by Rob Acksyn and Don McCracken.

Evolution of Knowledge Management

Use of Artificial Intelligence and development of Expert Systems gave raise to concepts such as Knowledge Acquisition and Engineering and Knowledge Based Systems. In 1989, a consortium of US companies took initiative in Managing Knowledge Assets.

Evolution of Knowledge Management

By 1990 many consulting firms and manufacturing firms across the globe had started in-house knowledge management programs. By mid 1990s these programs were flourishing. The International Knowledge Management Network began in Europe in 1989 and went online in 1994 and was joined by Knowledge Management Forum of US.

Evolution of Knowledge Management

Today, KM stands as an alternative for failed TQM and business process re-engineering alternatives.

What Is Driving KM Now?

Need for even faster innovation Content Management Knowledge Attrition Mergers and Acquisitions Portals and e-business e-Learning

Common Approaches to KM
Corporate Memories Knowledge Mapping Yellow Pages

Best Practice Communities of Practice Lessons Learned Virtual Teams

Knowledge Elicitation Mentoring

Learning Organisation

Entry, Exit & Expert Interviews (3Es)

KM Approaches
Explicit
- Groups that share, learn - Held together by common interest in topic - Trade tools, templates, b.p.s - Solve business problems

Transfer of Best Practices

- Facilitated sharing/transfer - Internal benchmarking

Networks & CoPs Self-Service +

- Intranets
- Portals to key info - Search - Yellow Pages - Expert directories

Tacit Higher

Technology Enabled

Lower

Some Corporate Examples

Organization
Chevron
Target Value Proposition

Approach

Technology

Results

Reduce Communities of Microsoft $2 billion Operating Costs Practice (COPs), Platform, reduction in facilitate Plumtree Portal annual operating Growth transfer of Best costs Practices (BP) Microsoft Platform and Exchange 10-fold growth in revenue with 5fold increase in employees.

Faster Revenue COPs, central Cap Gemini Growth, Lower KM managers, Ernst & Young Cost Content Management

Schlumberger

Knowledge in the hands of employees and customers

Technical COPs, intranet & vortal

Web Enabled

$30-75 M 1st year savings on a $28 M investment

Best Buys KM Journey

Stage 1 November 1999

Identified executive champions Created core group the KM PMO

Stage 2 Develop Strategy January 2000

Formed Steering and Advisory Committees Defined CoP pilot selection criteria Launched 3 pilot communities

Best Buys KM Journey

Stage 3 Pilots August 2000

Observed, measured and enhanced content, tools, and functionality for three pilot communities Standardized processes and community technology Initiated 8 new communities

Best Buys KM Journey

Stage 4 Expansion April 2001 to present

6 nation-wide store-based sales communities Integration with existing retail systems & processes Product content Move toward a complete employee toolkit

Best Buys KM Benefits

For Retail:

From pilot launch (July) to end of the 2000, the growth rate in ISP units/day/store sold in pilot district stores outpaced the company average. In December 2000, pilot districts outperformed the company average by 4.2 and 1.0 ISP units/store/day respectively. Each ISP contract sold = $55 gross margin.

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Best Buys KM Benefits

For Mobile Installation:

Claims per unit down from $.35 to $.34 in 2000 3% drop in damage claims in 2000
Service centers have lowered their total cost to complete by over $11 in three months.*

For PC Techs:

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Aligning Business Strategy, Knowledge Strategy and KM Activities

Business Business Strategy Strategy

Knowledge Strategy

What knowledge a firm must have & manage?

What knowledge a firm has & manages?

What knowledge competitors have & manage?

Internal Strategic Knowledge Gap/Excess

Adapted from a model developed by Michael Zack

External Strategic Knowledge Gap/Excess

Rationalize current KM activities

KM Activities
Chose new KM activities

Thank You!!!