What is knowledge management

Know L Edge

Be aware of Be familiar withBe acquainted with

Learn A slight advantage over something.

To be informed to gain knowledge to be skillful.

Knowledge Management.

Introduction:

Knowledge Management is one of the hottest topics today in both the industry world

and information research world. In our daily life, we deal with huge amount of data and

information. Data and information is not knowledge until we know how to dig the value

out of of it. This is the reason we need knowledge management. Unfortunately, there's

no universal definition of knowledge management, just as there's no agreement as to

what constitutes knowledge in the first place. We chose the following definition for

knowledge management for its simplicity and broad context.

Simple Definition:

Knowledge Management (KM) refers to a multi-disciplined approach to achieving

organizational objectives by making the best use of knowledge. KM focuses on

processes such as acquiring, creating and sharing knowledge and the cultural and

technical foundations that support them.

Knowledge management:

P G Department of Management Studies and Research Center., PESITM, Shivamogga.


Knowledge Management may be viewed in terms of:

People – how do you increase the ability of an individual in the organization to

influence others with their knowledge?

Processes – Its approach varies from organization to organization. There is no

limit on the number of processes

Technology – It needs to be chosen only after all the requirements of a

knowledge management initiative have been established.

Or

Culture –The biggest enabler of successful knowledge-driven organizations is the

establishment of a knowledge-focused culture

Structure – the business processes and organizational structures that facilitate

knowledge sharing

Technology – a crucial enabler rather than the solution.

What Is Knowledge Management Related To?

Knowledge management draws from a wide range of disciplines and technologies:

Cognitive science

Expert systems, artificial intelligence and knowledge base management

systems (KBMS)

Computer-supported collaborative work (groupware)

Library and information science

Technical writing

Document management

Decision support systems

Semantic networks

Relational and object databases

Simulation

Organizational science

object-oriented information modeling



electronic publishing technology, hypertext, and the World Wide Web;

help-desk technology

full-text search and retrieval

performance support systems

Although around 20 kinds of disciplines and study areas were listed above, there is no

way to include all of the related subjects to knowledge management.

The History of Knowledge Management

1. 70's,

A number of management theorists have contributed to the evolution of

knowledge management

Peter Drucker: information and knowledge as organizational resources

Peter Senge: "learning organization"

Leonard-Barton: well-known case study of "Chaparral Steel ", a company

having knowledge management strategy

2. 80's,

Knowledge (and its expression in professional competence) as a

competitive asset was apparent

Managing knowledge that relied on work done in artificial intelligence and

expert systems

Knowledge management-related articles began appearing in journals and

books

3. 90's until now,

A number of management consulting firms had begun in-house knowledge

management programs

Knowledge management was introduced in the popular press, the most

widely read work to date is Ikujiro Nonaka’s and Hirotaka Takeuchi’s The



Knowledge-Creating Company: How Japanese Companies Create the

Dynamics of Innovation (1995)

The International Knowledge Management Network(IKMN) went online in

1994

Knowledge management has become big business for such major

international consulting firms as Ernst & Young, Arthur Andersen, and

Booz-Allen & Hamilton

The Value of Knowledge Management

Some benefits of KM correlate directly to bottom-line savings, while others are more

difficult to quantify. In today's information-driven economy, companies uncover the most

opportunities — and ultimately derive the most value — from intellectual rather than

physical assets. To get the most value from a company's intellectual assets, KM

practitioners maintain that knowledge must be shared and serve as the foundation for

collaboration. Yet better collaboration is not an end in itself; without an overarching

business context, KM is meaningless at best and harmful at worst. Consequently, an

effective KM program should help a company do one or more of the following:

Foster innovation by encouraging the free flow of ideas

Improve decision making

Improve customer service by streamlining response time

Boost revenues by getting products and services to market faster

Enhance employee retention rates by recognizing the value of employees'

knowledge and rewarding them for it

Streamline operations and reduce costs by eliminating redundant or

unnecessary processes

These are the most prevalent examples. A creative approach to KM can result in

improved efficiency, higher productivity and increased revenues in practically any

business function.



Knowledge Management Today

According to a recent IDC report, knowledge management is in a state of high growth,

especially among the business and legal services industries. As the performance

metrics of early adopters are documenting the substantial benefits of knowledge

management, more organizations are recognizing the value of leveraging organizational

knowledge. As a result, knowledge management consulting services and technologies

are in high demand, and knowledge management software is rapidly evolving.

Knowledge Management Drivers

The main drivers behind knowledge management efforts are:

Knowledge Attrition: Despite the economic slowdown, voluntary employee

turnover remains high. A recent survey by the global consulting firm Drake Beam

Morin revealed an average voluntary employee turnover rate of 20 percent with

81 percent of organizations citing employee turnover as a critical issue. An

estimated annual cost of employee turnover was a staggering $129 million per

organization. Much of this cost is due to knowledge attrition, which can be

effectively minimized using knowledge management techniques.

Knowledge Merging: Since 1980, the annual value of mergers has rised 100 fold

reaching a cumulative $15 trillion in 1999. Over 32,000 deals were announced;

triple the number of 10 years earlier and more than 30 times as many as in 1981.

The recent frenzy of corporate mergers coupled with the increased need to

integrate global corporate communications requires the merging of disparate and

often conflicting knowledge models.

Content Management: The explosion of digitally stored business-critical data is

widely documented. Forester Research estimates that online storage for Global

2,500 companies will grow from an average of 15,000 gigabytes per company in

1999 to 153,000 gigabytes by 2003, representing a compound annual growth

rate of 78%. As the volume of digital information expands, the need for its logical

organization is critical for purposes of information retrieval, sharing and reuse.



E-Learning: As the economy becomes more global and the use of PCs more

pervasive, there has been a dramatic increase in e-learning, also known as

computer based training. E-learning is closely linked to an overlapping with, but

not equal to knowledge management. E-learning can be an effective medium for

knowledge management deliverables.

KM Objectives

The graph below shows the results of a recent IDC study in which corporations cited

various objectives for knowledge management efforts:

Activities related to these objectives include: creating knowledge sharing networks

that facilitate a corporate knowledge culture, developing knowledge leaders,

optimizing intellectual capital by producing knowledge management solutions such

as codification strategies and knowledge bases, and estimating revenue and



efficiency gains resulting from knowledge management in terms of return on

investment.

Components of knowledge management:

Technologies That Support Knowledge Management

The following diagram reflects the main technologies that currently support

knowledge management systems.

These technologies roughly correlate to four main stages of the KM life cycle:


Knowledge management

TechnologComponent

organisation

component


1. Knowledge is acquired or captured using intranets, extranets, groupware, web

conferencing, and document management systems.

2. An organizational memory is formed by refining, organizing, and storing

knowledge using structured repositories such as data warehouses.

3. Knowledge is distributed through education, training programs, automated

knowledge based systems, expert networks.

4. Knowledge is applied or leveraged for further learning and innovation via mining

of the organizational memory and the application of expert systems such as

decision support systems.

All of these stages are enhanced by effective workflow and project management.

Present and Future State of KM

Currently, communities of practice such as the Knowledge Management Network

and the development of standards and best practices are in a mature stage of

development. KM curricula such as certification, corporate training and university

graduate certificate programs are on the rise. Techniques such as data mining and

text mining that use KM for competitive intelligence and innovation are in the early

stages of development. Finally, organizations are investing heavily in ad hoc KM

software that facilitates organizational knowledge. The chart below estimates the

state of their current and future KM activities.

The Future of Knowledge Management

In the next several years ad-hoc software will develop into comprehensive, knowledge

aware enterprise management systems. KM and E-learning will converge into

knowledge collaboration portals that will efficiently transfer knowledge in an

interdisciplinary and cross functional environment. Information systems will evolve into

artificial intelligence systems that use intelligent agents to customize and filter relevant

information. New methods and tools will be developed for KM driven E-intelligence and

innovation.



The Effect of Knowledge Management on Databases

Multiple corporate databases will merge into large, integrated, multidimensional

knowledge bases that are designed to support competitive intelligence and

organizational memory. These centralized knowledge repositories will optimize

information collection, organization, and retrieval. They will offer knowledge enriching

features that support the seamless interoperability and flow of information and

knowledge. These features may include: the incorporation of video and audio clips, links

to external authoritative sources, content qualifiers in the form of source or reference

metadata, and annotation capabilities to capture tacit knowledge. Content will be in the

form of small reusable learning objects and associated metadata that provides

contextual information to assist KM reasoning and delivery systems.

The Implications of Knowledge Management for...

Database Users: From business class users to the general public, database

users will enjoy a new level of interaction with the KM system including just-in-

time knowledge that delivers precise relevant information on demand and in

context. More complex, smart systems will translate to optimal usability and less

time spent searching for relevant information. For example, data analysts will

enjoy simplified access and more powerful tools for data exploitation. The use of

knowledge bases can reduce customer service costs by providing customers

with easy access to 24/7 self service via smart systems that reduce the need to

contact customer service or technical support staff. Database users may even

create customized views of knowledge bases that support their needs.

Database Developers: The design and development of knowledge based

systems will be considerably more complex than current database development

methods. Developers must consider the overall technical architecture of the

corporation to ensure seamless interoperability. The use of standardized

metadata and methods will also facilitate both intra-corporate and inter-corporate

interoperability. Making effective physical storage and platform choices will be



equally more complex. Both knowledge base developers and administrators

must understand the role of the knowledge base in the overall KM system.

Database Administrators: Database Administrators will evolve into Knowledge

Managers. The knowledge base will store and maintain corporate memory and

Knowledge Managers will become the gatekeepers of corporate knowledge. The

lines between technical roles such as Web Developer, Data Analyst or Systems

Administrator will blur as these systems merge into and overlap with KM

systems. DBAs will need to have some knowledge about each of these

disciplines.

General Public: Even if they are not interacting directly with a knowledge base,

the general public will benefit from the secondary effects of improved customer

service due to faster access to more accurate information by service providers.

Need for knowledge management:

Knowledge management underlines a growing structure of ideas, Techniques and

technologies. Fortune 500 companies loose close to 12 billion dollars annually due

poorly managed KM. With this background the need of KM become ever more

pressing. However, skepticism that surrounds knowledge management is not

surprising given the fact that is seem like just another craze, and one that can be,

extremely expensive to follow. But for multinational companies on the global stage

and the new entrants on the global stage, the demand of speed and distance make

easy available information inevitable, with company remaining local and domestic

both in old age economy traditional industrial sectors, the demand may be less

pressing for now.



Why organizations launch their KM programs?

Source: IDC 1999 Knowledge management survey.

Increase profit of Revenue 67%

Retain key and expertise 54%

Improve customer retention and

satisfaction

52%

Defend market share against new entrant 44%

Accelerate time to market with product 39%

Penetrate new market segments 39%

Reduce costs 38%

Develop new products and services 35%


increase

profit o

f rev

enu 67%

retain

key t

alent a

nd experti

se 54%

impro

ve cu

stomer

reten

tion and/o

r sati

sfacti

on 52%

defend m

arket

share

again

st new

entra

nt 44%

accele

rate ti

me to m

arket

with pro

duct 39%

penetr

are new

mark

et seg

ment 3

9%

reduce

costs

38%

develo

p new pro

dcut a

nd servi

ces 35%

00.10.20.30.40.50.60.70.8

Series6Series5Series4Series3Series2Series1


KNOWLEDGE MANAGEMNT HIERARCHY

Wisdom:

Wisdom is a condition of the human mind typified by deep understanding and deep insight. It is

often accompanied by widespread formal knowledge. Uneducated people can acquire wisdom,

and wise people can be found among the ordinary class of the people. Where ever it exists,

wisdom reveals itself as a perception of the relativity and relationships among things.

KNOWLEDGE:

Knowledge is processed information. Knowledge is fluid mix of framed experience, values,

contextual information, expert insight, and intuition.

INFORMANTION:

Information is collected of the data that make decision making easier. It is also facts and figures

based on reformatted or processed data. For example, a profit and loss statement provides

information. It is a collective fact put into a form that shows an organization’s state of heath

over a period of time.


WISDOM

KNOWLEDGE

INFORMANTION

DATA


DATA:

Data are unorganized and crude facts. They are stationary; they just sit there. For example, john

is 6 feet tall. This is Data; It does not necessarily lead one anywhere, however, the meaning one

bring to the evaluation of this data could be important. Such an assessment may indicate that

john’s height would make him an asset to the basket ball team. This becomes information.

NEED FOR KNOWLEDGE MANAGEMENT:

Knowledge management underlines a growing structure of ideas, techniques and technologies.

Fortune 500 companies loose close to 12 billion dollar annually due to poorly managed KM.

With this background the need of KM becomes even more pressing, however, skepticism the

surrounds knowledge management is not surprising giving the fact that it seems like just

another craze and one that can be, extremely expensive to follow. But for multinational

companies on the global stage and the new entrants on the global stage, the demand of speed

and distance make easily available information inevitable, while companies remaining local and

domestic both in the old age economy and traditional industrial sectors, they may be less

pressing for now.

The survival and success of business in the ever increasing competitive market place depends

significantly on the quality of knowledge, which those organizations apply to their business

processes. For example, the supply chain depends on knowledge of diverse area including raw

material, planning, manufacturing and distribution. Likewise product development requires

knowledge of customer requirements, new science, and new technology marketing.etc.

Case Study:

Dell Computer Corporation is a leading direct computer system company. In the United States,

Dell ranks number one and is a premier supplier, of PCs to business customer, government

agencies, educational institutions, and customers. Dell’s success has come from focusing on

direct sales, While other companies ignore this channel, Michael Dell formed the company in

1984 the Dollar 1000 of starting capital and venture capital forming what he refer to as the



“direct business”modle. In 1992, direct sale accounted for only 15 percent of PC sale, but by

1998 this sale method accounted for one –third of PC sales. Dell’s PCs are build to order, and

are enhanced by the knowledge the company gains from direct sale made in the past.

Dell has been able to succeed because it strives for quicker operation and lower overhead. Dell

keeps inventory cost low by turning inventory over every seven days on average and can turn-

sales into cash in 24 hours compare to Compaq’s

Average of 35 days. Dell is still improving its operations. The company has reduce the number

of parts in a PC from 204-to 47 and has been working on speeding up delivery of these parts,

moving selected distribution center from Malaysia to Mexico.

However, all of these achievements pale in comparison to Dell’s use of these internets. Dell

began selling PCs from the site www.dell.com in 1996 and recording daily sales over the

internet of dollar 50 million per day just 4 years later. The company set a goal in 1997 to have

50 percent of sale be over the internet, and reached that goal by the end of the first quarter of

2000. This is an increase from dollar 30 million per day over the past year.

However, Michael Dell does not see sale as the only value of the internet. Direct contact with

customers over the internet helps keep inventory cost down and gives the company a

competitive advantage. By having extensive knowledge of what the customer wants, money is

not wasted on un purchased inventory, crucial in the customer software industry where

inventory value decreases about 1 percent per week. These saving allow Dell to sell their

computers at 10 to 15 percent less than their rivals.

Dell’s direct sales method has translated to success in the computer industry on and off-line.

Question for Discussions:

1. how has Dell leverage knowledge and the new economic order to succeed?

2. What must the management of Dell do to continue its success?

3. How will their management of knowledge assets come into play?


http://www.dell.com/


Conclusion:

Organizations are realizing that intellectual capital or corporate knowledge is a valuable

asset that can be managed as effectively as physical assets in order to improve performance.

The focus of knowledge management is connecting people, processes and technology for the

purpose of leveraging corporate knowledge. The database professionals of today are the

Knowledge Managers of the future, and they will play an integral role in making these

connections possible.



Bibliography:

1. Knowledge management- Sudhir Warier.

2. Knowledge management- Elias M, Pearson Education.

3. http//:km/Introduction%20to%20Knowledge%20Management.htm.

4. http//:New%knowledgemanagement/20%/The%20Business%20Cycle%20Phases.htm.


What is knowledge management

Documents

Transcript of What is knowledge management