Knowledge Management Presented by Brad L. Hershberger, Itthipat Limmaneerak, M. Faisal Fariduddin A. Nasution, Melanie Swearengin, & Scott Shaw 1
Knowledge Management Trends • Survey of 423 organizations in the UK, Europe, and the US found: – 64% had KM strategy in place – 81% had KM, or were considering, a KM program – 75% believed KM can play a significant role in improving competitive advantage. (KPMG Consulting) Source: Reference 1 2
Knowledge Management Trends Spending on KM Billion of dollars • Overall worldwide spending on KM has been estimated to increase from approximately $3. 1 billion in 2000 to over $12 billion by 2004. “Document and Knowledge Management: After-Hype: KM Enters Critical Phase. ” Source: Reference 2 3
What is Knowledge Management? What is knowledge? 4
Knowledge Hierarchy Knowledge Information Data 5
What are data? Ø Ø Ø Data are a set of discrete, objective facts about events. Data are facts, numbers or individual entities without context or purpose. Example: A company has total sales of five billion dollars in Q 3 of the year 2003. Source: Reference 2 and 3 6
What is information? Information is data that has been added value through context, categorization, calculation, corrections, and condensation. Ø Information has an impact on a user’s judgment and behavior ( to aid decision making). Ø Example: Five billion dollars in Q 3 of this year are 10% increasing in sales revenues in Q 3 of last year. Ø Source: Reference 2 and 3 7
What is knowledge? Knowledge is the fact or condition of knowing something with familiarity gained through experience or association. • Knowledge is the human capacity (potential & actual ability) to take effective action in varied and uncertain situations. • Example: To gain higher growth rate in sales revenue, a company not only focuses on the domestic market, but also looks for the exporting market. • Source: http//: www. bus. utexas. edu/kman/answers. htm and Reference 3 8
What is difference between information and knowledge? Knowledge life cycle 9
Knowledge Life Cycle (in business) The user will learn what worked well and not so well as a result of applying the knowledge gained Learn Create Store Use The knowledge can be put to use towards some productive purpose It must be created either within or outside the organization Find Acquire the user will then go through the act of actually acquiring Source: www. processrenewal. com/files/def-km. doc It can be stored in somewhere Those who need the specific knowledge must find out where it is, when they need it 10
When does information become knowledge? Create Without the learning component, the cycle becomes an information delivery strategy. Ø The concept of learning is a key contributor Ø Learn Store Use Find Acquire Source: www. processrenewal. com/files/def-km. doc 11
Types of Knowledge It is also important to know and distinguish between the two kinds of knowledge that must be addressed in organizations Tacit knowledge Explicit knowledge 12
Tacit & Explicit Knowledge 13
Tacit Knowledge Defined “We know more than we can tell” “Something that we know when no one asks us, but no longer know when we are supposed to give an account of it, is something that we need to remind ourselves of” “All knowledge (is) personal and all knowing (is) action” Source: Reference 6, 7 and 8 14
Tacit Knowledge Explained Ø Can you calculate the arc, velocity and energy needed to successfully make a free -throw? Ø Explain to someone the mathematical formula for riding a bike. Ø Why does your favorite recipe, cooked by your grandmother, never seem to turn out the way you remember? 15
What’s wrong with tacit knowledge? Tacit knowledge posses difficulties in Knowledge Management for 3 main reasons: Ø We are not fully aware of having it Ø There is no personal need to make it explicit Ø There is a risk of losing power and competitive advantage Source: Reference 9 16
Explicit Knowledge Defined Ø Explicit knowledge uses a different part of the brain than tacit knowledge Ø Explicit knowledge can be codified and explained Ø Explicit knowledge can be separated from the individual Source: Reference 10 17
Examples of Explicit Knowledge Ø Documentation Ø Procedures Ø Mathematical Formulas Ø Intranets Information = Explicit Knowledge 18
What’s wrong with explicit knowledge? Ø “Instead of storing information in our brains, we design our environments to make it easy to find the information we need” Ø Explicit knowledge is devoid of action and “our knowledge is in our action” Ø “The narrative in itself is not enough for the other part to gain a complete understanding…” Source: Reference 11, 12 and 13 19
Knowledge Management (useful definition) “The systematic process of creating, maintaining and nurturing an organization to make the best use of knowledge to create business value and generate competitive advantage. ” Source: Reference 6 and 7 20
Interesting KM Statistics Ø Who is pushing hardest Ø The benefits achieved Ø Use of technology to manage information 21
Methodology KM Research Report 2000 by KMPG Consulting Respondents Actual % USA 101 24 UK 100 24 Germany 83 20 France 77 18 Netherlands 15 3 Scandinavia 15 3 Elsewhere (Italy, Spain) 32 8 423 100 Total Source: Reference 1 22
Who is pushing hardest? This indicates that the leaders of organizations understand the significance of KM and are driving their organization’s KM initiative Source: Reference 1 23
The Benefits Achieved The most significant benefits achieved included better decision making (71%), faster response to key business issues (68%) and better customer handling (64%). 24 Source: Reference 1
Use of technology to implement KM Internet (93%) and intranet (78%) are favored technology used in accessing data Ø Data warehousing and mining techniques are favored technology used in analyzing data 25 Ø Source: Reference 1
KM in E-Business 26
The Transition Ø Reason The disconnect between IT expenditures and the firm’s organizational performance. Ø Transitions made: l l Transition from information processing to knowledge creation. Transition from Total Quality Management to Business Process Reengineering. 27 Source: Reference 4
The Transition Ø Old l World: Phases: • Automation. • Rationalization of procedures. • Reengineering. Ø What is the new world of “e-business”? Source: Reference 4 28
The Transition Source: Reference 4 29
KM in E-Business Strategy Ø Transition paradigm shifts: l l l Paradigm shift in business strategy. Paradigm shift in design and use of technology. Paradigm shift in the role of senior management. Paradigm shift in organizational knowledge processes. Paradigm shift in economics of organizational assets. Paradigm shift in organizational design. Source: Reference 4 30
KM E-Business Strategy Ø Using intranet should be viewed as a KM environment with perspectives such as: l l l Information perspective Awareness perspective Communication perspective Source: Reference 5 31
Case Study 32
Bio. Technology research and manufacturing company Ø 5450 employees in 130 countries (Main headquarters in La. Balme, France. NA headquarters in Durham, NC. ) Ø 63 different manufactured products in 4 different disciplines (Bacteriology, Hemostatsis, Immunoassays, Molecular Biology) Ø 33
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Case Study 36
Company Profile: Employees Products Customers -145, 000 employees -Audit & Tax Consulting -SEC, Fortune 500 CIO reports to committee of partners Ø Over 400 IS professionals (25) on the SALT side. Ø Source: Reference 14 37
Merger - 1998 Price Waterhouse and Coopers & Lybrand Ø Combined six lines of business across 24 industries in over 152 countries worldwide with over 150, 000 employees Ø Different IT platforms Ø Thousands of servers with various information Ø Source: Reference 14 38
Goals for Merger Ø Meet Increasing Client Needs l Expand Globally with Clients Establish a Global Knowledge Base (Intellectual Capital) Ø Expand Range of Services Ø Become More Technology Oriented Ø Grow Revenue Ø Dominate Market Ø Source: Reference 14 39
Building the Knowledge Base Ø “To a great extent it is all we have and all we share and sell. It is the basis of what we do. We sell to clients the knowledge our consultants have and have access to. So managing the resources effectively and making sure we can share it across the consultancy is vital to us. It is the lifeblood of the organization” -Julia Collins, Head of Pw. C Global Knowledge Group Source: Reference 14 40
Issues and Challenges of Building the New Pw. C KM Tool Each line of business at the old companies only had access to their knowledge. Ø Differences in IT systems and organizations structure Ø E-mail networking and Intranet using Lotus Notes Ø Integration of databases and servers Ø Eliminate the senior executives from controlling access to information Ø 41
Final Results and Successes IT staff worked on a region basis instead of local office Ø Choose consistent information language (SQL, Novell, etc. ) Ø Combined databases and choose individuals to update them Ø Linked e-mail and lotus notes for a strong internal communication system Ø Creation of a global wide area network to link wide area networks of PW & CL Ø 42
What is KM to Me? Knowledge Management enable the efficient prioritisation, creation, retrieval and leverage of relevant content that: Builds and strengthens our client relationships Ø Supports the professional development and productivity of our people Ø Facilitates the development of innovative, quick-tomarket solutions Ø Fosters a continuous learning culture Ø 43
How Do I Use Pw. C’s KM? Pw. C’s Knowledge Management Tool (TALK) What is TALK? • Tax and Legal Knowledge TALK • A collection of resources, both internal and external Facts & Stats • A source for new developments, products and applications, research, publications, bulletins and discussion forums. --1, 000 databases --1, 780 websites -- 62 countries • A complete archive of old information 44
TALK U. S. Homepage 45
Knowledge Management divided into External & Internal sources External Sources: Ø Ø Ø BNA West. Law CCH Self study tutorials/reference guides In-house training classes Electives offered at major training conferences 46
External Sources: 47
Internal Sources Ø WNTS l WNTS tax developments communicates legislative and technical tax developments to the U. S. tax practice through WNTS Alerts and Spotlights. Info Source Worldwide Tax Summaries 123 countries Corporate Taxes Individual Taxes Tax References Files Technical documents Practice Tools Speeches & Presentations Pw. C Authored Articles 48
Pinnacle Internal Source Incentives to contribute Ø Certain mandates to contribute when working on certain projects 49
Tax Daily News Content: Daily electronic US Tax newsletter including leadership announcements and a summary of TALK contributions Ø Mailed daily to each tax professional Ø 50
Tax Yellow Pages What is it? Online, annually updated, directory of US Tax professionals and their principal areas of practice. What does it do? Reduce the time spent by professionals locating people and expertise across the US Tax practice. Issues Addressed: Clients want to contact Pw. C professionals with specialized experience; Pw. C partners need to dialogue with peers whose competence they trust; Pw. C staff need information on who works in area and how to contact them. 51
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Case Study 53
Company History: Ø Founded by Dr. Stanley Buckman in 1945 l Ø 5 employees; Initial customers were large paper facilities Customer base expanded leather, paint, sugar processing, agriculture, plastics industries and water treatment industries l Ø 1978 Sales = $29 million; 493 employees; 20 companies worldwide; 8 manufacturing plants; over 1, 000 specialty chemicals in their product line Ø New Leadership 1978 Bob Buckman became chairman and CEO “If you expand the ability of individual members of the organization, you expand the ability of the organization. ” Source: Reference 17 Bob Buckman 54
Knowledge Sharing Evolution STEP 1 Send out Ph. Ds to gather best practices l Costly & Inefficient STEP 2 Runners l Slow & Limited Knowledge STEP 3 GMs connected through network for email l Wrong People Conclusion “The people who really need the information were the people in front of the customer. ” Bob Buckman STEP 4 Field Sales people given access 55
Knowledge Management Strategy Ø Ø Ø Ø Simplify the lines of communication Gives everyone access to the knowledge base of the company Allow each individual to enter knowledge into the system Function across time and space with the knowledge base available 24/7 User friendly Communicate in whatever language is best for the user Update automatically – the accumulation of technical Q&A should generate knowledge bases for future Source: Reference 17 56
Knowledge Transfer Department 1992 – Knowledge Transfer Department created (Head reporting directly to the Chairman. ) Ø Company’s network on Compu. Serve, the public online service Ø Sales people got a leased notebook with a modem Ø Point-point link with headquarters by a phone call Time frame: 30 days to implement Cost: $75, 000 per month in access charges Source: Reference 17 57
K’Netix System Forums: Ø Tech Forum – open to all employees, message board, conference room, library section Ø Internal Forum – focused on internal improvement Ø Business Forum – focused on helping the customer ALL Forums: Monitored by System Operators & Section Leaders Ø All forums set up in English - translators were hired Ø 58
Source: Reference 18 59
Motivation “Those individuals who have something intelligent to say now have a forum in which to say it…Those who will not or cannot contribute also become obvious and can be intelligently eliminated from the organization. ” Bob Buckman 1994 invited 150 top knowledge shares to Scottsdale, Arizona for retreat Ø Received a new IBM Think. Pad 755 Ø Source: Reference 17 60
Evaluation Ways to Improve: Ø Increase participation by non U. S. Associates l l Cultural issues - not cool to type or ask for help Language problems - Forums set up in different languages Results: Ø Ø Ø 1994 KTD = $8. 4 million (plans to spend $9. 5 million in 1995) 65% of sales people out selling - 16% in 1979 33% sales from products less than 5 years old - 22% prior to K’Netix 1999 sales = over $300 million Received the Arthur Andersen Enterprise Award & Smithsonian Computerworld for Knowledge Sharing Source: Reference 17 61
Summary 62
Summary Ø Ø Ø Definition of knowledge management What distinguishes knowledge management over information and data Types of knowledge Interesting statistics of knowledge management The transition to implement knowledge management for e-business Implementing knowledge management to firms 63
Disadvantages of and challenges to implementing knowledge management Not all people in the firm would share their knowledge. Ø Not all people in the firm understand the concept of and how to implement knowledge management. Ø The implementation of knowledge management can be considered as another expenditure to the firm by the senior executives and / or non-IT people in the firm the chance of failure like the other IT projects. 64 Ø
Best Practices Ø Ø Ø Ø Foster communication between skill areas. Promote product training. Create open physical work environment. Encourage independence and risk taking. Provide extensive documentation. Make support resources easily available. Expect large learning curves in projects. 65
Best Practices Developed to be highly specialized By country, industry, idea, business unit. Ø Divided by external and internal sources: rd party information l Can take advantage from 3 services. l Can take advantage of internal ideas. Ø Available to clients: l Filtered information is available to clients. Ø Highly accessible to firm employees: l Intranet, Lotus Notes and Internet. Ø 66
Best Practices Ø Ø Ø Simplify the lines of communication Get information to the people in front of the customer Give everyone access to knowledge base of the company Operate 24/7 Operate in users preferred language Track all research for later use 67
References 1. KMPG Consulting; “Knowledge Management Research Report 2000”, p. 5 -9, 14 -16. 2. “Document and Knowledge Management: After-Hype: KM Enters Critical Phase. ” Computing Canada, April 14, 2000. p 13 3. “The Introduction to Knowledge Management” by Dr. Nancy Shaw, an assistant professor at George Mason University's School of Management”, URL: http: //www. icasit. org/km/intro. htm , slide page. 5 -7 4. Yogesh Malhotra, ‘‘Knowledge Management for E-Business Performance: Advancing Information Strategy to Internet Time’’, In the Executive’s Journal, V. 16, No. 4, pp. 5 -16, 2000. 5. Dick Stenmark, “Information vs. Knowledge: The Role of Intranets in Knowledge Management”, URL: http: //www. viktoria. se/results/result_files/183. pdf. 6 Polanyi, M. The tacit dimension. Reprinted in L. Prusak (ed. ), Knowledge in Organization. Boston: Butterworth-Heinemann, 1998, pp. 135 -146. . 7 Wittgenstein, L. (1958). Philosophical Investigations. Oxford: Blackwell. . 8 Tsoukas, H. Do we really understand tacit knowledge. Presented to Knowledge Economy and Society Seminar, LSE Department of Information Systems, 14 June 2002. . 9 Stenmark, D. Leveraging Tacit Organizational Knowledge. Journal of Management Information Systems; Winter 2000/2001; 17, 3; ABI/INFORM Global pp 9. . 10 Schachter, D. L. , 1998, ‘Memory and Awareness’, Science 280, 59 -60. 68
References 11. Gorman, M. E. Types of Knowledge and Their Roles in Technology Transfer. Journal of Technology Transfer; Jun 2002; 27, 3; ABI/INFORM Global pg 219. 12. Schön, D. A. , The Reflective Practitioner, Basic Books, 1983. 13. Stenmark, D. Information vs. Knowledge: The Role of intranets in Knowledge Management. Proceedings of the 35 th Hawaii International Conference on System Sciences, 2002. 14. Mc. Cauley, M. Pricewaterhouse. Coopers: Building a Global Network. Case Study, Centre for Asian Business Cases, School of Business, The University of Hong Kong. 2000. 15. Behrend, E. Knowledge Management Resources. Tax Start, Philadelphia. August 13, 2002. 16. Weinreibh, A. SALT Knowledge Management Resources. Tax Start, St. Louis. July 18, 2002. 17. Fulmer, William E. , Buckman Laboratories (A), Harvard Business School, 9 -800 -160, January 22, 2003. 18. Buckman Laboratories, www. knetix@buckman. com, October, 2003. 19. Buckman Laboratories, Bulab Holdings Annual Report 2002. 69
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