Your Say: beyond the horizon

Many expected knowledge management to go the way of business-process re-engineering, but almost a decade after the term was coined, KM is still going strong. Simon Lelic talks to representatives from Delta Strategies, EDS Solutions Consulting, iBILT Technologies, IBM and UNIC, and explores what’s next for knowledge management, as a discipline and as an industry.

Contrary to the expectations of many early sceptics, knowledge management is still very much alive and kicking. Claims that KM would turn out to be the latest in a long line of short-lived business fads now sound like nothing more than misplaced cynicism. As a set of managerial disciplines, knowledge management has more devotees than ever, and understanding of the issues that KM should be a means of dealing with has seemingly grown in step. Likewise, the industry that has formed around knowledge management, and indeed what can perhaps be classed as subsets of KM as a whole, has bucked the technology trend in recent years, recording impressive levels of growth. Furthermore, analysts expect this growth to continue in the immediate future; industry analyst IDC, for example, predicted recently that the KM market in Europe alone would be worth some $4.2bn by 2006.[1] There is no doubt, though, that knowledge management, both as an industry and as a set of disciplines, is changing. In such a fluid world economy, this is of course essential if KM is to continue to be of value, but quite how knowledge management will evolve from here is far from clear.

What does seem certain, however, is that the knowledge-management movement has plenty left in the tank. As Dave Snowden, director of IBM’s Cynefin Centre for Organisational Complexity, says, “KM has proved remarkably persistent, partly because it addresses issues that arouse passion in its advocates. While the focus on tacit-to-explicit knowledge conversion is just passing its peak, the proper use of information-management tools and the cultural aspects of KM is in the early stages of growth.” This sentiment is echoed by Libby Ralph, knowledge management practice leader at EDS Solutions Consulting, who suggests that many organisations, particularly those in the public sector, are only just beginning to get to grips with the concepts that KM entails, and to recognise that knowledge management is a much wider issue than simply creating a knowledge repository. As Shantanu Ghosh, a KM consultant for iBILT Technologies, puts it, “If we look at the number of successful cases where organisations have implemented and derived maximum benefit from their KM initiatives, the figure is really dismal. There is a huge gap between theory and practice. I don’t think KM has even reached 50 per cent of what it can offer.”

As covered extensively in a recent issue of Knowledge Management[2], and as already alluded to in this article, knowledge management has thus far focusedprimarily on capturing tacit knowledge and distributing it in a more explicit form. Leif Edvinsson, who became the world’s first director of intellectual capital at Skandia in the early 1990s, believes the current generation of knowledge management will focus more on the principles relating to knowledge navigation and knowledge-based economies. “The emerging dimensions of KM will centre on value creation through intangibles, implying new types of organisational settings and a new context for knowledge workers,” he says. At the same time, Ralph expects a renewed emphasis on the importance of linking KM implementation to the strategic aims of an organisation. “In focusing on capture and distribution, organisations have sometimes failed to ensure that the knowledge they are capturing and distributing has some business value,” she says. As such, she feels contemporary interpretations of knowledge management will revolve around the need to bridge the gaps that may exist in an organisation’s knowledge base, resulting in strategies that hinge on knowledge creation and knowledge discovery. She cites the growing emphasis on, for instance, evidence-based policy making in government departments and customer-driven knowledge in the retail sector as indications of this trend.

In terms of industrial sectors, Edvinsson predicts the biggest boom for knowledge management to come in health, education and security. Ghosh, too, expects healthcare systems to be at the forefront of KM implementation in the coming years, in addition to firms operating in the pharmaceutical and energy industries. And while Arevuo believes SMEs are likely to remain indifferent to the theory of knowledge management, in practice he feels many are already at the cutting edge of the discipline. “Ask any MD of an SME what makes them successful and they will give you an answer based on tacit knowledge,” he says. “Perhaps some larger companies would benefit from following their example and trying to institutionalise a similar culture in their own organisations.” He goes on to suggest that financial-services firms will continue to lag behind their peers, due mostly to what he describes as a ‘short-termist’ outlook among investors and managers in the sector. Both Snowden and Ralph, on the other hand, are reluctant to point to specific industries. Snowden feels economic cycles will continue to dictate which sector has the money, and the inclination, to invest in KM, while Ralph expects the broadening acceptance of the value of KM to precipitate widespread adoption. “As people begin to relate KM to the value of sharing knowledge and experiences, KM as a discipline is being explored across more and more sectors,” she says.

Those businesses that do make the decision to invest in KM will find that the technological side of the discipline, so heavily hyped in the past, is changing at least as quickly as any other. For Arevuo, this will mean a steady growth in the perceived value of visualisation tools. Already, he says, some firms are realising just how powerful such technologies can be, notably State Street Bank (in Arevuo’s opinion one of the few financial institutions to have successfully implemented a KM programme), which is currently reaping the benefits from a tool that allows investment flows to be turned into visual data, enabling investment managers to track the flow of funds around the world on a real-time basis. Similarly, Snowden predicts significant advances in the use of narrative-based tools to both capture and reveal knowledge, perhaps as early as this autumn. Document management (DM), which in various guises has dominated KM offerings for years, is unlikely to take a back seat, but Ghosh feels that a reassessment of the traditional centrality of DM tools is long overdue. Artificial intelligence and multimedia technologies, he says, will have a big impact in the new technological order.

Any shift in the technology landscape will also depend on the future shape of the industry that has grown up around knowledge management. The biggest change here, according to Ralph, will be a continuation, and perhaps acceleration, of the current propensity for vendors to hook up with consulting firms. “The KM industry to date has been biased, in volume terms at least, towards technology and tool vendors,” she says. “To begin with, tools were marketed as generic, but now more solutions are being offered that are tailored to particular business problems. The reality, though, is that these still do not address business and cultural issues. As such, I believe the industry will move towards consultancy in how to make KM successful. To support this, tool vendors are actively seeking stronger alliances and joint propositions with consulting firms.” Witness, for example, IBM’s recent acquisition of PwC Consulting. Nevertheless, Ghosh for one expects the number of vendors active in the KM arena to continue to grow, while Snowden predicts a proliferation of smaller, specialist groups. Whatever happens, the industry will remain as competitive as ever.

Indeed, in such a diverse and, for many, confusing marketplace, many commentators feel that vendors and practitioners alike would benefit from the development of a set of industry standards; guidelines and metrics by which organisations would be able to gauge their own progress against what is widely accepted to be good KM practice. Efforts to define standards in knowledge management are already underway in numerous organisations operating in a number of countries, including the US, Britain, Australia and elsewhere. But this is an extremely contentious area. On the one hand, as Ralph says, developing a common understanding of the stages of KM maturity within an organisation and using this understanding to benchmark organisational performance is a realistic goal, and may help businesses to learn from the experiences of others. On the flipside, as Ralph continues, KM is an extremely broad discipline, or set of disciplines, rather than a specific process, and setting common standards may be too prescriptive. Snowden is himself torn on the matter. As he says, there is currently widespread debate about potential conflicts of interest among many of those involved in the standards-making process. As things stand at the moment, it is unlikely that any single initiative to define a common set of KM standards will unite the KM community. Quite the opposite, in fact. The development of a set of universal standards for knowledge management therefore seems a long way off yet.

‘Knowledge management’ itself has, of course, always been something of a misnomer, and any debate about the future of KM will inevitably touch on whether or not it is also time for a shift in terminology. The term itself may be partially responsible for the creation of the illusion that KM is a single, separate activity, distinct from everyday tasks. Many would also argue that it has been tainted by widespread disillusionment after early ‘knowledge management’ offerings failed to deliver on their promises. That said, and as Ghosh points out, failure with KM is usually down to poor levels of understanding rather than branding per se, and very few credible alternatives to ‘knowledge management’ have thus far emerged. In a sense, therefore, the question is somewhat redundant. What really matters is that organisations recognise the value of the principles and practices that sit at the heart of what we call knowledge management, and act to integrate these with their own operations. Fortunately, this process is already well underway. That said, however, the debate about standards will no doubt run and run, software firms will come and go, and organisations in certain economic sectors will experience more success with KM than others. At the same time, KM is subject to ongoing and rigorous debate, the associated tools and technologies continue to evolve, and practitioners are able to learn from the mistakes of the past. Knowledge management has never looked in such good shape.

References

1. ‘European KM market shows strong growth’ in Knowledge Management (Ark Group, November 2002)

2. ‘KM and knowledge creation’ in Knowledge Management (Ark Group, April 2003)

Contact details

Mikko Arevuo is managing director of Delta Strategies. He can be contacted at marevuo@deltastrategies.co.uk

Leif Edvinsson is CEOof UNIC. He can be contacted at leif.edvinsson@unic.net

Shantanu Ghosh is a KM consultant for iBILT Technologies. He can be contacted at shantanughosh@consultant.com

Libby Ralph is knowledge management practice leader for EDS Solutions Consulting. She can be contacted at libby.ralph@eds.com

Dave Snowden is director of IBM’s Cynefin Centre for Organisational Complexity. He can be contacted at snowded@uk.ibm.com