Knowledge Management Systems : Alchemy for the 21st century?

Feature

posted 1 Nov 1998 in Volume 2 Issue 3

Knowledge Management Systems - Alchemy for the 21st century?

Companies may search for the quick route to efficient Knowledge Management through 'off-the shelf' solutions, but as we all know, the perfect alchemical compound does not exist! Chris Davies suggests seven phases of development for the Knowledge process to ensure a holistic perspective.

Why is knowledge so important? No doubt about it, knowledge is a strategic issue. There may be disagreement about the best way to handle it but any organisation which is not grappling with the knowledge management agenda and finding its own way forward is putting itself at serious risk from competitors who are taking it seriously.

Many organizations are suffering from the fact that corporate knowledge resides with individuals or in filing cabinets and is not shared for the benefit of the business. They also lose precious skills and knowledge when key employees leave the company. Any organisation needs to ensure that it takes full advantage of the intellectual property it already has and applies its knowledge in ways that will show tangible benefits in its key operations.

It has become increasingly obvious over the last few decades that the value of an organisation has less to do with its physical assets and more to do with its intellectual assets. In many cases knowledge has become the product itself rather than a supplementary piece of gift wrapping around a traditional product. At the same time there has been a globalisation of trade and a requirement to collaborate with colleagues and partners in all four corners of the world. Combine with this the competitive demands of the marketplace to innovate, design and launch new products faster than ever before. Add to your picture the various messaging channels bombarding you with information 24 hours a day including communication with customers over the Internet, with suppliers across an Extranet and with colleagues across the intranet. You now have the ingredients for, on the one hand rapid growth, or on the other hand early extinction and a nervous breakdown! The key to survival is knowledge management.

It may be true to say that knowledge management is not new and that it is 'just common sense'. I would agree that the principles are well established although I think that it is no longer reasonable to leave intellectual capital to the ad hoc application of common sense. For competitive advantage it needs to be managed 'systematically' (although there may be formal and informal elements).

The 'philosopher's stone'

Seductive as it may be the simple hierarchy from Data to Information, Knowledge to Wisdom simply does not hold water. Approached in the right way a knowledge management system can act as a kind of 'philosopher's stone' and turn Data into Information. Approached in the wrong way, Information can be turned into Data again as users are swamped with facts that have no shape or relevance to the task in hand. Especially seductive are the 'knowledge management' solutions that take the guise of technology alone. Beware of the one-track approach as it can be costly.

Separating the 'signal' from the background 'noise' demands an organised approach encompassing best practice from several different disciplines These include Benefits Management, Employee Communications, Process Engineering, Knowledge Management, Change Management, Information Technology and Telecommunications. Any solution must start with a set of well-defined business benefits and must take into account a range of issues including: culture change, processes, content and technology. Without this holistic approach the real business benefits are likely to be minimal.

Technology has an important part to play but it must be seen as a facilitator rather than a leader of change. Off the shelf 'Knowledge Management systems' which focus entirely on a piece of technology are destined to disappoint the users.

Technology has a specific role at each of the four main stages in the evolution of a knowledge management system. At the start it provides connectivity by means of LANs, WANs and remote dial-in facilities which enables people who were working in isolation to work together. Later the provision of an intranet offers a valuable means of communication. As people learn more about the potential of an intranet as a tool for knowledge creation and sharing they enhance its value by using its interactive capabilities, providing more contextual information, capturing 'tacit' knowledge, and incorporating conferencing and intelligent agents. Having proved the success of this approach internally the focus then shifts towards extending the knowledge base to customers, suppliers and agents using the Internet/Extranets.

The development of a corporate knowledge management system is not unlike Piaget's description of human development. At the first stage (Sensorimotor) we are able to recognise the fact that information has a permanence and relevance. The second stage (Pre-operational) is characterised by the way we classify objects by a single feature and a very egocentric view of the world. At the third stage (Concrete Operational) we can classify objects according to several features and we can operate on facts in a logical way. It is only at the fourth stage (Formal Operational) that we can think logically about abstract propositions and test hypotheses systematically. We are then able to deal with the hypothetical. With careful steering and the application of innovative minds, knowledge management systems can evolve in similar ways.

Corporate memory based on a Data Warehousing approach is all well and good but has an inherent danger of locking us in to a 'Pre-operational' view of the world. Recalling facts is not enough. Users want to understand patterns of information and to view it from different perspectives. They want to be able to apply principles to new situations, to create and collaborate. It is often the 'information about the information' or metadata, that provides the greatest value. To collect this kind of information needs a different approach as most of the data resides in people's heads and is not documented. What is required is a system that assimilates new learning based on the experiences of its users and accommodates that learning in more and more sophisticated models of the world. At the moment this requires an important element of human intervention. To create such a system may sound ambitious but it is important that the mind set is one of flexibility and growth as opposed to data capture and preservation.

Where to start?

Notwithstanding the individual differences between organizations in their particular perspective on knowledge management, there are two vital ingredients for success. First the system must help the user find the company 'expert' without wasting time in abortive searching. Secondly it must present information to the user 'in context' enabling them to make better decisions.

At a formal level where people are following well defined processes and procedures the knowledge requirements can be fairly accurately mapped and supplied to the user within a disciplined information management framework. For more creative and innovative work the emphasis would be on less formal techniques to enable people to collaborate, share and develop new products and services. The way in which technology is deployed would be different in each case.

What is required is a proactive approach to creating, enhancing, sharing and applying knowledge with a clear focus on business objectives.

For our customers the business objectives are typically:

Improve sales through better problem/ solution definition

Reduce costs through faster access to reliable information, less reinvention of the wheel and quicker decision making

Reduce risk by keeping employees better informed

Speed up product launch processes by sharing expertise

Reduce recruitment and training costs by making expert knowledge available to everyone at the right time

Facilitate co-operative working with partners/potential partners

Reduce Call centre costs

Collaborate with home workers and colleagues across international borders

Where can knowledge management be applied ?

Any organisation that recognises the following danger signals should be actively investigating the solutions that knowledge management can offer:

Knowledge is not gathered and work is duplicated, re-created or lost

Knowledge is not shared and resides with a few key experts resulting in slower decision making

Knowledge is not applied to the work processes which are consequently much slower than they ought to be

There is no systematic process for continuous learning

Failure costs incurred due to lack of understanding of Regulatory policy constraints

Failure costs incurred due to ill informed risk- taking

Failure time in Call Centres answering queries that could be handled without human intervention

Mandatory procedures not communicated efficiently

Cumbersome processes for reporting

Difficult to share information with partners/agents/suppliers/potential merger organizations

The Opportunity

In a market place where organizations are increasingly competing on knowledge rather than the inherent merits of their product (which has become a commodity), the value of the organisation depends on the success with which these opportunities are grasped:

Maximising the existing knowledge of the organisation

Making it easier for information to be shared by the use of appropriate technology

Helping the organisation take advantage of learning

Bringing all the people up to the level of the best

Providing the correct information for the right people at the right time in the right format

In our experience the best approach follows the Seven Phase Model described below:

Phase 1: Assessment of readiness

The purpose of this phase is to identify which perspectives on knowledge management are critical for your business. Then one can to start to relate them to the business and make an initial assessment of the readiness to change. This should cover cultural issues as well as processes and technology.

Phase 2: Knowledge Audit

It is vital that any KM initiative has well defined boundaries. The single most common reason for problems in the KM field is the failure to focus on a manageable problem. This phase must identify the knowledge that matters. Business benefits should also be identified at this stage. These will provide the measures of success.

Phase 3: Current initiatives

The purpose of the phase is to bring into the open other initiatives that are already underway or planned, which have a bearing on the KM initiative as defined in Phase 2. This will enable them to be harmonised and will assist the process of gaining support from the appropriate stakeholders.

Phase 4: People & guidelines

At this stage you need to ensure that all the basics of good information management are in place before trying to construct a KM system. The fundamental principles of good Information Management established by BT in building its own system were fundamental to the development of our knowledge system. It is important to take a process perspective crossing internal boundaries. A plan to deal with the cultural and human change issues should be created at this stage.

Phase 5: Design / mapping

The purpose of this phase is to maintain the momentum of the project by quickly mapping the knowledge requirements and building a model of the KM design.

Phase 6: Technology

At this stage the requirements for your KM system are clear. You now need to think about the right platform and technology and communications infrastructure to deliver the solution.

Phase 7: Review of benefits

The purpose of this phase is to review progress in order to ensure that the business benefits identified have in fact been delivered and to identify action for further improvement where possible.

Conclusion

There is no 'philosopher's stone' or alchemy which can be bought off the shelf to deliver success. In her latest book ("Frontiers of Management") Rosabeth Moss Kanter describes the management challenges facing organizations as they move into what some have called the "Knowledge Era". Her arguments put knowledge management at the heart of the agenda for business transformation:

"A new view of the corporation has emerged and become accepted as the model: one which is flatter, more focused, speedier and more customer service oriented and that includes more teams and projects, more cross functional contact, more partnering with customers and suppliers, more strategic alliances, more consciousness of social responsibilities. Change - adept organizations are dynamic, open systems with many active pathways for participation and influence, with many people involved in the search for better ideas, and with rapid feedback loops extending within and without the organisation. They innovate, stress learning, and collaborate with allies and partners".

In order to grapple with a challenge of this kind a holistic approach is required with clear business needs established. Any successful Knowledge management initiative must address the full range of issues from Strategy to Process, Technology and Culture change. Anything less will only have a temporary effect and will not provide the pay back sought by most organizations.

Chris Davies is a Knowledge Specialist at the Net Business Solutions Team, BT.