denotes premium content | Jun 20 2013 Feature
posted 1 Sep 1998 in Volume 2 Issue 1
The Hidden Cost of Knowledge
Management
Although companies are fawning over KM as an answer to all of their
shortcomings, Richard Gaunt believes that many are still ignoring the hidden
cost - namely, the human resources needed to implement the technical side of a
knowledge solution.
To one degree or another, achieving a competitive advantage depends on
an organisation's ability to effectively manage the information within it,
whether it be knowledge of particular strategies and corresponding success
rates, details about particular customers or competitive information. Thanks to
technology, information is growing at alarming rates. The challenge is to
cost-effectively manage and convert this information into knowledge, which will
assist decision making. However, the hidden costs of managing this information
can potentially cripple a business.
Sources of information within an
organisation include not only intranets and the Internet, but personal
documents, archive information, and employee expertise. Personal documents
include excel spreadsheets, emails, and graphic files. The mining of employee
expertise is a valuable resource that, although difficult to capture, can prove
invaluable. With all of this disparate knowledge at hand, employees should have
the opportunity to make more informed decisions. However, the time wasted on
harnessing information leads to employees experiencing reduced job satisfaction,
duplicating work effort and losing personal time. 60% of European employees
spend an hour or more a day duplicating the work of other employees. Employees
and companies waste potential and fall behind competitors.
When an employee spends time finding
information, vital statistics can often be missed. Companies today should start
thinking about managing their knowledge assets to ensure employees are
productive and their organizations remain competitive. Corporate intranets can
assist communication between offices across multiple continents, but this new
technology also endangers the traditional way employees would share information.
In the absence of the canteen or common office area, traditional means of
knowledge sharing, such as shouting across the office and exchanges by the
photocopier, are becoming obsolete. In addition, flexible-working patterns where
many companies are allowing employees to work at home is also a knowledge
sharing issue. While this allows an individual flexibility in working style, it
cuts them off from the interaction and knowledge sharing that would happen in a
traditional office. If a company doesn't instigate an effective knowledge
management system to cope with this new dynamic organisation, they are ignoring
their greatest asset - the knowledge of their employees.
Although Knowledge Management covers a
broad range of techniques, almost all have in common a reliance of 'tagging'.
Even the most advanced search engine developed for the intranet needs everything
it searches to be tagged for it. The result is a company's need to employ an
army of 'elves' - extra editorial staff whose sole purpose is to manually tag
each bit of information for future use. The more comprehensive the information
source, the greater need for additional elves. This approach, effective to a
point, bears a vast administrative overhead, reduces the impact of the system
and de-focuses the employees concerned from core job functions.
Employing these
editorial elves to manage this knowledge could cost an organisation employing
1,000 people over £10 million per year in labour costs alone, paying staff to
manually categorise and tag all written documents generated by corporate users
(and thereby wasting 1 million hours). Everything needs tagging including
spreadsheets, proposals, emails and minutes, with the task being continuous and
onerous. Assuming that organizations are attempting to manage their disparate
knowledge resources as a means to increase competitive advantage and
profitability, this quantity of wasted time and money is very difficult to
justify.
Requiring employees to tag their own documents is not the answer,
either. The goal of a comprehensive Knowledge Management system is to make sure
that today's e-mail message or critical memo can help someone who may need it a
year down the line. Put yourself in the shoes of the average employee. You've
just written a potentially useful email message. It is 4:30 in the afternoon and
you still have 12 items on your 'to-do' list. Are you really going to take the
time to look up the appropriate category and insert the relevant tag, just in
case a colleague in another office might someday find your email message
useful?
This
problem will become very common as technology produces more and more information
in digital format. Knowledge Management is just one of the disciplines that
faces this situation. The solution, I believe, will become as fundamental a
piece of technology as the X86 processor or the relational database. That
solution is a way of computers recognising and finding complex concepts, not
just words.
Current Knowledge Management solutions are based on pre-defined words
or groups of words misnamed as 'concepts', which consequently limit their
search value. For example, a keyword-based search, on the word 'Penguin', may provide
the user with a volume of irrelevant items across the corporate intranet that
includes the word Penguin. On the other hand, using a 'intelligent' approach,
the computer understands the context of a specific search and would know that
you are looking for information about Penguin chocolate biscuits and not the
bird. Added to this, it will also understand that Penguin in this context is
linked to the term 'Snack' and that articles on snacks may also be relevant.
Better still, even if language changes, as if often does in the scientific or
computing worlds, this approach will automatically adjust itself to recognise
new words and relevant articles.
This important technology is available
today. Knowledge Server from Autonomy is the first product of its type; if
analysts are right it will be the first of many. Combining Bayesian probability
and information theory it can recognise similar concepts in language even when
language itself is dissimilar. As a consequence documents can be tagged without
human intervention.
The significant by-product of automating the process, based on relevant
'Concept Agents', is that it can capture tacit knowledge. Often described as the
'Holy Grail' of Knowledge Management, tacit knowledge has always been difficult
to quantify - and even harder to capture. Because it refers to knowledge held
within people's heads - rather than explicit knowledge such as documents,
spreadsheets, emails and corporate databases - the traditional approach to
identifying it has relied on employees filling out endless questionnaires, in
order to build up personal profiles from the content an employee frequently uses
and researches, as well as the ideas within documents and email messages
generated. The cost of filling out questionnaires and then manually categorising
each piece of information significantly adds to the cost of Knowledge
Management. By contrast, the automatic concept approach 'watches' the concepts
in every email or document you write or read, logging this centrally on a
'profile' that can be searched.
There is no denying that Knowledge
Management will continue to be of vital importance to organizations looking to
exploit all of their intellectual assets. Intranet and GroupWare technologies
will play a significant role in the solution, but the hidden financial cost of
human intervention in implementing a Knowledge Management strategy should be
acknowledged. Automation of the Knowledge Management process, based on relevant
Concept Agents, will help to provide the benefits of Knowledge Management
without the crippling effects of unnecessary labour costs.
Richard Gaunt, Technical Director
and Co-founder of Autonomy Ltd.
autonomy@agentware.com
