Knowledge-enabled e-business

Adding value to e-commerce initiatives through knowledge management – Part II

The effects of globalisation have precipitated a huge increase in the importance of e-commerce to organisations operating in every sector. In the concluding section of this two-part article, Paul Louis Iske and Tony de Bree outline the role of knowledge as a key differentiator in e-business strategy, and describe a number of knowledge instruments that can help your organisation achieve that crucial degree of competitive advantage.

Knowledge instruments

In this section we will describe a variety of instruments to consider, and relate them to the KM model that was developed by Twijnstra and Gudde under Professor Weggeman (see my article ‘Portals and the Knowledge Value Chain’ in Knowledge Management, March 2002) and to the organisational model described in part one of this article. In these models, knowledge is interpreted as a production factor, which should be managed accordingly. The management of knowledge should in turn be regarded as part of the strategic thinking of a company, involving its own customer value creating (operational) processes. It has its triggers and feedback loops stemming from different processes of the business area. The model, called the knowledge value chain (KVC) consists of the following steps and is a cyclical process:

Analyse knowledge requirements (link with strategy);
Develop or acquire knowledge (building knowledge capabilities);
Share and distribute knowledge[1] (efficiency, effectiveness);
Apply knowledge (value being realised);
Evaluate knowledge (link with strategy, experience).

This KVC can be supported by a variety of instruments, but before implementation the state of organisational readiness needs to be examined. This analysis assesses the organisational willingness and ability to actually implement the proposed instrument(s). This analysis will most likely lead to clues that will indicate what may or may not work. Awareness of important environmental variables before project implementation is a key to successfully achieving the full-scale project’s objectives. For each instrument we will indicate the deliverables, critical success factors, enablers and roadblocks. These can serve as input for the prioritisation process. A study is currently being carried out with a group of exchange students from Erasmus University, with the objective of creating an overview of KM instruments, the investments that have to be made for implementation, the potential business benefits and the conditions to be fulfilled in order to achieve the possible benefits.

A stakeholder map

Since individual people are responsible for developing, evaluating and implementing a business strategy, a stakeholder map is the starting point for identifying instruments and methods that will help to realise the full benefits of existing and newly created knowledge. This stakeholder map includes the relationships between stakeholders and is therefore also referred to as a relationship map. In the context of this article, stakeholders may include:

The (e-)business project managers;
Senior management;
Other employees;
Customers;
Strategic partners;
Suppliers;
Competitors;
Any other stakeholders, such as the relevant national government, the European Commission, and so on.

We call these customer value creating (or destroying) relationships ‘relationship capital’.[2]

A knowledge map

In almost all KM projects, the creation of a knowledge map is one of the key activities to be undertaken. This map has to be developed by analysing the knowledge that supports the people in the organisation so that the business processes and projects run efficiently and effectively. These processes include the strategic business decision processes, in order to ensure alignment with business strategy. The knowledge map is a set of knowledge domains, and for each of these the following questions are asked:

Is knowledge in the specific area of strategic importance for the business?
If yes, who has/wants to know what?
Where is the knowledge and how do we make it available?

To find the answers to these questions, discussions are required with the relevant stakeholders. Experts in the different areas need to give their input to assess business relevance, and to support the implementation of the development and governance processes. The following domains could be considered in a collaborative environment:

Projects – what do we want to capture in order to benefit from the results of projects, to align them, and to execute and evaluate the e-business strategy? (note that e-business activities will primarily take place in a project-based or other such temporary setting, so it will be extremely important to leverage project management skills);
Technology (eg, in the area of transactions, content management, identification, data mining tools, e-metrics and e-performance) – what do we need to know about available, applied and new technology?
Customers (eg, a client database, data mining tools) – customers as scarce resource. What do we need to know about them?
Products and services (and content in general) – we need to know what we can and/or want to offer to our customers, now and in the (near) future;
Suppliers – likewise, it is important to know what suppliers our organisation has used and what other partnerships the organisation has been developing and leveraging;
Competitors – in the volatile world of e-business, it is also important to know who our competitors are (or will be), both within the traditional industry context and within the context of the emerging GKE, and what they are doing;
Who’s who – organisational information, but from a user (or even customer) perspective. In the rapidly changing and growing organisations of today (particularly in terms of e-business networks) value can be added by creating an overview of the people and teams in the organisation, in a strict and in an extended sense, including their specific knowledge, skills, roles and responsibilities;
Processes, policies and procedures – it is probably relevant to develop and share embedded knowledge as part of established processes, policies and procedures. These can be internal as well as external (eg, privacy policies, internet protocols and so on);
Environmental information regarding, for instance, the topics described in figure 1 (see part one of this article, published last month). This contextual knowledge creates awareness within the organisation and across the e-business network of current trends and developments in the market and in broader society.

Figure 1 - interactions within an organisational environment

After the knowledge map has been constructed, prioritising based on our strategy will be the first step towards actual development and implementation. Knowledge domain owners will be made responsible for the creation and quality of knowledge/information. This work has to be integrated in work objectives and should be appraised and rewarded as such.

Deliverables: an overview of the customer and business-critical knowledge that supports the e-business strategy; a knowledge perspective on the field of e-business; a common language in this rapidly evolving area.

Critical success factors: availability of experts from within the organisation or from within the e-business network to identify key knowledge; understanding of the importance of the activity.

A knowledge repository

If the relevant knowledge domains are identified, various tools can be applied to capture, share and use knowledge. In the case of explicit knowledge (denoted as content, such as documents and data/information files), systems need to be implemented to store, retrieve and manage it, eg, via databases and/or content/document management systems. For sharing, it is important that everyone has access to the knowledge that they need. In the current environment, this usually means an intranet powered by a content management system, incorporating database functionality. The intranet environment could potentially be coupled with an externally oriented environment (the internet or an extranet) in order to share knowledge with partners and customers. The internet/intranet/extranet environment also offers possibilities for exchange of personal and dynamic knowledge by stimulating discussions and enhanced communication in general.

Deliverables: an environment where one can find tangible, reliable and business-relevant (explicit) knowledge.

Critical success factors: some maturity in the organisation; awareness about individual roles and responsibilities; a clear (communicated) business strategy; intranet development capacity and a content management system.

Training and development

Training and development (T&D) is indispensable in building individual and organisational capabilities to meet the organisation’s wider strategic objectives. Though training and learning are different activities, they are related closely enough for us to discuss formal T&D in the context of this work. T&D can be used to increase skill levels and to build competencies. In both cases it is important to take a systematic approach to assess business and individual needs.

Since the world of e-business is changing and evolving rapidly, it is essential that the skill levels of the members of the organisation are regularly updated. Distance learning offers enhanced possibilities surrounding the delivery of education and training, any place any time. It has been proven that CBT (computer-based training) can save a great deal of time and money.

Deliverables: skilled and competent people in a better position to fulfil their present and future tasks.

Critical success factors: availability of appropriate training programmes; understanding of T&D needs; competent learning designers.

Knowledge-enabled process analysis and design

Analysing business processes from a knowledge perspective can create a direct link with the operational environment. This means that opportunities for leveraging knowledge in and between current and future e-business processes need to be identified and practical knowledge instruments (FAQs, checklists, best practices, team debriefings, etc) applied. This approach facilitates the creation of embedded knowledge. Some of these activities might overlap with the creation of the knowledge map. It is not unusual, however, for this approach to spark the re-design of business processes or even their total deconstruction in order for learning opportunities to be incorporated. Sometimes, a link with business support tools (SFA, call centres, decision tools, etc) can be made, allowing even more pronounced learning capabilities.

Deliverables: a picture of where knowledge is used and generated in the business processes.

Critical success factors: process-oriented thinking; process maturity; ICT tools to capture knowledge and to link it to other activities.

Miscellaneous

There are various other instruments that can be applied to stimulate the creation, sharing and use of knowledge, although the relevance of their application is dependent on the organisational profile. The development of a knowledge repository is an example of a tool that supports a ‘stock’ approach to KM, in which knowledge/information is captured and made accessible for re-use. However, it is impossible to capture and codify all knowledge. This is especially true in the world of e-business, which is very dynamic. Expert meetings, communications equipment (video conferencing, mobile phones and so on), exchange programs, coaching, discussion forums, conferences and measures that stimulate direct inter-personal contact support the flow of knowledge, especially in organisations and e-business networks with community of practice characteristics.

Deliverables: the sharing and application of ideas and experiences.

Critical success factors: a stimulating and open-minded environment and organisational design; communication and discussion skills; smooth, working technology (eg, with high bandwidth).

Conclusions

The e-business arena is a dynamic, complex and demanding environment. It is essential to develop a consistent e-business strategy based on market developments, (ICT) technology, and an organisational context that supports individual and organisational competencies and capabilities. To develop and implement an e-business strategy, it is crucial to make optimal use of knowledge about e-business across the organisation and the network. (Re-)use of knowledge is probably the most effective way to stay in a strategically competitive position. In e-business, it is crucial to have a transparent and flexible organisation. External awareness is also important for creating a sense of urgency in those areas where it is most necessary.

Key areas for knowledge exchange are: projects (what is happening? who knows what? what did we learn? can we set standards?); customers (what do they want? how do they value our products and services? how can we team up?); technology (what is state-of-the-art? what standards have been set? who is the market leader? what are our experiences with implementation, and are we good at it?); and the environment (what are the current trends? where are the customer value drivers and how are they changing? what are our competitors doing? who might become new competitors?).

Knowledge-conscious management aims at the development and implementation of instruments that enhance organisational sensitivity to external and internal signals: from customers and the market as a whole, from within the organisation, and from partners and stakeholders. It also supports the building and internalisation of knowledge and organisational capabilities. The instruments we have outlined, when implemented, will help your organisation form new, or improved, e-business processes within a networking context. Appointing an overall facilitator will help with the development and implementation of three paths in parallel: organisational change and implementation; building and internalisation of individual and/or organisational knowledge; and the implementation of KM-processes with a focus on effectiveness, efficiency and flexibility.

References

1. In part one of this article, we refer to this exercise as ‘corporate profiling’. See also: De Bree, T., Transformation of Financial Services Companies in the Global Knowledge Economy: How to Map and Measure Customer Value Creation with Relationship Capital (2001. Visit www.go4estrategy.com)

2. See ibid

Paul Louis Iske is senior vice president and chief knowledge officer at ABN Amro. He is also a freelance consultant on strategic knowledge management issues. He can be contacted at: paul.iske@knocom.com

Tony de Bree is interim manager, e-business at ABN AMRO Trust, and commercial director of Go4estraetgy Consulting. He can be contacted at: tony.de.bree@go4estrategy.com (English) or tony.de.bree@go4estrategy.nl (Dutch).