UCCD3053

Knowledge Management
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CHAPTER 1 Overview of Knowledge Management

Overview

 Knowledge Management (KM) is a

young discipline for managing the
creation, collection and
dissemination of knowledge in
organizations.
 It typically involves forming
organizational structures and
systems to facilitate this process,
such as knowledge capture systems,
communities of practice, and online
knowledge repositories.
 Knowledge comprises the major
asset that drives strategic growth
 CHAPTER OBJECTIVES

 Describe what KM is and what the forces are that

drive KM.
 Discuss organizational issues related to KM.
 Explain knowledge management systems (KMS)
and their role in the organization.
 Discuss the relevance of KM in today’s dynamic
environments augmented with increasing
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 Present the benefits and considerations about
KM.
 Introduction

 Traditional Economy
 the main asset for a corporate was physical
assets
 Wealth and Value = Physical assets

 Knowledge Economy
 Driven by knowledge intangibles rather than
natural resources, capital or low skilled
labour
 Economic performance based on knowledge,
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technology and learning
 Mobilising knowledge to add value to goods
and services
 Wealth = Knowledge
 Introduction

 Knowledge Economy

 Knowledge added to products and services in

West and built in low wage economies.

 India & China developing highly educated

labour force.
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 Recent survey showed 80% of new corporate
R&D sites and personnel of top firms are in
India and China.
 Introduction

 KM started around the mid-1990s

 Knowledge seen as the most important source of

competitive advantage.

 Came from consultant beginnings.

Next  Some strongly into IT, some strongly into HR and

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some into strategy.

 Academic roots in organisational learning,

information systems, strategy and finance.
 Introduction

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 Introduction

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 What is KM?

 Knowledge Management is the process through

which organizations generate value from their
intellectual and knowledge-based assets.

 At the personal level, it means knowing what

you need to know, how to find out, how to
make good use of the information and how
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to share what you know with others
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 At the organizational level, knowledge
management is defined as the process of
creating, capturing and using knowledge to
enhance organizational performance
 What is KM?

 KM is a process that helps organizations identify,

select, organize, disseminate, and transfer
important information and expertise that are part
of the organization’s memory.

 KM is the process of systematically and actively

managing and leveraging stores of knowledge in
an organization

 Systematic and active management of ideas,

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information, and knowledge residing within
organization’s employees

 Knowledge management systems

 Use of technologies to manage knowledge
 Used with turnover, change, downsizing
 Provide consistent levels of service
 What is KM?

 Knowledge management (KM) may simply be

defined as doing what is needed to get the most
out of knowledge resources.

 In general, KM focuses on organizing and making

available important knowledge, wherever and
whenever it is needed.

 KM is also related to the concept of intellectual

capital.
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 Defining KM

 Key Questions an organization must consider:

 Does your company know what you know?

 Do you know what you know?
 How do you make best use of the knowledge
you have?
 This means thinking “out-of-the box”

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 Why KM?

 Market places are increasingly competitive and

the rate of innovation is rising.

 Reductions in staffing create a need to replace

formal knowledge with formal methods.

 The amount of time available to experience and

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acquire knowledge has diminished.
 Why KM?

 Market places are increasingly competitive and

the rate of innovation is rising.

 Reductions in staffing create a need to replace

formal knowledge with formal methods.

 The amount of time available to experience and

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acquire knowledge has diminished.
 Why KM?

 Early retirements and increasing mobility of the

work force the lead to loss of knowledge.

 There is a need to manage increasing complexity

as small operating companies are transnational
sourcing operations.

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 Changes in strategic direction may result in the
loss of knowledge in a specific area.
 Intellectual Capital:
Human Vs. Structural Capital

 Human capital
(Attitude, competencies, education, knowledge,
skills)

 The knowledge, skills and competencies of

the people in the organization.

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 Human capital is owned by employees and
managers that possess it.

 Without a KM system in place, when

employees and managers leave the company,
they take their skills, competencies and
knowledge with them.
 Intellectual Capital:
Human Vs. Structural Capital

 Structural capital
(Copyright, corporate culture, design rights,
financial relations, IT infrastructure, management
processes, service marks, trade secrets, trade
marks)

 The process, structures, information systems,

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and intellectual properties that are
independent of employees and managers.
 Everything that remains after the employees
go home.
 Copyrights, customer files, business process
software, databases, software manuals,
trademarks, organizational structures.
 Intellectual Capital

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 Consumer Capital

 The value of the organization’s relationships with

its customers, including customer loyalty,
distribution channels, brands, licensing, and
franchises.

 Because customers often form bonds with a

salesperson or customer representative,
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customer capital typically is jointly owned by
employee and employer.

 The proportion of customer capital held by

employees and employers depends on the
relative contribution of customer loyalty to
customer capital.
 The New Capital Asset

Competitive Advantage

Innovation

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Knowledge
 Data, Information, Knowledge Capital

 In general, there are three levels of refinement to

the item related to knowledge which are the
data, information and knowledge

Data Information Knowledge

A set of A message meant to Experiences,
discrete facts change the receiver’s values, insights
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page perception and contextual
information
Facts and Data vested with Justified, true
messages meaning beliefs
Simple Data with relevance Valuable
observations and purpose information from
the human mind
 Data

 Data comprises facts, observations, or

perceptions.

 Data represents raw numbers or assertions.

 Data: lots of zeros and ones.

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 Data are numbers. They are numerical quantities,
or other attributes derived from observation,
experiment or calculation.
 Data

 Data
 refers to isolated facts such as individual
measurements.

 No meaning on their own

 Do not signify anything

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 Useless unless placed in some sort of context

 Examples: 10,1.6,ahmad,kamil, green, etc

 Information

 Information is processed data.

 Information is a subset of data, only including
those data that possess context, relevance and
purpose.
 In contrast, data can include millions of
useless garbage bits, which are nothing more
than uninterpretable zeros and ones.
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 Examples: 10,1.6,ahmad,kamil, green, etc.

 Information involves manipulation of raw data.

 Often, information can be used to obtain a
more meaningful indication of trends or
patterns.
 Information

 Transmission of information
Hard Network Soft Network
 Has a visible and definite  Less formal and visible
infrastructure  Someone’s handing a note or
E.g. wires, delivery vans, a copy of an article marked
satellite dishes, post offices, ‘FYI’ is an example of
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page electronic mail boxes. The information transmission via
messages these networks soft network
deliver include email,
traditional ‘snail-mail’,
delivery
service packages, and
Internet transmissions
 Knowledge

 Knowledge
 Consists of symbols, the relationships
between them and rules or procedures for
manipulating them
 Adds context to the information, providing
greater meaning and therefore much greater
use and value
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 Dynamic and changes with time
 Examples: If the temperature is 10ºC it feels
cold
 Data, Information, Knowledge

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 Types of Knowledge

 Explicit

 Explicit knowledge is that component of

knowledge that can be codified and
transmitted in a systematic and formal
language: documents, databases, webs, e-
mails, charts, etc.
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 Explicit knowledge is that which is easily
expressed; it can be transferred to others in a
relatively straightforward manner.
 Types of Knowledge

 Tacit

 For tacit knowledge, it is personal, context-

specific knowledge that is difficult to
formalize, record, or articulate; it is stored in
the heads of people.

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 Tacit knowledge is difficult to articulate and
express to others. Tacit knowledge is not
available as a text.

 It involves intangible factors embedded in

personal beliefs, experiences, and values
 Types of Knowledge: Explicit and Tacit

Tacit Knowledge Explicit Knowledge

• Subjective  Formal and systematic
• Knowledge of experience,  Knowledge of rationality (mind)
insight, intuition  Expressed in words and numbers
• Not easily expressible  Easy to communicate
• Highly personal  In the form of data
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• Hard to formalize  Rules
page • Difficult to communicate  Universal principles of procedure
• Ideas  Data set
• Emotions  Formula
• Values  Principles
Context-specific
•
 From Data to Information

 Data becomes information when we add value in

various ways
 Several important methods

Contextualized We know for what purpose the data

was gathered
Categorized We know the units of analysis or key
components of the data
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Calculated The data may have been analyzed
mathematically or statistically
Corrected Errors have been removed from the
data
Condensed The data may have been summarized
in a more concise form
 From Information to Knowledge

 If information is to become knowledge, humans

must do virtually all the work. The transformation
happens through

 These knowledge-creating activities take place

within and between humans

Comparison How does information about this

situation compare to other situations
we have known?
Next Consequences What implications does the
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information have for decisions and
actions?
Connections How does this bit of knowledge
relate to others?
Conversation What do other people think about
this information?
 Example

 Data.
 Patient Temperature: 102° F; Pulse: 109 beats
per minute; Age: 75.

 Information.
 “Fever” is a temperature greater than 100° F;
“tachycardia” is a pulse greater than 100
beats per minute; “elderly” is someone with
an age greater than 75.
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page  Knowledge.
 The patient probably has a serious case of the
flu.

 Instrumental understanding.
 The patient should be admitted to the
hospital ASAP and treated for the flu.
 Data, Information & Knowledge

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 Organizational Learning

 Learning organization
 Ability to learn from past
 To improve, organization must learn
 Issues
 Meaning, management, measurement
 Activities
 Problem-solving, experimentation,
learning from past, learning from
acknowledged best practices, transfer of
knowledge within organization
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page  Must have organizational memory, way to
save and share it
 Organizational learning
 Develop new knowledge
 Corporate memory critical
 Organizational culture
 Pattern of shared basic assumptions
 Knowledge-based Economy

 Rapid changes in the business environment

cannot be handled in traditional ways.

 Firms are much larger, with higher turnover

and require better tools for collaboration,
communication, and knowledge sharing.

 Firms must develop strategies to sustain

competitive advantage by leveraging their
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page intellectual assets for optimum performance.

 Managing knowledge is now critical for firms

spread out over wide geographical areas, and for
virtual organizations.
 KM in Organization

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 Factors triggered interest in KM

 The pace of change has accelerated dramatically

during the past decade.

 Globalization and geographic dispersion changed

the organization‘s scope.

 Downsizing and reengineering resulted in staff

attrition and knowledge drain.
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 Networking and data communications
enhancement.

 The increasing dominance of knowledge as a

basis for improving efficiency and effectiveness.
 KM Benefits

 Reduction in loss of intellectual capital when

people leave the company

 Reduction in costs by decreasing the number of

times the company must repeatedly solve the
same problem

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 Economies of scale in obtaining information from
external providers

 Reduction in redundancy of knowledge-based

activities
 KM Benefits

 Increase in productivity by making knowledge

available more quickly & easily

 Increase in employee satisfaction by enabling

greater personal development and
empowerment
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 Strategic competitive advantage in the
marketplace
 Technologies to Appropriate KM

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 Technologies to Appropriate KM

 Technologies Often Included in Knowledge

Management:
 Intranets (Knowledge Portals)
 Information Retrieval Engines
 Help-Desk Applications
 Data Warehousing
 Notice Board
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 Expert Database
 Groupware and Workflow Systems
 Technologies to Appropriate KM

 The KMS challenge is to identify and integrate the

following THREE (3) technologies:

 Communication technologies allow users to

access needed knowledge, and to
communicate with each other--especially
with experts.
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 Collaboration technologies provide the
means to perform group work.

 Storage technologies use a database

management system to capture, store and
manage knowledge.
 Knowledge Repositories

 Specially Structured Databases. Some systems

have been developed in Lotus Notes/Domino
Server and hence utilize the Notes database
structure.
 These specialized databases are ideal for
storing tacit knowledge because of its nature.
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 Electronic Documents. Others have been
developed around electronic document
management systems.
 e.g., DocuShare by Xerox
 KM Systems

 Knowledge Management mechanisms are

organizational or structural means used to
promote KM.

 The application resulting from such synergy

between the latest technologies and
social/structural mechanisms as Knowledge
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Management Systems.

 KM systems utilize a variety of KM mechanisms

and technologies to support the KM processes.
 KM Systems

 Based on observations on the KM systems

implementations under way at many
organizations, a framework emerges for
classification of KM systems as:

 Knowledge discovery systems

 Knowledge capture systems
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 Knowledge sharing systems
 Knowledge application systems
 Knowledge Sharing

 Some people are reluctant to share knowledge

due to the following reasons:

 No skill in knowledge management

techniques.
 Willing to share, but not enough time to do
so.
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 Don’t understand knowledge management
and benefits.
 Lack of appropriate technology.
 No commitment from senior managers.
 No funding for knowledge management.
 Culture does not encourage knowledge
sharing.
 Factors Leading to Success and Failure
of Systems

 Success
 Companies must assess need
 System needs technical and organizational
infrastructure to build on
 System must have economic value to
organization
 Senior management support
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 Organization needs multiple channels for
knowledge transfer
 Appropriate organizational culture
 Factors Leading to Success and Failure
of Systems

 Failure
 System does not meet organization’s needs
 Lack of commitment
 No incentive to use system
 Lack of integration

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 Approaches in Knowledge Management

 Process Approach
 Codifies knowledge
 Formalized controls, approaches,
technologies
 Fails to capture most tacit knowledge

 Practice Approach
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 Assumes that most knowledge is tacit
 Informal systems
 Social events, communities of
practice, person-to-person contacts
 Challenge to make tacit knowledge
explicit, capture it, add to it, transfer it
 Approaches in Knowledge Management

 Hybrid Approach
 Practice approach initially used to store
explicit knowledge
 Tacit knowledge primarily stored as contact
information
 Best practices captured and managed
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 Best practices
 Methods that effective organizations use to
operate and manage functions

 Knowledge repository
 Place for capture and storage of knowledge
 Different storage mechanisms depending
upon data captured
 Roots of Modern Day Knowledge
Management

 Organisational learning

 Psychology

 Information systems

 Strategic management
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 Culture
 Conclusion

 KM is about people. It is directly linked to what

people know, and how what they know can
support business and organizational objectives. It
draws on human competency, intuition, ideas,
and motivations. It is not a technology-based
concept. Although technology can support a KM
effort, it shouldn’t begin there.

 KM is orderly and goal-directed. It is inextricably

tied to the strategic objectives of the
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organization. It uses only the information that is
the most meaningful, practical, and purposeful.

 KM is ever-changing. There is no such thing as an

immutable law in KM. Knowledge is constantly
tested, updated, revised, and sometimes even
"obsolete" when it is no longer practicable. It is a
fluid, ongoing process.
 Conclusion

 KM is value-added. It draws upon pooled

expertise, relationships, and alliances.
Organizations can further the two-way exchange
of ideas by bringing in experts from the field to
advise or educate managers on recent trends and
developments. Forums, councils, and boards can
be instrumental in creating common ground and
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organizational cohesiveness.

 KM is visionary. This vision is expressed in

strategic business terms rather than technical
terms, and in a manner that generates
enthusiasm, buy-in, and motivates managers to
work together toward reaching common goals.
THANK YOU
Next Lecture
Chapter 2 - Impact of Knowledge Management