W H I T E P A P E R

WHAT IS
KNOWLEDGE MANAGEMENT?
 C O N T E N T S

Table of Contents

WHAT IS KNOWLEDGE MANAGEMENT? 2

Several approaches have emerged 2

Many fields contribute 2

WHY DO YOU NEED KNOWLEDGE MANAGEMENT? 3

Do intellectual assets lie dormant? 3

Is corporate knowledge highly

dependent upon individuals? 3

Does your company continually reinvent the wheel? 4

WHO IS INVOLVED IN KNOWLEDGE MANAGEMENT? 4

HOW DO YOU IMPLEMENT KNOWLEDGE MANAGEMENT? 4

Build the infrastructure using appropriate technology 4

Build a conceptual infrastructure with

competencies as the backbone 5

Create a repository of reusable

components and other resources 5

Set high standards for quality and usability 6

RESEARCH QUOTED 7

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WHAT IS KNOWLEDGE MANAGEMENT?
In knowledge-based industries, especially within the service sector, a companys
primary assets are intellectual. Such organizations are more dependent upon ideas,
concepts, and expertise than traditional capital assets: manufacturing plants, trucks,
warehouses, or machinery. Jaime del Rosario defines knowledge-based assets, or
intellectual capital, as, ``the sum total and accumulated value of the firms shareable
knowledge and expertise. Note that for knowledge to become intellectual capital, it
must be shared. As Thomas Stewart observes, Intelligence becomes an asset when
useful order is created out of free floating brain power . . . when it is captured in a way
that allows it to be be described, shared, and exploited. Then results can be achieved
beyond what was possible when the information was scattered. James Brian Quinn
notes in Harvard Business Review, ``Information sharing is critical because intellectual
assets, unlike physical assets, increase in value with use . . . Knowledge and intellect
grow exponentially when shared.

Several approaches have emerged

Four emerging approaches to knowledge management are: 1) the repository model,
the most common approach, focuses on managing documents and reusing knowledge
in tangible forms, 2) the communities of practice approach which builds expertise
within affinity groups by encouraging dialogue between experts, surfacing less-
tangible knowledge through interpersonal interaction, e.g. brainstorming sessions and,
3) the continuous learning approach which enhances an individuals ability to acquire
information and use it for problem solving and decision making. Morten Hansen, in
Harvard Business Review observes that the repository model, or codification strategy,
is more appropriate for companies that encounter similar problems over and over and
respond with repeatable solutions. In addition, the communities of practice approach,
or personalization model, is appropriate if corporate knowledge cannot be
systematized because problems are complex and each solution put forth is unique and
highly customized. A fourth approach, business intelligence, gathers valuable
information by mining enterprise-wide databases.

Many fields contribute

Knowledge management synthesizes ideas converging from many different
disciplines. Understanding the legal aspects of intellectual capital requires
specialization in intellectual property law: copyright, patents, and trademarks.
Cognitive scientists focus on cognitive processes not only at the individual level, but

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also within groups. Organizational learning and adult learning theorists understand
the role of knowledge within a corporation. Technology supporting knowledge
management is related to management information systems. Understanding the flow
of knowledge within an organization requires expertise in disciplines such as business
process analysis or systems theory. Information science provides insight into systems
for information access and retrieval.

WHY DO YOU NEED KNOWLEDGE MANAGEMENT?

The following questions can help companies determine if they are a candidate for
knowledge sharing.

Do intellectual assets lie dormant?

Assets lie dormant if information is hard to find and isnt leveraged to meet
customers needs. Jane Bird states the irony, ``The more information we have access to,
the harder it becomes to pick out what is useful and relevant. Companies accumulate
enormous assets over the years that are untapped or dispersed. Information stored in
archives is useless if it is not available as raw material for making decisions, improving
quality, or enhancing productivity.

Is corporate knowledge highly dependent upon individuals?

Expertise often lies in only a few individuals heads and their expertise is not always
easily accessible. Experts are busy. Newly hired individuals may not know who experts
are. Companies can be temporarily crippled if key experts die, retire or resign.
Valuable knowledge is in their minds and when they leave they take their minds with
them. Knowledge sharing takes an experts tacit knowledge and makes it explicit.

Does your company continually reinvent the wheel?

Even a highly motivated work force may not be working in a connected way. The
``left hand may not know what the ``right hand is doing. If initiatives are not
connected, a company may actually encourage mental fragmentation not only at the
corporate level, but also for individuals. George Land, futurist and author of Grow or
Die, recognized that innovating organizations, ``operate by taking the old, opening it
up for examination, redefining and combining it with the new. They mature as they
move from fragmentation to integration.

3 What Is Knowledge Management?

 If you answered yes to the questions above, you are a candidate for knowledge
sharing; you need to pool your intelligence, to leverage your intellectual assets. If you
dont, the impact can be significant. Higher costs, longer production times, and lower
quality could cause you to lose your competitive edge. Sales may miss opportunities
if they dont have access to successful proposals. Morale may suffer and turnover may
increase without continuous learning. Ultimately customer retention can also suffer if
your competition makes more improvements based upon best practices.

WHO IS INVOLVED IN KNOWLEDGE MANAGEMENT?

Knowledge management literature is replete with new terms and jargon. This is
especially evident in the titles describing those who create and those who use
knowledge: Chief Learning Officers (CLO), Chief Knowledge Officers (CKO),
knowledge managers, knowledge initiative managers, knowledge management experts,
knowledge transfer experts, knowledge engineers, knowledge foot soldiers
(non-management), cybrarians and information brokers, to name a few. While some of
these titles may seem awkward or even humorous, they reflect a burgeoning reality
that dedicated roles are emerging in mid- and upper-level management, in technical
fields and in operations.
These are individual roles. But, knowledge management is not a person, as much as
it is a processan approach to business. It can change the way departments, divisions,
indeed entire corporations, do business.

HOW DO YOU IMPLEMENT KNOWLEDGE MANAGEMENT?

For companies that need to leverage their corporate knowledge, the following
four initiatives may help you establish a knowledge sharing system of your own.
These initiatives draw upon the predominate, repository model but are relevant to
other models.

Build the infrastructure using appropriate technology

Technology enables connectedness to take place in ways that have never before been
possible. Harnessing intellectual capital can be expedited through a network
computing infrastructure. Technology has emerged that supports each different
approach to knowledge management (Table 1). Document management systems
expedite document storage and retrieval. Web-casts allows synchronous
communication between experts while discussion groups enable asynchronous
interaction. Learning management systems track an employees progress with
continuous learning. Data warehousing mines powerful SQL databases which
organize and analyze highly structured information.

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Table 1. Technology Appropriate to Knowledge Management Approach

REPOSITORY COMMUNITIES OF CONTINUOUS BUSINESS

MODEL PRACTICE LEARNING INTELLIGENCE
Internet, HTML, XML Web conferencing Learning Databases
Full text Threaded management systems
Data Mining Tools
search engines discussion groups Electronic
Enterprise Databases
Document Automated workflow performance support
systems (EPSS) Decision Support Tools
management systems
Expert Directories
Performance
management

Build a conceptual infrastructure with competencies as the backbone

Technology is important in harnessing intellectual assets, but integrated solutions
encompass more than that. You must rethink the conceptual infrastructure of your
business. For example, you may need to: ensure intellectual assets reflect your vision
and values; articulate the theoretical framework for your processes; establish a
taxonomy or categorization scheme to organize your information; create cross
references that reflect relationships between entries; or index your information using
attributes or metatags.
The notion of competence plays a critical role in knowledge indexing and sharing.
Karl Erik Sveiby, noted Swedish expert on managing and measuring knowledge-based
assets, observes, ``The concept of competence, which embraces factual knowledge,
skills, experience, value judgments and social networks, is the best way to describe
knowledge in the business context. Once competencies or target proficiencies are
defined, they become the backbone which connects users to useful knowledge.

Create a repository of reusable components and other resources

Before the Industrial Revolution, products were hand-crafted, each piece was unique
and couldnt be reused. The genius of the Industrial Revolution centered on making
reusable parts - components became standardized and interchangeable. The
Information Revolution is similar. Instead of crafting a unique solution each time,
knowledge sharing creates a warehouse of ``stored parts - standardized and
interchangeable components which can be reused and adapted: skills, best practices,
models and frameworks, approaches and techniques, tools, concepts, specific
experiences, presentation aids, white papers, etc. Adding to this, resources such as
directories of experts indexed by their field can help you gain access to knowledge
outside of your core competencies.

5 What Is Knowledge Management?

Set high standards for quality and usability
Ensure your information complies with high quality standards - it is the foundation
upon which you build your business. Also, making sure the system meets users needs
may involve rework or restructuring information. Leonard Caldwell observed:
``Critical information must first be reorganized so that information is presented in a
way that mirrors users needs and parallels a thought process occurring within a job
function or task. Establishing consistent patterns helps end-users find information
quickly. Online coaching can provide users with tips and techniques on how to modify,
customize, or tailor information.
Leveraging organizational knowledge is not an option, it is an imperative if you are
to flourish in the marketplace. It can lead you into a new phase of quality and
innovation. It will reduce your cycle time and give you a competitive advantage as a
company. The synergy will contribute to your growth as individuals. Companies who
have the foresight to manage their knowledge capital now will have an advantage in
the future. As James Brian Quinn summarizes in the Harvard Business Review, ``Once
a company gains a knowledge-based competitive edge, it becomes ever easier for it to
maintain its lead and ever harder for its competitors to catch up ..

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 R E S E A R C H

Research

Caldwell, Leonard A. and Andrew C. Zolper.

Coaching systems: Rx for a wholesale change. American Banker. 21 February 1996.

Hansen, Morten T., Nitin Nohria, and Thomas Tierney.

Whats your strategy for managing knowledge? Harvard Business Review. [http://www.hbsp.har-
vard.edu/products/hbr/marapr99/99206.html]. March-April 1999.

Land, George.
New rules for growth and change. In Leader Manager, ed. John N. Williamson. New York: John
Wiley and Sons, 1986.

Murray, Philip C.
New language for new leverage: The terminology of knowledge management. KM Metazine.
[http://www.ktic.com/ topic6/13_TERM4.htm]. Knowledge Transfer International, May 1999

Quinn, James Brian, Philip Anderson, and Sydney Finkelstein,

Managing professional intellect: Making the most of the best. In Harvard Business Review on knowl-
edge management. Harvard Business Review Series. Boston: Harvard Business School Press, 1998

Rosario, Jaime G. del.

Much ado about knowledge capital. Business World (Philippines). 10 January 1996

Sveiby, Karl Erik, The new organizational wealth, Barrett-Koehler

Publishers, Inc. San Francisco, 1997

Sun Microsystems, Inc. 7

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