MIS 435 Knowledge Management

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MIS 435Knowledge Management

• Chapter 8
• Step 4 Knowledge Audit and Analysis

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In This Chapter

• Understand the purpose of a knowledge audit
• Use Bohns stages of knowledge growth to measure
  knowledge
• Identify, evaluate, and rate critical process
  knowledge
• Select an audit method
• Form a preliminary knowledge audit team
• Audit and analyze your companys existing
  knowledge
• Identify your companys knowledge niches
• Choose a strategic position for your knowledge
  management system

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Hindsight Insight Foresight

• In Knowledge Management Audit, you must look at
  existing intangible assets.
• The goal is to invest in areas with most
  potential for future strategic advantage.

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Why Audit Knowledge?

• Devising a knowledge-based strategy
• Architecting a knowledge management blueprint or
  road map
• Planning to build a knowledge management system
• Planning research and development
• Seeking to leverage its people assets

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Why Audit Knowledge Continued

• Seeking to leverage what it already knows
• Trying to figure a way out of corporate ebbing
  such as competitive failure, earning shortfalls,
  or financial overturns
• Attempting to asses the value of the enterprise
  as a whole

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Why Audit Knowledge Continued

• Seeking to provide a focus for company-wide
  learning and education.
• Striving to strengthen its own competitive
  weaknesses.
• Facing competition from knowledge-intensive
  competitors that are far ahead on the learning
  curve.
• Looking for direction for market entry or exit
  strategy.

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7 Key Steps of the Knowledge Audit Analysis
Process
1) Define Goals of the Knowledge Audit 2)
Identify Financial Other Constraints 3)
Determine the Ideal State 4) Select Audit
Method 5) Select Aspects of the Audit 6) Perform
Audit 7) Document Knowledge Assets
Tiwana, Fig. 8-1
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Figure 8-1
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Bohns Knowledge Growth Framework
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Measuring Knowledge Growth Bohns Stages of
Knowledge Growth

• Bohns Stages of Knowledge Growth
• Provides an excellent starting point for figuring
  out where you stand, relatively, in terms of your
  firms knowledge
• Applies to all types of knowledge-intensive
  industries (i.e. consulting, software, and
  publishing)
• Gives a fair idea of how strong the need for KM
  in your firm

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Bohns Stages of Knowledge Growth

• Bohns stages of knowledge growth framework is
  only a starting point to measure knowledge.
• To effectively manage its knowledge, your company
  must progress to stage 5, 6, or 7
• Bohns framework was adapted from and primarily
  built upon academic research and literature and
  applies strictly to the type of knowledge used to
  produce goods and services

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Bohns Stages of Knowledge Growth
Tiwana, Tbl. 8-1
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Table 8-2Ranking Characteristics of Knowledge
Work and Processes along Each Stage and the
Effects of Each Stage on Them
Tiwana, Tbl. 8-2
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Measuring Knowledge Growth

• Your companys initial standing
• Your competitors standing
• Your companys progress along this scale
• Steps and directions to move your company up on
  this scale.

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Measuring Knowledge Growth

• Level of knowledge
• Determines Process automation and control
• Plan the primary tasks of knowledge workers to
  deliver maximum results

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Stages of Knowledge Growth

• Stage Zero
• Total ignorance
• Cannot tell the good state from the bad
• Undefined location of knowledge
• Undefined work processes
• Undefined learning method

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Stages of Knowledge Growth

• Stage One
• Pure art knowledge stage
• Pure art knowledge characteristic
• In the experts head so tacit that it can not
  even be articulated.
• Work processes rely on trial and error
• Keep repeating processes. Hope for some patterns
  to emerge.

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Stages of Knowledge Growth

• Stage Two
• Awareness stage
• List of possibly relevant variables exists
• In the experts head (tacit) the expert can
  express it in words, diagrams, etc., in a very
  limited way
• Experts dictate conditions for processes to work
  well. Some degree of randomness previous methods
  that worked well.
• Experts keep repeating processes. Hope for some
  patterns to emerge.

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Stages of Knowledge Growth

• Stage Three
• Measure stage
• Pretechnological knowledge characteristic
• Decide more important variables by noting their
  correlation with desirable outputs.
• Patterns begin to emerge. Experts differ in their
  opinions about success.
• Can be more creative and tweak processes to see
  changes.

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Stages of Knowledge Growth

• Stage Four
• Control of the mean stage
• Scientific method is feasible
• Written and embodied in hardware/software to some
  extent
• Some parts of knowledge can be explicated,
  codified and written down
• Keep good records of what was done, what happened
  and the final outcomes

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Stages of Knowledge Growth

• Stage Five
• Process capability stage
• Local repeatable recipe
• Recipe based on experience often works. Might or
  might not be formally written down in its
  entirety.
• A semi-reliable recipe emerges. Random or
  inconsistent steps
• Determine statistic patterns that work.

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Stages of Knowledge Growth

• Stage Six
• Process characterization stage
• Tradeoffs to reduce costs a well developed
  recipe. Limited knowledge of handling
  contingencies exists.
• Knowledge is well documented in the recipe a
  well developed methodology. Applying the process
  is a mechanical task.

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Stages of Knowledge Growth

• Stage Six (Cont.)
• Very mechanized work processes. Highly automated
  uses time proven methodology.
• Use the proven methodology continuous
  application will allow weaknesses and problems in
  the recipe to emerge.

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Stages of Knowledge Growth

• Stage Seven
• Know why stage.
• Science automation is possible a formal or
  informal quantitative model is developed.
• Relevant knowledge is documented tacit knowledge
  converted to explicit almost all knowledge can
  be codified and built into software dealing with
  knowledge contingencies.

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Stages of Knowledge Growth

• Step Seven (Cont.)
• Work processes codified in computer software and
  process manuals.
• This is as good as it gets!

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Stages of Knowledge Growth

• Stage Eight
• Complete Knowledge Stage
• Nirvana
• Location of knowledge rarely possible
• Knowledge becomes a natural part of the group or
  firm unlikely to ever be achieved
• Occasional variations resulting in inability to
  apply processes push it back to stage seven.

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The Road From Art to Science

• Most Companies are at stage 2 or 3.
• To manage knowledge effectively a company must
  progress to stage 5, 6, 7.
• Stage 8 is extremely difficult to reach.

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Making Coffee A Knowledge-Based Example
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Making Coffee

• The coffee brewing example effectively
  demonstrates how processes move from being highly
  tacit to highly methodological.
• The coffee brewing example is a metaphor for
  understanding the eight stages of process
  knowledge growth and helps to identify what stage
  your processes are at.

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Making Coffee A knowledge based example

• Stage Zero Total ignorance
• Do not know the difference between good and bad
  coffee.
• Stage one (Pure Art) You can tell good from bad
  coffee.

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Making Coffee (Cont.)

• Stage Two (Awareness) You have created a list of
  variables
• Strengths
• Temperature
• Bitterness
• Viscosity (increases as coffee sits for a few
  min)
• Other taste variables

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Making Coffee (Cont.)

• Stage Three (Measure) You can determine the
  significance of variables
• Important
• Marginally important
• Unimportant
  
  
  

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Making CoffeeYou also realize that there are
certain background controls, such as

• The amount of coffee added
• Temperature setting on the coffee percolator
• How long you let it sit after it percolates
• Weight of coffee/volume of water
• Order you added coffee and water (immaterial)
• Fineness to which coffee beans were grounded
• Elapsed time since coffee beans were roasted
• Elapsed time since coffee were ground
• Other control variables

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Making Coffee (Cont.)

• Stage Four (Control of the mean) You can now
  measure Variables
• Can not measure the more qualitative factors
• Difficult-to-measure factors can be correlated
  with other measurable factors.

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Stage 4 You can now measure variables

• The weight to coffee to be added
• The volume of water to be added
• Initial percolator temperature settings
• Percolation temperature
• Post-percolation temperature
• Temperature at time coffee is served
• Elapsed time since beans were roasted
• Elapsed time since beans were ground

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Making Coffee (Cont.)

• Stage Five (Process capability) Repeatable
  methodology or recipe
• Develop a recipe or methodology
• Follow steps with a reasonable expectation of
  success
• Components of the recipe are known

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Stage 6 Repeatable Methodology Localized
Adaptability

• This is a slight improvement over stage 5 since
  now you can adapt the recipe in a way that
  compensates for different types or flavors of
  coffee.
• You have a methodology and a limited degree of
  adaptability to compensate for variations within
  the time-proven recipe approach that you are
  using

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Making Coffee (Cont.)

• Stage Seven (Know-why) A formal or informal
  model
• A formula approach to carrying out your process.
• The model need not to be quantitative.
• Can be qualitative, partially empirical, or
  semiformal.

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Making Coffee (Cont.)

• Stage eight (Complete Knowledge)
• We can never know when we are there.
• We need to be able to predict and compensate for
  the effects of disruptions and know what to
  measure in advance.
• Build unlearning capabilities into your
  knowledge management system.

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Knowledge ManagementWhat is Organizational
Knowledge?

• Organizational Memory
• Organizations remember the past through their
  policies and procedures
• Organizational memory is contained in
• Employees minds
• Documents and systems that employees have created
• Organizational Learning
• Development of new knowledge and insights that
  have the potential to influence an organizations
  behavior

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Knowledge ManagementImportant Questions for
Managers

• Given all of the time, effort, and expense that
  organizations have incurred to create knowledge
  artifacts
• what have organizations typically done with the
  knowledge produced?
• what may be done in the future with the
  knowledge?
• Who creates knowledge in an organization?
• How can individual managers manage knowledge?
• How can organizations manage knowledge?

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Knowledge Audit
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In the KM audit, you must look at

• All the intangible assets and knowledge assets
  that exists in your company its rituals,
  processes, structure, communities, and people
• Then you must document their existence, explicate
  their current state, and maybe put a dollar
  figure on what their value may be
• This audit should be a continuous process

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Knowledge ManagementWhy audit knowledge?

• Knowledge of knowledge assets is a rich source of
  information about where the strengths of your
  company lie. It is invaluable when your company
  is
• Devising a knowledge-based strategy
• Architecting a KM blueprint
• Planning to build a company-wide KM system
• Seeking to leverage what it already knows for
  market entry or exit
• Trying to figure a way our of corporate ebbing
• Striving to strengthen its own competitive
  weaknesses
• Facing competition from knowledge-intensive
  competitors that are far ahead on the learning
  curve

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What will an audit evaluate?

• Provides a sound investigation into the company
  or organizations knowledge health
• It is fact-finding, analysis, interpretation, and
  reporting activity which includes a study of the
  companys information and knowledge polices, its
  knowledge structure and knowledge flow
• Serves to help to determine if the company knows
  what it knows and knows what it doesnt know
  about its existing knowledge state
• It also helps it to unearth what is should know
  to better leverage knowledge for business and
  competitive advantage
• Offers a detailed examination, review, assessment
  and evaluation of a companys knowledge
  abilities, its existing knowledge assets and
  resources, and of its knowledge management
  activities.
• build a knowledge-oriented organizational culture
• make knowledge management efforts pay off

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What will an audit evaluate?

• Investigates the perceptions of KM effectiveness
  by the knowledge people
• Helps to determine what knowledge is being
  managed and how well it is being managed
• Investigates and evaluates the companys
  information systems, it processes and its
  knowledge enabling technology

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Knowledge Audit and Analysis

• The Knowledge Audit
• (Step 4 in the 10-Step Knowledge Management Road
  Map)
• Describes what knowledge an organization has, who
  owns the knowledge, and how the knowledge flows
  through the enterprise
• A successful audit identifies
• intellectual assets of value to the company
• what information people need and where it is
  located
• whether an enterprise is socially/culturally
  ready for a KM solution

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Knowledge Audit and AnalysisThe series of steps
involved in the knowledge audit and analysis
process
Define Goals Of Knowledge Audit
Step 2 Determine The Idea State
Step 3 Select Audit Method
Step 1 Identify Constraints
Step 4 Select Aspects Of The Audit
Step 5 Perform The Audit
Step 6 Document Knowledge Assets
Select the Against Measure Data
Assign Desirably High Values Data
Selecting Audit Method
Begin The Audit
Act on Results
Knowledge Assets
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The Knowledge Management Process
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Knowledge ManagementState of the Industry

• The Devils Advocate If Knowledge Management
  is so great, why doesnt everyone use it?
• InformationWeek survey (early 2001)
• showed many executives are confused about KM
• cost of building/maintaining is extremely high
• benefits difficult to justify
• technologies are still only emerging in 2000
• lots of implementation problems
• What knowledge to include?
• Who owns the knowledge? (e.g. Professors own
  their papers)
• Who will extract the knowledge?
• Who will we allow to extract knowledge?
• How do we know the knowledge we create is
  actually KNOWLEDGE?

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Knowledge Management Process

• The knowledge management process elicits,
  transforms, and diffused knowledge throughout an
  enterprise so that it can be shared and reused

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Knowledge Management ProcessThe Basic Idea
Archived Approaches
Todays Problem
Problem Context Data Solution
Problem Context Data Solution
Similar
USE THESE
Differ
Problem Context Data Solution
IGNORE
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Knowledge Management Process

• KM Steps
• Create knowledge
• Capture knowledge
• Refine knowledge
• Store knowledge
• Manage knowledge
• Disseminate knowledge

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Knowledge Management ProcessCapture and Refine
Knowledge

• Capture
• Knowledge must be identified as being valuable to
  the organization
• Knowledge must then be represented in a way that
  can be handled by the KM system
• Refine
• Wade through the potential knowledge
• Winnow out the wheat from the chaff

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Knowledge Audit Team
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The Knowledge Audit Team

• A multidisciplinary group of people that truly
  represents your company
• Using IT staff in not an option

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The Audit Team

• Needs representatives from at least the following
  cross-functional areas
• Corporate strategist
• Senior management, visionary, long-term planner
  or evangelist
• Financier
• Human resource manager
• Marketer
• Information technologist or IS/IT expert
• Knowledge manager, CKO, or knowledge analyst

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The Knowledge Audit Team

• Figure 8-2

Knowledge Evangelist

• Corporate Strategy

• Knowledge Manager
• Finance
• Knowledge Analyst

• Marketing

• Information Systems

Human Resources
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Knowledge Audit Team

• Pointers
• Anticipate some discord and differences of
  opinion due to the different backgrounds of
  participants
• Remember that as these differences are resolved,
  the different background of participants will
  turn out to be the biggest strength of the audit
  team.

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Designing Knowledge Audit Team

• The team must be a representation of the company.
• The team should be a multidisciplinary group of
  people.
• Goal Receive different viewpoints of the current
  situation. To gain a broader understanding of the
  situation.

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Planning the KM Audit

• Decision of the audit rationale
• The members decide the motives and reasons for
  the audit.
• Highly subjective and firm specific
• Needs to be written in clear and explicit terms
• Identify performance levels of operation
• Optimal level of performance
• The highest achievable level that each of the
  companys knowledge assets should operate.

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Conducting the Knowledge Audit

• Six Steps to the KM Audit
• Define the goals
• Determine the ideal state.
• Select the audit method
• Document existing knowledge assets
• Track knowledge growth over time

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First Step Defining the Goals

• Defining goals of Audit process
• The goals should be as specific as possible
• The audit should have a specific focus
• Point of the audit could be lost
• Financial and Performance not only goals!

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Defining Goals (Cont.)Constraint Based Pruning

• Next step after clear identification of goals.
• Need to know constraints ( i.e. financial, time,
  personnel)
• Goal To narrow the focus of your efforts
• Note Every company is different !

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Determining the Ideal State

• Second Stage of Knowledge Audit (KA)
• Where do you want to be?
• Base on Bohns Stages 0 - 8
• KA Team-based Decision
• Determine best-case scenario for organization to
  reach
• Choose goals that can be reached but make them a
  stretch
• Selected Goal - benchmark for KM process

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Best-Case Scenario Analysis

• Best Case must be
• Relevant to business
• Fixed
• Measurable
• Select optimum measure that is difficult to
  achieve

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Benchmark Example
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Measuring Knowledge Assets
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Selecting the Audit Method

• Tiwana
• Method used determines degree of accuracy in
  gauging pre-KM state
• Helps select
• Processes that need reinforcement
• Processes that need capitalization
• Must account for at least three critical
  intangible assets
• Employee know-how
• Reputation (including goodwill and brand equity)
• Organizational culture

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Additional Audit Methods

• Audit Core Competencies
• Audit Individual/Spectrum of Items
• These methods are not in the book!

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Documenting Knowledge Assets

• Essential to document knowledge-based assets
• Use a consistent framework
• Provides comparison to previous measurements
• Allows tracking and comparison of competitors
  measurements

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Capability Framework

• Use to Position Knowledge-Related Assets
• Builds on Ranking Characteristics of Knowledge
  Work Processes
• Table 8-2

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Capability Framework

• 4 Primary Capabilities
• Regulatory
• Positional
• Functional
• Cultural
• Comparison Process
• Your Companys Standing Against 2 Competitors
• Track Over Time
• Measure success or failure of KM effort

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Capability Framework

• Tiwanas KM Assessment Kit Form 13

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Completing Capability Framework

• Use Bohns Scale (Tiwanas Assessment Kit Form
  11)

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Tracking Knowledge Growth

• Recognize Changes over Time
• Based on Tracking with Capability Framework
• Ask Diagnostic Questions
• How is the stock of this knowledge resource
  increasing, etc.

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Tracking Knowledge Growth

• Tiwanas KM Assessment Kit, Form 10

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Choosing Your Companys K-Spots

• It is the sum of the decisions made on the front
  lines that decide the future well-being of your
  company.
• Choosing the knowledge spots provides a view of
  technology investments needed to drive potent
  knowledge management in you company

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The Four Positioning Choices
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Strategic Position A

• This position indicates that the company is
  internally safe but externally vulnerable on this
  front.
• In this quadrant the company is externally
  vulnerable because almost all knowledge is
  explicated and codified.
• The focus should be more on security measures
  than on knowledge management.

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Strategic Position B

• Has managed to explicate some portion of it
  knowledge.
• The portion of knowledge is a small percentage
  compared to its competitors.
• Tacit knowledge is higher.

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Strategic Position C

• This is the worst position that the company can
  be in, in terms of knowledge.
• The company as no strategic advantage whatsoever.
• The necessary steps need to be taken to ensure
  that they have a strategy in place that will help
  them move from this position.

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Strategic Position D

• In this position companies are successful, but
  the need to manage their knowledge in a manner
  that will provide them a long-term competitive
  advantage.
• They can gain a lot if the invest in knowledge
  management systems, technology and
  infrastructure.