Knowledge Management

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Knowledge Management

• Nilmini Wickramasinghe,PhD

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Introduction / Outline

• What is the knowledge economy
• Managing in the Knowledge Economy with KM
• The need for KM
• K- architecture
• KM systems
• How to become a knowledge based business
• Rational for KM in e-business

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WHAT IS THE KNOWLEDGE ECONOMY?

• Three distinct ages
• Agrarian
• Industrial
• Information
• Keys of the information age
• Globalisation (IS/IT gt reach/range)
• Rapid technological change
• Growing importance of knowledge

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Old vs New economy
OLD ECONOMIC NEW ECONOMIC ENTERPRISE ENTERPRIS
E
LAND LABOUR CAPITAL
CREATIVITY INFORMATION INNOVATION INTELLEC-TUAL
CAPITAL
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• Traditional economic theory assumes that most
  industries run into diminishing returns at some
  point
• In the new economy knowledge based products and
  services have increasing returns
• Why? because knowledge based products are
  expensive to produce for the first time but
  cheaper to reproduce

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MANAGING IN THE KNOWLEDGE ECONOMY WITH KNOWLEDGE
MANAGEMENT

• In order for organisations to manage and prosper
  in this knowledge economy they must embrace
  knowledge management (KM)
• KM deals with the process of creating value from
  an organisations intangible assets
• KM essentially turns data (raw material) into
  information ( finished goods) and then into
  knowledge (actionable finished goods)

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• Thus KM involves the capture of data at the
  source, the transmission and analysis of this
  data as well as the communication of information
  based on or derived from the data to those who
  can act on it

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The Need for Knowledge Management

• KM is critical for an organisation to achieve
  sustainable competitive advantage in todays
  information age
• In fact adopting some sort of KM techniques/
  strategies is now a competitive necessity
• Simply state the company that knows more about
  its customers, products, technologies, markets
  and their linkages should perform better

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Knowledge Management

• Concerned with creating value from the
  information captured by analysing and
  communicating this information to those within
  the organisation who can use it.
• The processes of Capture, Storing , Transmitting
  and Creating new knowledge are key

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Cont.

• Why knowledge management?
• Sustainable competitive advantage is dependent on
  building and exploiting core competencies -
• In order to sustain competitive advantage
  resources which are idiosyncratic (i.e. scarce)
  and difficult to transfer or replicate are
  required.

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KNOWLEDGE ARCHITECTURE

• KM is much more than a Lotus Notes lessons
  learnt database and thus requires thoughtful
  design of various technologies to support the
  knowledge architecture
• The knowledge architecture is designed to capture
  knowledge and thereby enable the knowledge
  management process to take place

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• The K-architecture outlines the key aspects of
  knowledge including its form, how it is captured
  and transferred throughout the organisation
• Forms of knowledge
• objective/subjective
• as an object knowledge can exist as either tacit
  or explicit
• As a subject knowledge becomes an ongoing
  phenomenon that is being shaped by social
  practice of communities
• Tacit know how
• Explicit factual

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Knowledge Architecture

• In order to enable these processes the Knowledge
  Architecture is designed to identify and capture
  knowledge
• Underlying the knowledge architecture is the
  recognition of the binary nature of knowledge
  namely knowledge as object and subject

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K-architecture
Communities of Knowledge Workers knowledge
generation takes place here when interactions
between people take place. LOOSE
Knowledge Repositories containing the product
knowledge e.g., service documents, product
specs, instruction manuals TIGHT
Flow of Knowledge via Knowledge Management System
Knowledge Cartography the mapping and
characterization of the knowledge of
organisations from different aspects such as core
competencies to individual expertise as well as
comminutes of practice, interests of customers,
suppliers and competitive intelligence.
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Yin Yang Model of KMsource Wickramasinghe
Mills
Organisations Recognise the Need for Knowledge
Management
Competitive Environments or Environments
Experiencing Radical Change
Sense-making model of KM
Model of divergent meanings HEGELIAN/KANTIAN Lo
ose provides agility flexibility
Model of convergence compliance LOCKEAN/LEIBNIT
ZIAN Tight provides efficiencies of scale
scope
Information Processing model of KM
Optimisation-driven efficiency
oriented OBJECTIVE
Knowledge creation renewal SUBJECTIVE
DUALITY
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Knowledge Management
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Nonakas Knowledge Spiral

• Knowledge creation process
• Four key transformations
• Existing explicit New explicit
• Existing explicit New tacit
• Existing tacit New explicit
• Existing tacit New tacit

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Data--knowledge
Wisdom
Context Independence
Understanding principles
Data
Knowledge
Information
Understanding patterns
Information
Knowledge
Understanding relations
Wisdom
Data
Understanding
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Data Mining
Knowledge evolution
Knowledge
Information
Data
Steps in knowledge discovery
Selection
Interpretation / Evaluation
Data Mining
Transformation
Preprocessing
Target Data
Preprocessed Data
Transformed Data
Data
Patterns
Knowledge
Types of data mining
Exploratory Data Mining
Predictive Data Mining
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Why / How KM/DM

• Not why..but why not!

Association Rules
Exploratory
Clustering
Data Mining
Knowledge
Neural Networks
Predictive
Decision Trees
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DM and the K Spiral
KNOWLEDGE
TACIT
EXPLICIT
Association Rules
TACIT
Socialization
Externalization
Classification
Prediction
Data Mining
EXPLICIT
Combination
Internalization
Clustering
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Knowledge Spiral Actualized
EXPLICIT
EXPLICIT

• D1 is administered to 60 of the patients.
• D1 and D2 are administered together to 40 of the
  patients.
• D2 is administered to 67 of the patients who are
  given drug D1.

Patient ID Drug
1 D1,D2
2 D3,D4,D5
3 D3,D1,D5
4 D5, D3,D1
5 D5, D2
Information Processing
EXPLICIT
TACIT

• D1 is administered to 60 of the patients.
• D1 and D2 are administered together to 40 of the
  patients.
• D2 is administered to 67 of the patients who are
  given drug D1.

TACIT
EXPLICIT
Sense Making
If a patients age is lt 40 years and the patient
had a heart attack and D1 is administered to the
patient, then D2 should also be administered to
that patient.
The Knowledge Spiral
TACIT
TACIT
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Process-centric K - OODA Loop
Observation
Data/information collection
Action
Superior decisions Optimal solutions Winning
strategies
Boyds Loop
Orientation Data transformation/ analysis/
Generation of germane information
Determination
Storage of non-germane data/information
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KNOWLEDGE MANAGEMENT SYSTEMS

• These are systems that are designed to support
  the flow, sharing , integration and capture of
  knowledge
• Many examples of KMS can be seen in the
  consulting companies such as CapGeminiErnst
  Young, KPMG and Acenture.
• Essentially these KMS combine the following
  technologies internet, intranet, extranet,
  groupware, data warehouses, data filters, data
  mining, client-servers, multimedia and software
  agents

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KMS in Practice

• KMS in practice are touted as being able to
  support and enable management processes within
  their respective organisations
• Let us examine successful KMS in practice DuPont,
  KPMG and Kaiser

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Background of Consulting Industry

• Key industry trends facing the Big 5 consulting
  companiesin the late 80s and 90s
• growth retention of employees
• integration of services
• mergers globalisation
• Knowledge management was adopted and incorporated
  as part of their strategy in order to address
  these challenges

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• Adopted KM in early 90s as part of an integral
  strategy to increase market share, improve
  productivity and retain employees
• KMS included conference model, library model

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Summary of Case Findings

• Environment competitive
• Strategy KM clearly articulated
• Technology intranets, groupware, databases
• Culture emphasis on sharing
• Structure trying to streamline along lines of
  business
• View of KM - capturing expertise provide
  clients with most effective and efficient best
  solns

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KMS support of the Knowledge Architecture

• Unequivocally support that the KMS implemented in
  all three cases supported the objective arm -
  they functioned as repositories storing both
  explicit and some articulated tacit knowledge
• Not clear at all that KMS supported the
  subjective arm

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KMS
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HOW TO BECOME A KNOWLEDGE-BASED ENTERPRISE

• Just implementing a KMS doesnt make an
  organisation a knowledge-based enterprise

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Knowledge management
Learn
Represent
Access
Transfer
Generate
Knowledge Management Process
Information Technology Infrastructure
Behaviours Culture
Structure
Knowledge architecture
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RATIONAL FOR KNOWLEDGE MANAGEMENT IN E-BUSINESS

• The integrated e-commerce/ERP system enables the
  capturing, storing and dissemination of
  information throughout the logistic network
• The combination of technologies making up the
  integrated e-commerce/ERP system mirrors many of
  the technology configurations of existing
  knowledge management systems

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• Given that the technologies involved are similar
  and that the e-commerce/ERP system enables the
  flow of information throughout the logistic
  network in much the same fashion as the KMS
  enables the flow of knowledge, we can
  conceptualise this integrated e-commerce/ERP
  system as a knowledge management system and adopt
  knowledge management practices associated with
  KMS to maximise the value of the information that
  is generated through their e-commerce/ERP system.