Knowledge Management

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Knowledge Management

• Presented by
• Brad L. Hershberger, Itthipat Limmaneerak,
  M.Faisal Fariduddin A. Nasution, Melanie
  Swearengin, Scott Shaw

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Knowledge Management Trends

• Survey of 423 organizations in the UK, Europe,
  and the US found
• 64 had KM strategy in place
• 81 had KM, or were considering, a KM program
• 75 believed KM can play a significant role in
  improving competitive advantage.
• (KPMG Consulting)

Source Reference 1
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Knowledge Management Trends

• Overall worldwide spending on KM has been
  estimated to increase from approximately 3.1
  billion in 2000 to over 12 billion by 2004.
• Document and Knowledge Management After-Hype
  KM Enters Critical Phase.

Source Reference 2
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What is Knowledge Management?

• What is knowledge?

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Knowledge Hierarchy
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What are data?

• Data are a set of discrete, objective facts about
  events.
• Data are facts, numbers or individual entities
  without context or purpose.
• Example A company has total sales of five
  billion dollars in Q3 of the year 2003.

Source Reference 2 and 3
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What is information?

• Information is data that has been added value
  through context, categorization, calculation,
  corrections, and condensation.
• Information has an impact on a users judgment
  and behavior ( to aid decision making).
• Example Five billion dollars in Q3 of this year
  are 10 increasing in sales revenues in Q3 of
  last year.

Source Reference 2 and 3
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What is knowledge?

• Knowledge is the fact or condition of knowing
  something with familiarity gained through
  experience or association.
• Knowledge is the human capacity (potential
  actual ability) to take effective action in
  varied and uncertain situations.
• Example To gain higher growth rate in sales
  revenue, a company not only focuses on the
  domestic market, but also looks for the exporting
  market.

Source http//www.bus.utexas.edu/kman/answers.htm
and Reference 3
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What is difference between information and
knowledge?

• Knowledge life cycle

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Knowledge Life Cycle (in business)
It must be created either within or outside the
organization
The user will learn what worked well and not so
well as a result of applying the knowledge gained
It can be stored in somewhere
Those who need the specific knowledge must find
out where it is, when they need it
The knowledge can be put to use towards some
productive purpose
the user will then go through the act of actually
acquiring
Source www.processrenewal.com/files/def-km.doc
11
When does information become knowledge?

• Without the learning component, the cycle becomes
  an information delivery strategy.
• The concept of learning is a key contributor

Source www.processrenewal.com/files/def-km.doc
12
Types of Knowledge

• It is also important to know and distinguish
  between the two kinds of knowledge that must be
  addressed in organizations

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Tacit Explicit Knowledge
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Tacit Knowledge Defined

• We know more than we can tell
• Something that we know when no one asks us,
  but no longer know when we are supposed to give
  an account of it, is something that we need to
  remind ourselves of
• All knowledge (is) personal and all knowing
  (is) action

Source Reference 6, 7 and 8
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Tacit Knowledge Explained

• Can you calculate the arc, velocity and energy
  needed to successfully make a free-throw?
• Explain to someone the mathematical formula for
  riding a bike.
• Why does your favorite recipe, cooked by your
  grandmother, never seem to turn out the way you
  remember?

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Whats wrong with tacit knowledge?

• Tacit knowledge posses difficulties in
  Knowledge Management for 3 main reasons
• We are not fully aware of having it
• There is no personal need to make it explicit
• There is a risk of losing power and competitive
  advantage

Source Reference 9
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Explicit Knowledge Defined

• Explicit knowledge uses a different part of the
  brain than tacit knowledge
• Explicit knowledge can be codified and explained
• Explicit knowledge can be separated from the
  individual

Source Reference 10
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Examples of Explicit Knowledge

• Documentation
• Procedures
• Mathematical Formulas
• Intranets
• Information Explicit Knowledge

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Whats wrong with explicit knowledge?

• Instead of storing information in our brains, we
  design our environments to make it easy to find
  the information we need
• Explicit knowledge is devoid of action and our
  knowledge is in our action
• The narrative in itself is not enough for the
  other part to gain a complete understanding

Source Reference 11, 12 and 13
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Knowledge Management (useful definition)

• The systematic process of creating, maintaining
  and nurturing an organization to make the best
  use of knowledge to create business value and
  generate competitive advantage.

Source Reference 6 and 7
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Interesting KM Statistics

• Who is pushing hardest
• The benefits achieved
• Use of technology to manage information

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Methodology KM Research Report 2000 by KMPG
Consulting
Respondents Actual
USA 101 24
UK 100 24
Germany 83 20
France 77 18
Netherlands 15 3
Scandinavia 15 3
Elsewhere (Italy, Spain) 32 8
Total 423 100
Source Reference 1
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Who is pushing hardest?

• This indicates that the leaders of organizations
  understand the significance of KM and are driving
  their organizations KM initiative

Source Reference 1
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The Benefits Achieved

• The most significant benefits achieved included
  better decision making (71), faster response to
  key business issues (68) and better customer
  handling (64).

Source Reference 1
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Use of technology to implement KM

• Internet (93) and intranet (78) are favored
  technology used in accessing data
• Data warehousing and mining techniques are
  favored technology used in analyzing data

Source Reference 1
26
KM in E-Business
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The Transition

• Reason ? The disconnect between IT expenditures
  and the firms organizational performance.
• Transitions made
• Transition from information processing to
  knowledge creation.
• Transition from Total Quality Management to
  Business Process Reengineering.

Source Reference 4
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The Transition

• Old World
• Phases
• Automation.
• Rationalization of procedures.
• Reengineering.
• What is the new world
• of e-business?

Source Reference 4
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The Transition
Source Reference 4
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KM in E-Business Strategy

• Transition ? paradigm shifts
• Paradigm shift in business strategy.
• Paradigm shift in design and use of technology.
• Paradigm shift in the role of senior management.
• Paradigm shift in organizational knowledge
  processes.
• Paradigm shift in economics of organizational
  assets.
• Paradigm shift in organizational design.

Source Reference 4
31
KM E-Business Strategy

• Using intranet ? should be viewed as a KM
  environment with perspectives such as
• Information perspective
• Awareness perspective
• Communication perspective

Source Reference 5
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Case Study
33

• BioTechnology research and manufacturing company
• 5450 employees in 130 countries (Main
  headquarters in LaBalme, France. NA headquarters
  in Durham, NC.)
• 63 different manufactured products in 4 different
  disciplines (Bacteriology, Hemostatsis,
  Immunoassays, Molecular Biology)

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Case Study
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Company Profile

• Employees -145,000 employees
• Products -Audit Tax Consulting
• Customers -SEC, Fortune 500
• CIO reports to committee of partners
• Over 400 IS professionals (25) on the SALT side.

Source Reference14
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Merger - 1998

• Price Waterhouse and Coopers Lybrand
• Combined six lines of business across 24
  industries in over 152 countries worldwide with
  over 150,000 employees
• Different IT platforms
• Thousands of servers with various information

Source Reference 14
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Goals for Merger

• Meet Increasing Client Needs
• Expand Globally with Clients
• Establish a Global Knowledge Base (Intellectual
  Capital)
• Expand Range of Services
• Become More Technology Oriented
• Grow Revenue
• Dominate Market

Source Reference 14
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Building the Knowledge Base

• To a great extent it is all we have and all we
  share and sell. It is the basis of what we do.
  We sell to clients the knowledge our consultants
  have and have access to. So managing the
  resources effectively and making sure we can
  share it across the consultancy is vital to us.
  It is the lifeblood of the organization
• -Julia Collins, Head of PwC Global Knowledge
  Group

Source Reference 14
41
Issues and Challenges of Building the New PwC
KM Tool

• Each line of business at the old companies only
  had access to their knowledge.
• Differences in IT systems and organizations
  structure
• E-mail networking and Intranet using Lotus Notes
• Integration of databases and servers
• Eliminate the senior executives from controlling
  access to information

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Final Results and Successes

• IT staff worked on a region basis instead of
  local office
• Choose consistent information language (SQL,
  Novell, etc.)
• Combined databases and choose individuals to
  update them
• Linked e-mail and lotus notes for a strong
  internal communication system
• Creation of a global wide area network to link
  wide area networks of PW CL

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Knowledge Management enable the efficient
prioritisation, creation, retrieval and leverage
of relevant content that
What is KM to Me?

• Builds and strengthens our client relationships
• Supports the professional development and
  productivity of our people
• Facilitates the development of innovative,
  quick-to-market solutions
• Fosters a continuous learning culture

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PwCs Knowledge Management Tool (TALK)
How Do I Use PwCs KM?

• What is TALK?

• Tax and Legal Knowledge
• A collection of resources, both internal and
  external
• A source for new developments, products and
  applications, research, publications, bulletins
  and discussion forums.
• A complete archive of old information

TALK Facts Stats --1,000 databases --1,780
websites -- 62 countries
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TALK U.S. Homepage
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Knowledge Management divided into External
Internal sources
External Sources

• BNA
• WestLaw
• CCH
• Self study tutorials/reference guides
• In-house training classes
• Electives offered at major training conferences

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External Sources
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Internal Sources

• WNTS
• WNTS tax developments communicates legislative
  and technical tax developments to the U.S. tax
  practice through WNTS Alerts and Spotlights.
• Info Source
• Worldwide Tax Summaries
• 123 countries
• Corporate Taxes
• Individual Taxes
• Tax References Files
• Technical documents Practice Tools
• Speeches Presentations PwC Authored Articles

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Pinnacle
Internal Source

• Incentives to contribute
• Certain mandates to contribute when working on
  certain projects

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Tax Daily News

• Content Daily electronic US Tax newsletter
  including leadership announcements and a summary
  of TALK contributions
• Mailed daily to each tax professional

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Tax Yellow Pages

• What is it?
• Online, annually updated, directory of US Tax
  professionals and their principal areas of
  practice.
• What does it do?
• Reduce the time spent by professionals locating
  people and expertise across the US Tax practice.
• Issues Addressed
• Clients want to contact PwC professionals with
  specialized experience PwC partners need to
  dialogue with peers whose competence they trust
  PwC staff need information on who works in area
  and how to contact them.

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Case Study
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Company History

• Founded by Dr. Stanley Buckman in 1945
• 5 employees Initial customers were large paper
  facilities
• Customer base expanded
• leather, paint, sugar processing, agriculture,
  plastics industries and water treatment
  industries
• 1978 Sales 29 million 493 employees 20
  companies worldwide 8 manufacturing plants over
  1,000 specialty chemicals in their product line
• New Leadership1978 Bob Buckman became chairman
  and CEO
• If you expand the ability of individual members
  of the organization, you expand the ability of
  the organization.
• Bob Buckman

Source Reference 17
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Knowledge Sharing Evolution

• STEP 1 ? Send out PhDs to gather best practices
• Costly Inefficient
• STEP 2 ? Runners
• Slow Limited Knowledge
• STEP 3 ? GMs connected through network for email
• Wrong People
• Conclusion ? The people who really need the
  information were the people in front
• of the customer. Bob Buckman
• STEP 4 ? Field Sales people given access

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Knowledge Management Strategy

• Simplify the lines of communication
• Gives everyone access to the knowledge base of
  the company
• Allow each individual to enter knowledge into the
  system
• Function across time and space with the knowledge
  base available 24/7
• User friendly
• Communicate in whatever language is best for the
  user
• Update automatically the accumulation of
  technical QA should generate knowledge bases for
  future

Source Reference 17
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Knowledge Transfer Department

• 1992 Knowledge Transfer Department created
• (Head reporting directly to the Chairman.)
• Companys network on CompuServe, the public
  online service
• Sales people got a leased notebook with a modem
• Point-point link with headquarters by a phone
  call
• Time frame 30 days to implement
• Cost 75,000 per month in access charges

Source Reference 17
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KNetix System

• Forums
• Tech Forum open to all employees, message
  board, conference room, library section
• Internal Forum focused on internal improvement
• Business Forum focused on helping the customer
• ALL Forums
• Monitored by System Operators Section Leaders
• All forums set up in English - translators were
  hired

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Source Reference 18
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Motivation

• Those individuals who have something
  intelligent to say now have a forum in which to
  say itThose who will not or cannot contribute
  also become obvious and can be intelligently
  eliminated from the organization.
• Bob Buckman
• 1994 invited 150 top knowledge shares to
  Scottsdale, Arizona for retreat
• Received a new IBM ThinkPad 755

Source Reference 17
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Evaluation

• Ways to Improve
• Increase participation by non U.S. Associates
• Cultural issues - not cool to type or ask for
  help
• Language problems - Forums set up in different
  languages
• Results
• 1994 KTD 8.4 million (plans to spend 9.5
  million in 1995)
• 65 of sales people out selling - 16 in 1979
• 33 sales from products less than 5 years old -
  22 prior to KNetix
• 1999 sales over 300 million
• Received the Arthur Andersen Enterprise Award
  Smithsonian Computerworld for Knowledge Sharing

Source Reference 17
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Summary
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Summary

• Definition of knowledge management
• What distinguishes knowledge management over
  information and data
• Types of knowledge
• Interesting statistics of knowledge management
• The transition to implement knowledge management
  for
• e-business
• Implementing knowledge management to firms

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Disadvantages of and challenges to implementing
knowledge management

• Not all people in the firm would share their
  knowledge.
• Not all people in the firm understand the concept
  of and how to implement knowledge management.
• The implementation of knowledge management can be
  considered as another expenditure to the firm by
  the senior executives and / or non-IT people in
  the firm ? the chance of failure like the other
  IT projects.

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Best Practices

• Foster communication between skill areas.
• Promote product training.
• Create open physical work environment.
• Encourage independence and risk taking.
• Provide extensive documentation.
• Make support resources easily available.
• Expect large learning curves in projects.

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Best Practices

• Developed to be highly specialized ? By country,
  industry, idea, business unit.
• Divided by external and internal sources
• Can take advantage from 3rd party information
  services.
• Can take advantage of internal ideas.
• Available to clients
• Filtered information is available to clients.
• Highly accessible to firm employees
• Intranet, Lotus Notes and Internet.

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Best Practices

• Simplify the lines of communication
• Get information to the people in front of the
  customer
• Give everyone access to knowledge base of the
  company
• Operate 24/7
• Operate in users preferred language
• Track all research for later use

68
References

• 1. KMPG Consulting Knowledge Management
  Research Report 2000, p.5-9, 14-16.
• 2. Document and Knowledge Management
  After-Hype KM Enters Critical Phase. Computing
  Canada, April 14, 2000. p13
• 3. The Introduction to Knowledge Management by
  Dr. Nancy Shaw, an assistant professor at George
  Mason University's School of Management, URL
  http//www.icasit.org/km/intro/intro.htm , slide
  page.5-7
• 4. Yogesh Malhotra, Knowledge Management for
  E-Business Performance Advancing Information
  Strategy to Internet Time, In the Executives
  Journal, V.16, No. 4, pp. 5-16, 2000.
• 5. Dick Stenmark, Information vs. Knowledge The
  Role of Intranets in Knowledge Management, URL
  http//www.viktoria.se/results/result_files/183.pd
  f
• 6. Polanyi, M. The tacit dimension. Reprinted in
  L. Prusak (ed.), Knowledge in Organization.
  Boston Butterworth-Heinemann, 1998, pp. 135-146.
• 7. Wittgenstein, L. (1958). Philosophical
  Investigations. Oxford Blackwell.
• 8. Tsoukas, H. Do we really understand tacit
  knowledge. Presented to Knowledge Economy and
  Society Seminar, LSE Department of Information
  Systems, 14 June 2002.
• 9. Stenmark, D. Leveraging Tacit Organizational
  Knowledge. Journal of Management Information
  Systems Winter 2000/2001 17, 3 ABI/INFORM
  Global pp 9.
• 10. Schachter, D.L., 1998, Memory and
  Awareness, Science 280, 59-60.

69
References

• 11. Gorman, M.E. Types of Knowledge and Their
  Roles in Technology Transfer. Journal of
  Technology Transfer Jun 2002 27, 3 ABI/INFORM
  Global pg 219.
• 12. Schön, D. A., The Reflective Practitioner,
  Basic Books, 1983.
• 13. Stenmark, D. Information vs. Knowledge The
  Role of intranets in Knowledge Management.
  Proceedings of the 35th Hawaii International
  Conference on System Sciences, 2002.
• 14. McCauley, M. PricewaterhouseCoopers Building
  a Global Network. Case Study, Centre for Asian
  Business Cases, School of Business, The
  University of Hong Kong. 2000.
• 15. Behrend, E. Knowledge Management Resources.
  Tax Start, Philadelphia. August 13, 2002.
• 16. Weinreibh, A. SALT Knowledge Management
  Resources. Tax Start, St. Louis. July 18, 2002.
• 17. Fulmer, William E., Buckman Laboratories (A),
  Harvard Business School, 9-800-160, January 22,
  2003.
• 18. Buckman Laboratories, www.knetix_at_buckman.com,
  October, 2003.
• 19. Buckman Laboratories, Bulab Holdings Annual
  Report 2002.