KM is the explicit and systematic management of vital knowledge and its associated processes of creation, organization, diffusion, use,

and exploitation. Identification of knowledge, as a recognized field of principal investigation for business use, in addition to academic research, has spurred continuing demand for information systems. Organizational expenditures on IT have generated significant benefits for the employees and are growing at a faster pace. As organization grow, they are challenged by rapidly changing economic forces that necessitates the development of faster and more accurate responses. However, the information explosion threatens to overwhelm and overload individual and corporate response mechanisms. Knowledge leads people in the effective usage of information so that they can make more informed and successful decision in addition to enhanced customer interactions. Some organizations have learned the value of knowledge the hard way when they lost in through manpower reduction or retirement programs. Conversely, some organizations that have These managed their knowledge in a professional, proactive and systematic manner have become more innovative, agile, and successful. companies are able to connect a high percentage of their employees and keep them focused on the enterprise strategy and goals by having them generously share their experience as well as insights with one another. This chapter presents the basic concepts and terminologies associated with KM. The knowledge classification schemes as well as the techniques for conversion of knowledge from one form to the other would also be covered.

Data, Information, and Knowledge: Data, information, and knowledge are closely interconnected. Data lies at the lowest layer in the knowledge chain and acts as the raw material for the knowledge process as described in the previous chapter. Data refers to the unformatted, unstructured material freely available around us which by itself does not provide any meaning. The various signals acoustic, visual, tactile and otherwise that are around us could be interpreted as having information. The relation between data and information formally is that, information is a structuring of data that reduces uncertainty. Information value of a message is higher if it reduces more uncertainty. Information value of a message is higher if it reduces more uncertainty. In a more informal way, it could be said that information is interpreted data. Knowledge is the interpretation of information in the eye of a beholder using his own history, his experiences, insights and interpretation. It is because of this reason that the same information may lead to different knowledge for various individuals. In other words, Date + context = Information Or Information = interpreted data Or Knowledge = interpreted information Or Information + Experiences, Insights, Judgment = Knowledge

Basic types of Knowledge The concept mentioned above can be reformulated to imply that the relation between data, information, and knowledge means that a person receives data and with the knowledge he or she has, data becomes information, which in turn changes the knowledge of the interpreting person. Various aspects of knowledge make it almost impossible to define types of knowledge unequivocally. Traditionally, conflicting epistemological, psychological, and cultural categories can easily be distinguished. Various experts associated with the field of KM have propounded different views on the types and classification of knowledge. However, we would employ the following generally accepted categorization: Tacit knowledge Tacit knowledge, also referred to as procedural knowledge, refers to the knowledge that a being needs to act and react in its environment, for example to play cricket. It is unformulated, related to intuitions, feelings and emotions. Tacit knowledge cannot be easily documented or explained; tacit knowledge is best transferred through and apprenticeship model, and often requires skills that supersede pure instruction. Tacit knowledge is non-structured, intangible, cannot be recorded and represents experiences, ideas, insights, values, and judgments of people. Tacit knowledge may be thought of as presuppositions or stances to which many of our action and behaviors are committing us to. Such stances are not occurrent beliers, although they may be expressed as occurrent beliefs under the appropriate circumstances. Rather, they constitute a king of cognitive background or disposition to believe that certain things are the case. An example of this kind of tacit knowledge

is that objects are rigid- a bit of knowledge few people ever bother to formulate but which is evidenced in such basic everyday actions as sitting in a chair.

Explicit knowledge Explicit knowledge also referred o as procedural knowledge refers to knowledge that is, or can be, written down or in other words documented. Explicit knowledge is semi-structured and represents tangible or recorded knowledge. Documents, e-mails, voice mail, multimedia etc. are examples of this form of knowledge. The distinction between tacit knowledge and explicit knowledge has sometimes been expressed in terms of knowing-how and knowingthat, respectively, or in terms of a corresponding distinction between embodied knowledge and theoretical knowledge. On this account knowing-how or embodied knowledge is characteristic of the expert, who acts, makes judgments, and so forth without explicitly reflecting on the principles or rules involves. An expert works without having a theory of his or her work; he or she just performs skillfully without deliberation or focused attention. Knowing-that, by contrast, involves consciously accessible knowledge that can be articulated and is characteristic of the person learning a skill through explicit instruction, adherence to rules, observing skilled people a work etc. While such declarative knowledge may be needed or the acquisition of skills, it no longer becomes necessary for the practice of those skills once the novice becomes an expert in exercising them. individual acquires a skill, they also acquire a Once an corresponding

understating. The concept of tacit and explicit knowledge is pictorially depicted in the figure 4.1 below

Documented Known Unknown Explicit Knowledge Tacit Knowledge

Not Documented Knowledge Gaps Unknown Gaps

Potential

knowledge

Potential

knowledge

represents

business

intelligence and refers to knowledge that can be extracted from highly structured data stored in databases ERP systems and business operational applications. An organization contains voluminous amount of data from various sources and in various formats. The prime sources are the databases spread across the various divisions and departments within the organization. Data mining techniques can, under favorable conditions, databases. Organizational Knowledge Capital Knowledge capital is the value that a customer assigns on top of the cost of sales and cost of capital. It is the surplus value on top of the traditional value. employees within an The people who possess the accumulated organization are the repositories of an knowledge about a company are the carriers of knowledge capital. The accumulation of insights about how things work within their workplace or about the culture of the organization. They carry a share of the companys knowledge capital, which makes them a shareholder of the most important asset a firm owns. This never gets reflected in the companys financial reports. Every such shareholder of knowledge extract valuable knowledge from an organizations

asset in fact becomes a manager, because information acquisition and utilization are the essence of all managerial activities. The current methodologies use a bottom up method of evaluating the knowledge assets of an organization. Te total knowledge capital is calculated by summing up the value of patents, software, and trained people. This method does not reflect the true value of knowledge or the knowledge capital of an organization. The true value representation requires a top-down approach, which does a valuation of the outputs before the valuation of the inputs. The capacity of a firm to receive revenue from customers who are willing to pay a premium price for the knowledge in addition to the capital goods and manufacturing capabilities an organization offers. A firms knowledge capital is not worth anything until the customer recognizes the value of knowledge offered by the organization. The important aspect, which needs to be realized, is that there is a premium on knowledge capital that should be added to the financial equity value. The final value would then reflect the value perceived by the stock market. According to Paul Strassmana leading proponent of this theory the sum of knowledge capital of an organization and the shareholder book equity would result in a value that is a close approximation of the stock market evaluation of the organization. Organizational Knowledge Classification: Leading knowledge theorists and practitioners believe that knowledge can be classified in the following two ways Information view (Knowledge as information) Knowledge is derived form structured and unstructured data and information using

information management systems based on information theory. perceived as an information object.

IT

professional tend to follow this classification wherein knowledge is

Process view (Knowledge as a process) Knowledge or tacit knowledge comprises of ideas, judgments, experiences, know-how, procedures, and insights and can be defined in terms of philosophy, psychology, and sociology and can be disseminated trough training, education, and learning. Business managers view knowledge as embodied within the organizations employees and business processes and hence follow this classification. Knowledge Creation Information View Mechanism Information Management Method Information Theory Source Structured/Unstructured Data & Information Knowledge Creation Process View Mechanism Formalized Education Continuous Learning Method Philosophy, Sociology And Psychology Source Experiences, Insights Judgment, Know-how and Procedures

Knowledge Life Cycle: KM focuses on the processes and the people involved in creating, sharing and leveraging knowledge. Information management, in contrast, is more concerned with establishing processes and systems to gather, organize, summarize, and package information and ensure timely delivery to the right decision makers for the situation involved. A useful definition of knowledge relevant to the context being discussed is that when knowledge is acted upon it provides meaning for information and data, and directs decision-making tacit knowledge, is usually held in human minds and includes knowledge about the context of knowledge or in other words it enables formal knowledge to be applied efficiently in evolving contexts and, in this sense, it acts as a wrapper for formal knowledge, interpreting it for the current, specific context. Also relevant is the distinction between foreground and background knowledge: the former is that which is necessary for problem-solving in a given context; the latter is that which supports its application. Foreground knowledge typically provide by colleges and universities. The discussion leads us to an interesting question: Does knowledge possess a definite life time? The most common answer I have received during my interaction with individuals in various capacities is NO. Knowledge has a definite lifetime and does become obsolete with passage of time. This concept leads to the following definition of KM: Knowledge can be defined as obsolescing what you know before others obsolete it and profit by creating the challenges and opportunities others havent even thought about. This has more to do with the

diversity of perspectives from which an individual attempts to comprehend the concept of knowledge and the general inadequacies with the known definitions of management. Organization strategies which were highly successful at particular point of time and context would become worthless at another time and context. Similarly, best practices unless they are repeatedly analyzed for their effectiveness may become worst practices that may disastrously impede business performance and competence. The success of the company that created jet engines does not automatically ensure its success as a manufacturer of high resolution televisions. This discussion leads to an important conclusion: The logic of success for yesterday doesnt translate automatically into the logic of success for the new tomorrow. When explicit information is accessed and is acted upon, it turns into implicit knowledge for a person. When that implicit knowledge is then stored in a format that is accessible to others, it returns to its explicit form, ready to be used by others. With a strong interaction and exchange of ideas between the users of information, a company creates perpetual motion within the knowledge life cycle, if these exchanges are identified or captured. This process is illustrated in the figure below. Tacit knowledge has to be continually enhanced through communication to others and then recirculated back into explicit information independently. They rely on each other to further enhance the process, since KM is not a destination, but an ongoing process. Only by following the knowledge life cycle can an organization leverage its most importance asset the Intellectual Capital of its employees.

Knowledge -Cataloguring -Creation -Capture

Knowledge -Application

Knowledge -Storage

Knowledge -Dissemination

Knowledge -Organization -processing

The problems with most kinds of KM Implementations within organizations are that, they cannot question their own underlying logic and related assumptions, and nor can they sense dynamic changes occurring in the business environment that they have not been programmed by humans to detect in advance. The old business models interpreted knowing and knowledge in terms of rules of thumb, procedures, processes, and best practices at any given point of time. These models assume that knowledge responsible for past successes can be projected into the future to provide sustainable success. These existent models are unable to predict the future based on past data. This concept holds significant relevance in the current economy as most of the companies have discovered the hard way. The rise and the fall of Dotcoms also bear ample testimony to this fact.

Organization Knowledge Processes:

The knowledge processes and function play a very crucial role in leveraging the IC of an organization. They are responsible for the extraction of knowledge from the various data and information sources within an organization, their storage and flow within the organization. KM Implementations involve distinct and repeatable cycles or processes irrespective of the terminologies used or the path followed. There are five distinct processes that are as follows: 1. Knowledge creation 2. Knowledge acquisition/capture 3. Knowledge organization 4. Knowledge sharing 5. Knowledge renewal These should not be confused with the concept of knowledge life cycle mentioned earlier in this chapter. These processes confirm to the organizational knowledge life cycle. KM involves connection people to people and people to information and in the process creates sustainable competitive advantage for organization. The subsequent section presents the five key knowledge process as listed above.
People + Experience

Organizational Information

Transfer + Act = New Knowledge

Knowledge creation One of the fundamental questions that would arise in the minds of the readers would be Is knowledge created or is it discovered? In the normal course of an individuals or an organization work, knowledge is created, discovered, transformed, and shared. The process is cycle and contributes to the development of the knowledge base of an organization. above concepts. The following sections would highlight the Organization knowledge can and does take many

forms. Some of these forms are as mentioned below: i. ii. iii. iv. v. vi. Competitor knowledge Customer knowledge Supplier knowledge Product knowledge Technology knowledge Process knowledge

The consistent components of these types of knowledge are the organizational context and the ways in which they are created, and are commonly referred to as the knowledge creation cycle. Generally, knowledge within organization is created in two distinct cycles as mentioned below. While these two cycles and types of knowledge are crated and often used differently, they are interrelated as illustrated in the figure below.

CKCC

PKCC Organisational Knowledge

KNOWLEDGE CONVERSION As discussed above the creation of a knowledge base or a knowledge repository that facilitates effective sharing and dissemination of knowledge are highly critical. The primary concern lies in converting the tacit knowledge present within the organizational employees and processes into an explicit form that can be stored within the organizational knowledge for highly optimized access as well as retrieval. Dr Yogesh Malhotra, summarized the knowledge conversion process and defined four phases of Knowledge conversion as mentioned below: Socialization This process involves the conversion of tacit knowledge to explicit knowledge through sharing of experiences, insights and ideas through formal forums like meetings, conferences, workshops and informally through various interactions amongst employees or knowledge workers. An organization can identify key people within a department or division and maintain pointers to them through E-mail IDs or links to web pages within an Intranet or the Internet. These people can then be accessed to obtain their insights or ideas regarding a particular problem or issue. Externalization This process involves the conversion of tacit

knowledge to explicit knowledge through articulation and subsequent conversion into an explicit form like a document or a report. The ideas, insights, judgments of people could be captured through discussion, both conventional and on-line (on an Intranet or the Internet), cha group and related activities and subsequently converted into an explicit form like a document, report, discussion, and database facilitating its usage.

Dissemination This process involves transfer of knowledge within an organization. He explicit knowledge e.g. textbooks, manuals, product and process documentation could form the basis for further research and generation of articles and other explicit reports which would enable the further enrichment and sharing of knowledge. This sharing can achieve in multiple ways, the simplest of which involves the use of the corporate intranet, bulletins etc. Internalization This process envisages the conversion of explicit knowledge back to tacit knowledge enabling the knowledge workers within an organization to put the acquired knowledge into action. The knowledge accumulated by an individual by reading or understanding an explicit knowledge source like a textbook or a manual can be converted into a tacit form and subsequent shared with the organizational employees.

Organization Knowledge Management Technology Enablers: Organization can never stop learning and creating new knowledge, and hence strategies for managing organizational knowledge will continuously evolve to help address the challenges associated with fulfilling its mission, Information strategy executives observed some significant transitions over the last quarter of the twentieth century: IT, as a lever of competitive advantage. The relation between IT expenditures and the firms organizational performance can be attributed to an economic transition from an era of competitive advantage based on information to one based on knowledge creation. The earlier era was characterized b relatively slow and predictable change that could be deciphered and controlled by most formal

information systems. During this period, IS based on pre-programmed models for success were able to deliver their promises of efficiency based on optimization for given business contexts. The current highly globalized volatile and extremely competitive has necessitated a greater role for technology in leveraging the ICs within organizations. Building a robust infrastructure will allow knowledge to be leveraged through common systems and technology platforms. components of this infrastructure are as listed below: Backbone communications infrastructure A common communications infrastructure includes a standard organizational vocabulary, electronic mail, virtual private networks, and cohesive distributed systems. Access structure to information/knowledge source Knowledge, The core

whether personal or collective, has value only when it is accessible. An important aspect of knowledge creation cycles is the serendipity factor making connections with/to information that seemingly have no connection. The serendipity factor would be responsible for the creation and usage of new forms of knowledge and would contribute to the speed of its delivery throughout the organization. Organization knowledge sharing mechanisms The main challenge lies in identifying the various sources and forms of knowledge within an organization. Once forms of codified or codifiable knowledge have been identified, it is easy to make them available for dissemination and reuse. However, organizations would encounter treat difficulty in the area of experienced leverage. The common mechanisms that can be used to capture disseminate, and reuse know-how are: 1. Organizational vocabulary (taxonomy) A common organizational vocabulary provides a common context. In order to build a

common

context,

all

members

of

the

carious

identified

communities within the organization need to communities the same language. An organizational vocabulary can and will provide that context. 2. Collaboration tools Collaboration tools can be as simple as e-mail, synchronous and asynchronous discussion tools, videoconferencing, desktop video conferencing, etc. Collaborative

systems provide the ability to build and maintain a sense of community within the context of the organization as a whole, and within departments and workgroups. They also provide a mechanism for aggregating know-how nuggets and making them available to the organization as a whole.