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Faculty of Science and Technology

CBKI4103
Knowledge Management

Copyright © Open University Malaysia (OUM)


CBKI4103
KNOWLEDGE
MANAGEMENT
Dr Mohd Syazwan Abdullah

Copyright © Open University Malaysia (OUM)


Project Directors: Prof Dato’ Dr Mansor Fadzil
Assoc Prof Dr Norlia T. Goolamally
Open University Malaysia

Writer: Dr Mohd Syazwan Abdullah


Universiti Utara Malaysia

Moderator: Shahrinaz Ismail


University College Sedaya International (UCSI)

Reviewer: Hazalina Hashim


Open University Malaysia

Developed by: Centre for Instructional Design and Technology


Open University Malaysia

First Edition, December 2012


Second Edition, August 2013 (rs)

Copyright © Open University Malaysia (OUM), August 2013, CBKI4103


All rights reserved. No part of this work may be reproduced in any form or by any means
without the written permission of the President, Open University Malaysia (OUM).

Copyright © Open University Malaysia (OUM)


Table of Contents
Course Guide ix–xiii

Topic 1 Managing Knowledge 1


1.1 The Importance of Managing Knowledge 2
1.2 What is Knowledge Management? 3
1.2.1 Definition 3
1.2.2 The Need for Knowledge Management 5
1.3 Force Driving Knowledge Management 7
1.3.1 Increasing Domain Complexity 7
1.3.2 Accelerating Market Volatility 7
1.3.3 Intensified Speed of Responsiveness 8
1.3.4 Diminishing Individual Experience 8
1.4 Knowledge Management at Infosys Technologies 9
Discussion Case
Summary 11
Key Terms 12
! References 12

Topic 2 Foundation of Knowledge 15


2.1 What is Knowledge? 16
2.1.1 Definition 17
2.2 Characteristics of Knowledge 18
2.3 Alternative Views of Knowledge 19
2.4 Data, Information and Knowledge 21
2.4.1 Data 22
2.4.2 Information 23
2.4.3 Knowledge 23
2.4.4 Recursive Relationship among Data, 25
Information and Knowledge
2.5 The Knowledge Advantage 26
Summary 28
Key Terms 28
! References 29

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iv TABLE OF CONTENTS

Topic 3 Types of Knowledge 30


3.1 Organisational Knowledge 32
3.2 Tacit Knowledge 34
3.3 Explicit Knowledge 35
3.4 Tacit Knowledge versus Explicit Knowledge 36
3.5 Implicit Knowledge 38
3.6 Heuristic Knowledge 39
3.7 Declarative Knowledge 40
3.8 Procedural Knowledge 41
3.9 Knowledge Conversion – The SECI Model 42
3.10 Locations of Knowledge 47
Summary 52
Key Terms 53
References 53

Topic 4 Organisational Impact of Knowledge Management 55


and Managing Knowledge Workers
4.1 Impact on People 58
4.2 Impact on Processes 61
4.3 Impact on Products 64
4.4 Impact on Organisational Performance 67
4.5 Knowledge Worker 69
4.5.1 Core Competencies of Knowledge Workers 72
4.6 Knowledge Teams 74
4.7 Chief Knowledge Officer 75
Summary 77
Key Terms 78
References 78

Topic 5 Strategic Knowledge Management 79


5.1 Knowledge Development Phases 81
5.2 Characteristics of Knowledge 85
5.2.1 Managerial Infrastructure 85
5.2.2 Technical Infrastructure 86
5.2.3 Social Infrastructure 88
5.3 Harnessing Organisational Knowledge 89
5.4 The 5 Ps of Knowledge Management 93
5.5 Building Strategic Knowledge Management 96
Summary 99
Key Terms 100
References 100

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TABLE OF CONTENTS v

Topic 6 Knowledge Management Processes 102


6.1 Knowledge Discovery 103
6.2 Using Socialisation to Create New Tacit Knowledge 105
6.3 Using Data Mining to Create New Explicit Knowledge 105
6.3.1 Data Mining 106
6.3.2 How Data Mining Works 107
6.3.3 Data Mining Applications 107
6.4 Knowledge Capture 109
6.4.1 Capturing Knowledge 109
6.4.2 What Knowledge to Capture 110
6.5 Capturing Knowledge through Knowledge Elicitation 111
6.5.1 Basic Unstructured One-To-One Interview Process 112
6.5.2 Other Knowledge Elicitation Techniques 114
6.6 Capturing Knowledge through Stories 116
6.7 Knowledge Representation 117
6.7.1 Attribute-Value Pairs 117
6.7.2 Object-Attribute-Value Pairs 118
6.7.3 Semantic Networks 118
6.7.4 Frames 119
6.7.5 Logic 120
6.7.6 Domain Knowledge Representation 120
6.8 Knowledge Sharing 122
6.8.1 Knowledge Sharing System 122
6.8.2 Types of Knowledge Sharing System 123
6.8.3 Communities of Parties 124
6.9 Knowledge Application 126
Summary 128
Key Terms 129
References 129

Topic 7 Technological Approaches in Knowledge Management 131


7.1 Components of Knowledge Management Systems 133
7.2 The Role of Artificial Intelligence in Knowledge 136
Management
7.3 Artificial Intelligence Tools 138
7.3.1 Knowledge-based Systems 138
7.3.2 Case-Based Reasoning 139
7.3.3 Fuzzy Logic Systems 140
7.3.4 Neural Networks 141
7.3.5 Intelligent Agents 143
7.4 Knowledge Management Systems Implementation 145
7.4.1 Knowledge Management Products and Vendors 146

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vi TABLE OF CONTENTS

7.5 Integration of KMS with Other Information Systems 151


7.6 Knowledge Engineering 153
7.6.1 Knowledge Engineering Process 153
7.6.2 Knowledge Engineering as a Transfer Process 156
7.6.3 Knowledge Engineering as a Modelling Process 156
7.6.4 Process Roles in Knowledge Engineering 158
7.7 Knowledge-Based Systems Architecture, Issues, 159
Advantages and Development Process
7.7.1 Architecture 160
7.7.2 Issues in KBS in Managing Knowledge 162
7.7.3 Benefits of KBS in Managing Knowledge 163
7.7.4 Stages in KBS Development 165
Summary 169
Key Terms 170
References 170

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!

COURSE GUIDE

Copyright © Open University Malaysia (OUM)


Copyright © Open University Malaysia (OUM)
COURSE GUIDE DESCRIPTION
You must read this Course Guide carefully from the beginning to the end. It tells
you briefly what the course is about and how you can work your way through
the course material. It also suggests the amount of time you are likely to spend in
order to complete the course successfully. Please keep on referring to the Course
Guide as you go through the course material as it will help you to clarify
important study components or points that you might miss or overlook.

INTRODUCTION
Welcome to CBKI4103 Knowledge Management which is one of the courses
offered by Faculty of Information Technology and Multimedia Communication.
The course assumes that you do not have prior knowledge and experience in
knowledge management but you are encouraged to tap into your experiences as
a graduate, executive, manager, trainer, consultant, teacher and learner, and
relate them to the concepts, principles and explanation discussed. This is a three
credit hour course conducted over a semester of 15 weeks.

COURSE AUDIENCE
This course is offered to all learners from various backgrounds under Faculty of
Information Technology and Multimedia Communication programme. It is
designed for learners who want to gain and manage knowledge as individuals as
well as within the organisation. No prior knowledge in knowledge management
is required.

STUDY SCHEDULE
It is a standard OUM practice that learners accumulate 40 study hours for every
credit hour. As such, for a three-credit hour course, you are expected to spend
120 study hours. Table 1 gives an estimation of how the 120 study hours could be
accumulated.

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x COURSE GUIDE

Table 1: Estimation of Time Accumulation of Study Hours

Study
Study Activities
Hours
Briefly go through the course content and participate in initial
3
discussions

Study the module 60

Attend 3 to 5 tutorial sessions 10

Online Participation 12

Revision 15

Assignment(s), Test(s) and Examination(s) 20

TOTAL STUDY HOURS 120

COURSE OBJECTIVES
By the end of this course, you should be able to:
1.! Explain why knowledge management is important to organisations;
2.! Describe the characteristics and understanding of different types of
knowledge;
3.! Discuss the impact of knowledge management on organisation and
knowledge workers;
4.! Compare between different knowledge management processes in
managing knowledge; and
5.! Discuss the use of technology approaches in managing knowledge.

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COURSE GUIDE xi

COURSE SYNOPSIS
This course is divided into 7 topics. The synopsis for each topic is presented
below:

Topic 1 examines the importance of managing knowledge, what is knowledge


management and why knowledge management is important.

Topic 2 introduces knowledge, distinguishes knowledge from data and


information, discusses the recursive relationship among data, information and
knowledge and presents the knowledge advantage.

The first part of Topic 3 explains the major classification of knowledge, which is
organisational, tacit, explicit, implicit, heuristic, declarative and procedural
knowledge. The second part discusses the socialisation, externalisation,
combination and internalisation (SECI) knowledge conversion model.

Topic 4 presents the organisational impact of knowledge management on


people, processes, products and organisational performance. This is followed by
discussion on knowledge workers, ways of managing knowledge workers and
knowledge team.

Topic 5 examines the techniques in building organisational knowledge processes,


the development of strategic knowledge management and the phases of
organisational knowledge development. OrganisationÊs managerial, technical
and social infrastructure are discussed together with the important issues in
building strategic knowledge management.

Topic 6 focuses on knowledge management processes of knowledge discovery,


capturing, sharing, representation and application. The ways how to discover
knowledge from different sources and the means of sharing knowledge among
individuals and groups are explored.

Topic 7 examines the roles of information communication technologies as a tool


for knowledge management activities, explains how artificial intelligence
technologies have influenced these activities and the field of knowledge
engineering.

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xii COURSE GUIDE

TEXT ARRANGEMENT GUIDE


Before you go through this module, it is important that you note the text
arrangement. Understanding the text arrangement will help you to organise your
study of this course in a more objective and effective way. Generally, the text
arrangement for each topic is as follows:

Learning Outcomes: This section refers to what you should achieve after you
have completely covered a topic. As you go through each topic, you should
frequently refer to these learning outcomes. By doing this, you can continuously
gauge your understanding of the topic.

Self-Check: This component of the module is inserted at strategic locations


throughout the module. It may be inserted after one sub-section or a few sub-
sections. It usually comes in the form of a question. When you come across this
component, try to reflect on what you have already learnt thus far. By attempting
to answer the question, you should be able to gauge how well you have
understood the sub-section(s). Most of the time, the answers to the questions can
be found directly from the module itself.

Activity: Like Self-Check, the Activity component is also placed at various


locations or junctures throughout the module. This component may require you to
solve questions, explore short case studies, or conduct an observation or research.
It may even require you to evaluate a given scenario. When you come across an
Activity, you should try to reflect on what you have gathered from the module and
apply it to real situations. You should, at the same time, engage yourself in higher
order thinking where you might be required to analyse, synthesise and evaluate
instead of only having to recall and define.

Summary: You will find this component at the end of each topic. This component
helps you to recap the whole topic. By going through the summary, you should
be able to gauge your knowledge retention level. Should you find points in the
summary that you do not fully understand, it would be a good idea for you to
revisit the details in the module.

Key Terms: This component can be found at the end of each topic. You should go
through this component to remind yourself of important terms or jargon used
throughout the module. Should you find terms here that you are not able to
explain, you should look for the terms in the module.

References: The References section is where a list of relevant and useful


textbooks, journals, articles, electronic contents or sources can be found. The list
can appear in a few locations such as in the Course Guide (at the References

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COURSE GUIDE xiii

section), at the end of every topic or at the back of the module. You are
encouraged to read or refer to the suggested sources to obtain the additional
information needed and to enhance your overall understanding of the course.

PRIOR KNOWLEDGE
No prior knowledge required.

ASSESSMENT METHOD
Please refer to myINSPIRE.

COURSE MATERIALS
Becerra-Fernandez, I., Gonzalez, A., & Sabherwal, R. (2004). Knowledge
Management - Challenges, solutions, and technologies. New Jersey:
Prentice Hall.
Awad, E., & Ghaziri, H. H. (2004). Knowledge management. New Jersey:
Prentice Hall.
Debowski, S. (2006). Knowledge management. New Jersey: John Wiley &
Sons.

TAN SRI DR ABDULLAH SANUSI (TSDAS)


DIGITAL LIBRARY
The TSDAS Digital Library has a wide range of print and online resources for the
use of its learners. This comprehensive digital library, which is accessible
through the OUM portal, provides access to more than 30 online databases
comprising e-journals, e-theses, e-books and more. Examples of databases
available are EBSCOhost, ProQuest, SpringerLink, Books24x7, InfoSci Books,
Emerald Management Plus and Ebrary Electronic Books. As an OUM learner,
you are encouraged to make full use of the resources available through this
library.

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xxvi COURSE ASSIGNMENT GUIDE

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Topic Managing
1 Knowledge
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Discuss the importance of managing knowledge in organisations;
2. Define what knowledge management is and the need for it;
3. Describe the driving forces of knowledge management; and
4. Discuss how knowledge management initiatives are implemented.

INTRODUCTION

Figure 1.1: Chinese proverb

Figure 1.1 illustrates a well-known Chinese proverb. This proverb shows the
importance of knowledge for a person, as it will always be with him until
the end. Knowledge is what one seeks throughout his/her life by means of
formal or informal education, training and apprenticeship.

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2 TOPIC 1 MANAGING KNOWLEDGE

In this topic, you will learn about the following: the importance of managing
knowledge, what Knowledge Management (KM) is and why KM is important. The
topic will also touch on the driving forces of knowledge management.

ACTIVITY 1.1

Discuss the importance of knowledge in your daily life and the


motivations for you to seek knowledge.

1.1 THE IMPORTANCE OF MANAGING


KNOWLEDGE
Proper management of knowledge in organisations has become the key factor for
success in the knowledge economy. Organisations throughout the world are
engaging in knowledge management projects and strategies to harvest the value
of knowledge in order to stay competitive, build future opportunities and be
innovative. Knowledge management can be viewed as the process of
systematically managing individuals and groups and organising knowledge.

Knowledge management is an evolving trend that spans different domains such


as business, organisational studies, management, human resources and computer
technology (Argote et al., 2003). The emergence of a knowledge economy
(k-economy), business globalisation and innovative forces of technology have
combined to create a revolution that forces organisations to reinvent themselves
(Rowley, 1999; Holsapple & Jones, 2004) and this is achievable through effective
management of organisational knowledge (Garavelli et al., 2004). In recent years,
many large organisations have engaged in KM projects either to improve profits,
to be competitively innovative or simply to survive (Nonaka &Takeuchi, 1995;
Davenport & Prusak, 2000; Holsapple & Jones, 2004).

Research in the field of knowledge management concentrates mainly on finding


effective ways of managing knowledge through social and management
perspectives, as it resides in human memory; managing is seen as a human-
oriented, rather than technology-based process. However, the increasing power
and importance of information and communication technology (ICT) means that
it may now be possible to harness the capacity of such technologies to find
solutions which will be of value in managing knowledge.

The process of managing knowledge involves the execution of such actions as


knowledge gathering and acquisition, knowledge structuring, knowledge
refining and knowledge distribution (Benjamins et al., 1998; Holsapple and Jones,
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TOPIC 1 MANAGING KNOWLEDGE 3

2004). These processes are implemented using a combination of organisational,


social and managerial initiatives as well as appropriate deployment of
technology (Marwick, 2001; Moffett et al., 2004).

1.2 WHAT IS KNOWLEDGE MANAGEMENT?


This section discusses knowledge management in detail. The main emphasis here
is on the different views people have on knowledge management.

1.2.1 Definition
Although there is a strong interest from the commercial world, the term
„knowledge management‰ still suffers from a high degree of ambiguity (Hildreth
& Kimble, 2002). There is no consensus about what the term really means (Shin
et al., 2001; Salisbury, 2003; Call, 2005) and researchers are constantly attempting
to form their own definitions as shown in the work of Geng et al. (2005).

Knowledge management involves the systematic management of knowledge


resources within the organisation (Holsapple &Jones, 2004) in order to create
value from its knowledge assets (Ergazakis et al., 2005) by creating, coding,
storing, distributing and exchanging explicit knowledge using technology as an
important contributor and enabler (Davenport & Prusak, 1998; Benbya & Belbaly,
2005). Nevertheless, it is not completely technology-based as it involves
managing people, their tacit knowledge (Currie & Kerrin, 2003) and their social
interaction (Butler, 2003). Types of knowledge will be discussed in Topic 3.

As currently there is no agreed definition, and there is no prospect of one in the


near future, the following view of knowledge management (KM), based on that
offered by Sallis and Jones (2002) has been adopted in this module. KM is viewed
as „a systematic method for managing individual, group and organisational
knowledge using the appropriate means and technology. At its root it is to do
with managing people, what they know, their social interactions in performing
tasks, their decision making, the way information flows and the enterpriseÊs
work culture‰. This view represents the scope of discussion in this module.

Managing organisational knowledge has many benefits, some of which are easily
perceived and understood, while others are not. Nowadays, organisations are
mostly valued for their intellectual capital and an example of this is the widening
gap between corporate balance sheets and the perceived value of the corporation
by investors.

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4 TOPIC 1 MANAGING KNOWLEDGE

Intellectual capital is composed of human and structural capital and is the most
precious enterprise resource. Human capital refers to the body of knowledge that
the organisation owns, which resides in the minds of the employee as well as
vendors and customers. Structural capital refers to what remains when an
organisationÊs employees go home from office, which is in the form of databases,
customersÊ files, software, manuals, trademarks and others.

This can be seen in Microsoft, one of the worldÊs highest most valued company.
MicrosoftÊs worth is not only in physical assets but also in its intellectual assets in
the form of structural capital, such as copyrights, customer databases, and
software for business processes. Intellectual capital here also includes the
knowledge that resides in the mind of MicrosoftÊs employees (software
developers, researchers, product managers and academic collaborators).

Therefore, collective knowledge residing in the minds of the organisationÊs


employees, customers and vendors can be argued as the most important resource
in todayÊs enterprise. As such, knowledge management can also be seen as the
processes involved in identifying, capturing, organising and disseminating the
intellectual assets, which are crucial for the organisationÊs performance.

SELF-CHECK 1.1

1. Identify the two types of knowledge that are discussed in this section.
2. Why is there a need for knowledge to be managed?
3. Can we use technology to manage knowledge?

ACTIVITY 1.2

1. Define knowledge management based on your academic or


professional background.
2. Discuss why there can be no formal definition of knowledge
management.
3. Discuss the importance of intellectual capital for organisations.

In the next section, you will look at the need for knowledge management and
how it can help organisations. You need to understand why organisations need
to manage knowledge.

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TOPIC 1 MANAGING KNOWLEDGE 5

1.2.2 The Need for Knowledge Management


In the previous section, you were introduced to the concept of knowledge
management and intellectual capital. This section discusses why knowledge
needs to be managed and the benefits of managing (organisational)
knowledge.

Knowledge as a resource has to be managed from the following perspectives:


delivered at the right time; available at the right place; present in the right shape,
satisfying the quality requirement and obtained at the lowest possible cost
(Holsapple & Jones, 2004; Call, 2005). Organisations have undergone many
changes to the ways they operate as a result of many factors, including the shift
from industrial economy to knowledge economy and re-engineering of business
processes due to technological innovations. The focus change from products to
services has placed more emphasis on the importance of knowledge held within
organisations. Knowledge can simply be seen as the process of changing
information (structured data) and previous experience into significant
associations that can be comprehended and applied by people.

The need to manage knowledge differs between organisations as business


processes vary between them. However, most organisations need to continually
improve business process effectiveness and this is shown in the survey
conducted by the Ernst & Young Center for Business Innovation and Business
Intelligence of 431 US and European companies in 1997 (Binney, 2001; Housel &
Bell, 2001). Almost three quarters of respondents in the survey agreed that
knowledge management would be beneficial to them in:
(a) Improving decision-making processes (89%);
(b) Improving responsiveness to customers (84%);
(c) Improving efficiency of people and operations (73%);
(d) Improving innovation (73%); and
(e) Delivering better products and services (73%).

A survey of senior executives in Western Europe, conducted by the Economist


Intelligence Unit (EIU) (EIU, 2005) reported similar benefits as to what companies
hope to obtain through knowledge management projects. However,
improvement in managing knowledge about customers (65%) and business
processes and performance (46%) were found to be more important than decision
making (44%). Other main benefits reported were: effective product/service
development (41%), smoother collaboration across teams and departments (31%),

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6 TOPIC 1 MANAGING KNOWLEDGE

greater customisation of products and services (23%), improved compliance


(16%), improved corporate governance (10%), better corporate security (7%) and
improved employee loyalty and retention.

These examples clearly indicate that knowledge management needs to part of


every aspect of the enterprise to improve business efficiency and productivity.
This has resulted in knowledge emerging as the most important commodity;
what are bought and sold contain knowledge elements, and managing
knowledge has become a crucial task for organisations (Schreiber et al., 1999;
EIU, 2005).

Another important need for engaging in KM projects is to overcome the


problem of human turnover in organisations. A lifetime accumulation of facts,
events, procedures and so on is stored in personal memories that enable people
to work in and make sense of the world that surrounds them. However, with
the ending of the single-job-for-life culture, businesses lose much of that
knowledge when an individual leaves the organisation. Some have argued (e.g.
Hildreth et al., 1999) ) that this threat of "lost knowledge" is the principal driver
behind the emergence of KM. A number of authors have stated that KM
provides the answer to the problem of brain drain (Gardan & Gardan, 2003;
Lau et al., 2003; Leung et al., 2003).

You will notice several benefits of managing knowledge in this section and these are:
(a) Knowledge has become the new economic resource. Companies such as
Google and Microsoft depend on their staffÊs knowledge for developing
software.
(b) Improves organisational decision making as better and improved decisions
are made.
(c) Knowledge enables organisation to be innovative and innovation provides a
competitive edge.
(d) Improves collaboration between people and teams in an organisation.
(e) Improved business processes.

SELF-CHECK 1.2
1. What are the important perspectives on knowledge as a resource?
2. Why are there differences in the need to manage knowledge
between organisations?
3. What is meant by innovation and being innovative?

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TOPIC 1 MANAGING KNOWLEDGE 7

In this section, you have studied the need to manage knowledge and the
associated benefits of managing it well. In the next section, you will learn about
the forces driving knowledge management.

1.3 FORCES DRIVING KNOWLEDGE


MANAGEMENT
Nowadays, an organisationÊs decision makers are highly dependent on input
from several domains to make critical decisions. Ideal decision makers have
comprehensive understanding of the specific domains they work with. That
understanding enables them to act quickly and decisively on the information
obtained. The reason for this is that decision making has become more complex
over the years and employees are expected to perform under various
circumstances. The following trends of increasing domain complexity,
accelerating market volatility, intensified speed of responsiveness and
diminishing individual experience are considered as vital forces that drive
knowledge management (Becerra-Fernandez, Gonzalez & Sabherwal, 2004).
Sections 1.3.1 to 1.3.4 will explain this in detail.

1.3.1 Increasing Domain Complexity


Domain knowledge is getting more complex and as a result, the complexity of
the knowledge required to carry out specific business process tasks has
increased. The rise in complexity is attributed to the state of the internal and
external processes, increased competition, and rapid advancement of technology.
In the case of new product development, participation and collaboration from
different organisational units, such as finance, marketing, human resources,
engineering and others, are required. Consequently, organisations need to recruit
people who are not only academically excellent but are equally competent in
communication and team skills. Such skills will make knowledge sharing
possible between employees of the organisation and achieve shorter cycles for
new product development, as well as facilitate and manage organisational
innovation.

1.3.2 Accelerating Market Volatility


The pace of change within each market domain has increased rapidly over the
years. Organisations operate in ever changing market and environment
surroundings, which require them to easily adapt to these changes. Corporate
announcement of missed financial targets can be damaging to the companyÊs
stock price and the whole industry. Survival in such volatile markets requires

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8 TOPIC 1 MANAGING KNOWLEDGE

knowledge about the market, and sharing this knowledge among decision
makers will enable them to react quickly to adverse market effects on the
organisationÊs stock prices.

1.3.3 Intensified Speed of Responsiveness


The time needed to carry out action based on subtle changes within and across
domains is reduced rapidly due to advancements in technology. This changes the
decision-making process as timely decisions are needed to be implemented
quickly to grab the opportunities that are available. For example, in the past,
many decision-making activities required adequate processing time, which give
stakeholders a „comfort zone‰ in decision making. The time taken to respond to
a customerÊs inquiry would typically consist of several actions such as receiving
inquiry, obtaining managerÊs permission, getting quotation from finance,
preparing the proposal and other tasks performed by several people in the
organisation. However, with the invention of the internet, intranet and extranet,
these processes can be done simultaneously at the speed of light. Newer
development in information communication technologies also enable employees
to collaborate, communicate, share files, synchronise schedules and perform
other tasks faster and move accurately.

1.3.4 Diminishing Individual Experience


Organisations these days experience high employee turnover rates and this has
resulted in employees with decision-making authority having less tenure within
the organisations than ever before. Frequent changes in trends have resulted in
the experience of experienced decision makers becoming irrelevant to current
decisions that need to be made. A major result of these trends is that there are
now decision makers with immature intuition due to the complexity of the
domain and lack of experience. They are also less able to withstand external
pressures and to respond quickly to make clear and correct decisions. The
swiftness in implementing actions based on the decisions made allows for little
market tolerance for wrong or ambiguous decisions. Increased complexity, a
volatile market and accelerated responsiveness make younger managers feel less
adequate in making difficult decisions daily. As the knowledge required for
making good decisions cannot be learned by individual decision makers, there is
a need to provide them with the necessary knowledge for making correct and
timely decisions.

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TOPIC 1 MANAGING KNOWLEDGE 9

ACTIVITY 1.3

1. Discuss how these forces driving knowledge management can


affect the organisationÊs decision-making process.
2. List three reasons domain knowledge is important as a source of
competitive advantage among competitiors.
3. Identify the types or categories of domain knowledge in your field.
4. Discuss the importance of collaboration as a way of sharing
knowledge.
5. Explain why companies are experiencing high employee turnover
rates.

1.4 KNOWLEDGE MANAGEMENT AT INFOSYS


TECHNOLOGIES – DISCUSSION CASE
In this section, we will discuss how knowledge is managed at Infosys
Technologies.

(a) The Problem


A global software services company based in India, Infosys Technologies, is
a worldwide leader in outsourcing. With over 23,000 employees and
globally distributed operations, Infosys develops IT solutions for some of
the largest corporations in the world. During the past 10 years, Infosys has
experienced a 30 percent annual growth rate. Infosys faced a challenge in
keeping its large employee base up-to-date and ahead of both its
competitors and clients, and ensuring that the lessons learned in one part of
the organisation were available to other parts. A member of the knowledge
management (KM) group said: „An IT company like ours cannot survive if
we donÊt have mechanisms to reuse the knowledge that we create⁄ÊLearn
once, use everywhereÊ is our motto.‰ The vision is that every instance of
learning should be available to every employee; but how does an
organisation turn such a vision into reality?

(b) The Solution


Infosys TechnologiesÊ effort to convert each employeeÊs knowledge into an
organisational resource began in the early 1990s and extended well into the
first decade of 2000. In the early 1990s, Infosys launched its bodies of
knowledge (BOK) initiative. This involved encouraging employees to
provide a written account of their experiences across various topics, such as

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10 TOPIC 1 MANAGING KNOWLEDGE

technologies, software development and living abroad. These were shared in


hard-copy form with all other employees. This early effort ballooned into a
full-fledged KM effort supported by e-mail, bulletin boards and various
knowledge repositories. In 1996, a corporate intranet was developed to make
BOKs, in the HTML format, easily accessible to all. In 1999, Infosys began an
organisation-wide programme to integrate the various knowledge initiatives.
A central knowledge portal, called KShop, was created and while the KM
group developed the technological infrastructure, local groups were
encouraged to maintain their own content on KShop.

The content of KShop consisted of different content types – BOKs, case


studies, reusable artefacts and downloadable software – each with its own
homepage. The content was carefully categorised by the KM group to
ensure that as the amount of content increased, it would still be possible for
people to quickly find what they needed.

In early 2000, Infosys appeared to have a very functional KM system, yet


patronage by employees remained low. The KM group then initiated a
reward scheme to increase participation. The scheme gave employees who
contributed to KShop knowledge currency units (KCUs) that could be
accumulated and exchanged for monetary rewards or prizes.

(c) The Results


Within a year of the introduction of the KCU scheme, 2,400 new knowledge
assets had been contributed to KShop by some 20 percent of InfosysÊ
employees. However, as the volume of content increased, so too did the
problems relating to finding useful information. Moreover, the heavy
growth in contributions taxed the limited number of volunteer reviewers,
who served an important quality control function. The KM group then
modified the KCU incentive scheme. It developed a new KCU scheme that
rated the usefulness of the knowledge from the perspectives of the users of
the knowledge, rather than the reviewers. To increase accountability, the
KM group requested tangible proof to justify any high ratings. Finally, the
KM group raised the bar for cashing in KCU points for monetary rewards.
Source: Turban, Leidner, McLean & Wetherbe, (2007)

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TOPIC 1 MANAGING KNOWLEDGE 11

ACTIVITY 1.4
Activity 1.4
1. Give three reasons for Infosys Technologies to manage its
employeesÊ knowledge.
2. Justify why the management should reward participants for
sharing knowledge in an organisation.
3. Discuss why people do not want to share their knowledge with
others.
4. Knowledge management initiatives involve technology and non-
technology implementation. Elaborate this statement.
5. Implementing a knowledge management initiative involves
creative thinking. Do you agree with this statement?

ACTIVITY 1.5
Activity 1.4
1. Discuss the basic knowledge management practices that you have
done. For example, having a template for letter writing in soft
copy.
2. Discuss some knowledge management books and articles that you
have read before.
3. Make up a working definition for the following terms:
(a) Knowledge
(b) Domain knowledge
(c) Intellectual capital

Knowledge is an important resource that needs to be managed systematically


to harness its value.

Knowledge management is the umbrella concept used to refer to activities of


managing knowledge.

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12 TOPIC 1 MANAGING KNOWLEDGE

There exist many definitions of knowledge management as different people


have different views on knowledge. The basic view is that it involves
managing individuals and groups and organising knowledge using
appropriate tools and techniques.

Benefits of managing knowledge are improved decisions, better


collaboration between employees, improved leaner business processes,
encourages innovations and others.

The forces driving knowledge management in organisations are increasing


domain complexity, accelerating market volatility, intensified speed of
responsiveness and diminishing individual experience.

Collaboration Intellectual capital


Decision makers Knowledge
Domain knowledge Knowledge management
Human capital Structural capital
Innovation

Argote, L., McEvily, B., & Reagans, R. (2003). Introduction to the special issues on
managing knowledge in organisations: Creating, retaining, and transferring
knowledge. Management science, 46(4), v–viii.
Becerra-Fernandez, I., Gonzalez, A., & Sabherwal, R. (2004). Knowledge
management – challenges, solutions, and technologies. New Jersey: Prentice
Hall.
Benbya, H., & Belbaly, N. A. (2005). Mechanisms for knowledge management
systems effectiveness: An exploratory analysis. Knowledge and process
management, 12(3), 201–216.
Benjamins, R.V., Fensel, D., & Perez-Gomez, A. (1998, October). Knowledge
management through ontologies. Second international conference on
practical aspects of knowledge management (PAKM'98). Basel, Switzerland.

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TOPIC 1 MANAGING KNOWLEDGE 13

Binney, D. (2001). The knowledge management spectrum – understanding the


KM landscape. Journal of knowledge management, 5 (1), 33–42.
Butler, T. (2003). From data to knowledge and back again: Understanding the
limitations of KMS. Knowledge and process management, 10(3), 144–155.
Currie, G., & Kerrin, M. (2003). Human resources management and knowledge
management: Enhancing knowledge sharing in a pharmaceutical company.
International journal of human resource management, 24(6), 1027–1045.
Davenport, T. H., & Prusak, L. (1998). Working knowledge: Managing what your
organisation knows. Harvard Business School Press: Massachusetts.
Davenport, T. H., & Prusak, L. (2000). Working knowledge: How organisations
manage what they know. Harvard Business School Press: Massachusetts.
Economic Intelligent Unit (2005). Know how: Managing knowledge for
competitive advantage, economic intelligence unit – The Economist.
Retrieved December 14, 2012 from http://www.eiu.com.
Ergazakis, K., Karnezis, K., Metaxiotis, K., & Psarras, I. (2005). Knowledge
management in enterprises: A research agenda. Intelligent systems in
accounting, finance and management, 13(1), 17–26.
Garavelli, C., Gorgoglione, M., & Scozzi, B. (2004). Knowledge management
strategy and organisation: A perspective of analysis. Knowledge and process
management, 11(4), 273–282.
Gardan, N., & Gardan, Y. (2003). An application of knowledge based modelling
using scripts. Expert system with applications. 25(4), 555–568.
Geng, Q., Townley, C., Huang, J., & Zhang, J. (2005). Comparative knowledge
management: A pilot study of Chinese and American universities. Journal of
the American society for information science and technology, 56(10), 1031–
1044.
Hildreth, P., & Kimble, C. (2002). The duality of knowledge, information
research. 8(1), Paper no. 142. Retrieved December 14, 2012 from
http://informationr.net/ir/8–1/paper142.html.
Hildreth, P., Wright, P., & Kimble, C. (1999, April). Knowledge management:
Are we missing something. 4th UKAIS Conference, University of
York, UK.
Holsapple, C. W., & Jones, K. (2004). Exploring primary activities of the
knowledge chain. Knowledge and process management, 11(3), 155–174.
Housel, T., & Bell, A. H. (2001). Measuring and managing knowledge. McGraw-
Hill Irwin: New York.

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14 TOPIC 1 MANAGING KNOWLEDGE

Lau, H. C. W., Wong, C. W. Y., Hui, I. K., & Pun, K. F. (2003). Design and
implementation of an integrated knowledge system. Knowledge based
systems, 16(2), 69–76.
Leung, R. W. K., Lau, H. C. W., & Kwong, C. K. (2003). An expert system to
support the optimisation of ion plating process: An OLAP-based fuzzy-cum-
GA approach. Expert systems with applications, 25(3), 313–330.
Marwick, A. D. (2001). Knowledge management technology. IBM systems
journal, 40(4), 814–830.
Moffett, S., McAdam, R., & Parkinson, S. (2004). Technology utilisation for
knowledge management. Knowledge and process management, 11(3), 75–184.
Nonaka, I., & Takeuchi, H. (1995). The knowledge creating company: How
Japanese companies create the dynamics of innovation. Oxford University
Press: Cambridge.
Rowley, J. (1999). What is knowledge management? Library management, 20(8),
416–419.
Sallis, E., & Jones, G. (2002). Knowledge management in education: Enhancing
learning & education. Kogan Page: Boston.
Schreiber, G., Akkermans, H., Anjewierden, A., de Hoog, R., Shadbolt, N., de
Velde, W. V., & Wielinga, B. (1999). Knowledge engineering and
management: The CommonKADS methodology. MIT Press: Cambridge.
Shin, M., Holden, T., & Schmidt, R. A. (2001). From knowledge theory to
management practice: Towards an integrated approach. Information
processing & management, 37(2), 335–355.
Turban, E., Leidner, D., McLean, E., & Wetherbe, J. (2007). Information
technology for management: Transforming organisations in the digital
economy. John Wiley & Sons: New Jersey.
Salisbury, M. W. (2003). Putting theory into practice to build knowledge
management systems. Journal of Knowledge Management, 7(2), 128–141.
Call, D. (2005). Knowledge management – not rocket science. Journal of
Knowledge Management, 9(2), 19–30.

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Topic  Foundation
2 of Knowledge

LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Define knowledge;
2. Discuss the characteristics of knowledge;
3. Present different views of knowledge;
4. Discuss the data, information and knowledge hierarchy; and
\ 5. Explain knowledge advantage.

INTRODUCTION

True knowledge exists in knowing that you know nothing. And in knowing
that you know nothing, that makes you the smartest of all.

Socrates

Men are four:


He who knows not and knows not he knows not, he is a fool – shun him;
He who knows not and knows he knows not, he is simple – teach him;
He who knows and knows not he knows, he is asleep – wake him;
He who knows and knows he knows, he is wise – follow him!

Arabian proverb

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16 TOPIC 2 FOUNDATION OF KNOWLEDGE

These sayings show that to gain knowledge, one must be willing to learn what is
unknown to him, and knowledge is what we seek that will lead us to wisdom.

In the previous topic, you were introduced to the concept of knowledge


management and why we need to manage it well. This topic will explain the
characteristics of knowledge from the knowledge management perspective and
the alternative views of knowledge. The topic will also discuss knowledge and
distinguish it from data and information. These three concepts will be illustrated
using some easy to understand examples. This is followed by discussions on the
recursive relationship among data, information and knowledge. The topic ends
with discussion on knowledge advantage.

ACTIVITY 2.1

1. What is knowledge? In your own words, what is your


understanding of knowledge?
2. Why do you need knowledge?
3. When do you use knowledge?
4. Who uses knowledge?
5. How do we get knowledge?

2.1 WHAT IS KNOWLEDGE?


Dueck (2001) believes that different views of knowledge are associated with
personality types. He believes that a personÊs temperament determines his view
of knowledge. Therefore, a personÊs answer to the question ‰What is
knowledge?‰ is strongly related to the answer to „Who am I?‰.

The nature of knowledge is widely studied in the area of epistemology (Ayer,


1964; Gettier, 1963) – a branch of philosophy – and in the area of artificial
intelligence through knowledge representation (Davis et al., 1993; Mylopoulos,
1980). As such, there are many definitions of knowledge from these and various
other areas such as cognitive science, management, theology and knowledge
engineering. However, most of these definitions are very specific to the context of
the area in which they are used.

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TOPIC 2 FOUNDATION OF KNOWLEDGE 17

Ancient Greeks have distinguished four kinds of knowledge (Baumard, 1994),


which are very useful in understanding knowledge:
(a) Episteme – Abstract generalisations, basis and essence of sciences;
scientific laws and principles.
(b) Techne – Technical know-how, how to get things done, working
manuals, standard operating procedures and communities
of practice.
(c) Phronesis – Practical wisdom gained from social practices over the
years.
(d) Metis – A type of knowledge which is at the opposite end of meta
physics that has no quest for the ideal but for practical end.
This is knowledge which is embodied, incarnated and
essential.

2.1.1 Definition
Here, you will look at three different definitions of knowledge through different
perspectives: general perspective, knowledge management (KM) perspective and
knowledge engineering perspective. There exist other perspectives but our
discussion is limited to these as we are interested in interpreting knowledge from
the knowledge management scope.

The Oxford English Dictionary defines knowledge as: (1) Information and skills
acquired through experience or education; (2) The sum of what is known; and
(3) Awareness or familiarity gained by experience of a fact or situation.

From the KM perspective, Davenport and Prusak (2000) said the following:

„Knowledge is a fluid mix of framed experiences, values, contextual


information, and expert insight that provides a framework for evaluating and
incorporating new experiences and information. It originates and is applied in
the minds of knowers. In organisations, it often becomes embedded not only
in documents or repositories but also in organisational routines, processes,
practices, and norms‰.

Schreiber et al. (1999), on the other hand, taking a knowledge engineering (KE)
perspective, defines knowledge as that which „is the whole body of data and
information that people bring to bear to practical use in action, in order to carry
out tasks and create new information. Knowledge adds two distinct aspects: first,

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18 TOPIC 2 FOUNDATION OF KNOWLEDGE

a sense of purpose, since knowledge is the Âintellectual machineryÊ used to


achieve a goal; second, a generative capability, because one of the major
functions of knowledge is to produce new information. It is not accidental,
therefore, that knowledge is proclaimed to be a new Âfactor of productionʉ.

Although all three definitions provide a different meaning for knowledge, in


principle they focus on its importance as a resource that needs to be managed
effectively and efficiently.

SELF-CHECK 2.1

1. What is knowledge?
2. What are the four kinds of knowledge defined by the Greeks?

ACTIVITY 2.2

1. Define knowledge from a learnerÊs point of view.


2. Discuss the four kinds of knowledge defined by the Greeks.
3. How would you rank them? Explain.

2.2 CHARACTERISTICS OF KNOWLEGDE


There are many characteristics of knowledge discussed in literature. One
important discussion was made by Wigg et al. (1997). They identified some of the
important characteristics of knowledge that make it distinct from other resources
used in an organisation. These are as follows:
(a) Knowledge is intangible and difficult to measure. Knowledge has no shape,
form, colour or taste. Since knowledge is intangible, it cannot be counted;
thus, we cannot measure it directly with common measurement scales.
(b) Knowledge is volatile, that is, it can „disappear‰ overnight. Knowledge is in
the form of human memory and if the person leaves the organisation, the
knowledge is gone.
(c) Knowledge is, most of the time, embodied in agents with wills. Knowledge
belongs to individuals and its usage is dependent on the actions of its
owners.

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TOPIC 2 FOUNDATION OF KNOWLEDGE 19

(d) Knowledge is not „consumed‰ in a process; sometimes, it increases through


use. When knowledge is used in any process, it is only applied to that
process without losing any of its original value. The only effect is that new
knowledge can at times be attained when knowledge is used, which is
added to the existing knowledge.
(e) Knowledge has a wide-ranging impact within organisations. Knowledge is
the source of power as critical decisions made by an organisationÊs decision
makers and management are based on it. Whoever has the knowledge is
regarded as the important person in that organisation.
(f) Knowledge cannot be bought in the market place at any time; it often has
long lead times. Knowledge is not a commodity that can be bought or sold,
and it cannot be attained within a short period. Knowledge can only be
attained through the learning process.
(g) Knowledge is „non-rival‰; it can be used by different processes at the same
time. Unlike conventional resources that are limited to a single process at a
time, the same knowledge can be applied for various processes at the same
time.

2.3 ALTERNATIVE VIEWS OF KNOWLEDGE


There exist alternative views of knowledge as it can be viewed from a subjective
or objective point of view (Becerra-Fernandez, Gonzales & Sabherwal, 2004). The
subjective view represents knowledge as a state of mind or a practice. The
objective view sees knowledge as an object, as an access to information or as a
capability. You will first learn about the subjective view, followed by the
objective view.

(a) Subjective View of Knowledge


In the subjective view, reality is socially constructed interactions with
individuals. Knowledge is seen as a continuous accomplishment that is
constantly influenced by social interactions and practices among people. As
a result, knowledge can be anywhere at any time as its existence is
dependent on social practices and human experiences. In the subjective
view, knowledge is regarded as a state of mind or practice.

(i) Knowledge as a State of Mind


Here, knowledge is considered as a state in the personÊs mind. In the
context of organisational knowledge, it is the collective beliefs of
individuals within an organisation. However, the beliefs of people
vary as they have different backgrounds and experiences in life which

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20 TOPIC 2 FOUNDATION OF KNOWLEDGE

influence their knowledge. The important thrust here is motivating


individuals to enhance their personal areas of knowledge to achieve
the organisationÊs goals.

(ii) Knowledge as Practice


In this perspective, knowledge is considered as subjective but is
thought of as belonging to a group and cannot be broken down into
components held by individuals. Therefore, knowledge from this
perspective does not belong to any particular individual nor is it
contained in any single repository. Furthermore, it is believed that
knowledge is not in oneÊs head but in practice. Here, knowledge is
considered as collective beliefs rather than individual beliefs, and as a
result, knowledge is apparent in the organisational activities than in
the minds of individual employees.

(b) Objective View of Knowledge


The objective view is in direct opposition to the subjective view. In the
objective view, reality is not influenced by human perceptions and can be
structured into different categories and concepts. As a result, knowledge
can be in the form of an object or a capability, which can be learned and
improved by people. The objective view has three possible perspectives –
knowledge as an object, knowledge as access to information and
knowledge as capability.

(i) Knowledge as an Object


Knowledge is something that can be stored, removed from one place
or person and manipulated. This view is consistent with the definition
of knowledge as a set of justified beliefs, and these beliefs (or
knowledge objects) can be in many places.

(ii) Knowledge as Access to Information


Knowledge is considered as the condition of access to information
sources. Here, knowledge enables access and utilisation of
information and therefore extends the previous view of knowledge as
an object by emphasising the accessibility of this object.

(iii) Knowledge as Capability


The view of knowledge as capability is in line with the perspective of
knowledge as an object or access to information. However, this
perspective focuses on the ways that knowledge can be used to
influence action. In this perspective, knowledge is considered as a
strategic capability that has potential to be used for gaining
competitive advantages.

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TOPIC 2 FOUNDATION OF KNOWLEDGE 21

The different perspectives discussed are different on their focus in viewing


knowledge, but they all agree that knowledge is a set of beliefs about
relationship. All these perspectives are important as they provide different ways
of investigating knowledge. However, the objective view is generally preferred
by knowledge management researchers compared to the subjective view which is
popular among philosophers.

ACTIVITY 2.3

1. Compare the subjective view of knowledge with the objective view.


2. Differentiate these views from the four kinds of knowledge of
the Greeks.

2.4 DATA, INFORMATION AND KNOWLEDGE


In literature on KM, there is much debate on what constitutes knowledge, what
data is and what information is. Researchers such as Davenport and Prusak
(1998) believe it is of no use to spend time and energy trying to establish a
universal formula on knowledge. It is much more important to comprehend the
relevant issues concerning knowledge in organisations and manage them
effectively. Nonaka and Takeuchi (1995) stress that the important work in the
area of knowledge management should focus on knowledge creation activities
and not on knowledge itself.

Knowledge is different from data and information, although these three terms
are often used interchangeably. To understand the difference among data,
information and knowledge, you need to analyse them in greater detail.
Figure 2.1 presents the transition from data to information, information to
knowledge, and knowledge to wisdom, which are supported by understanding
during the transition between stages.

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22 TOPIC 2 FOUNDATION OF KNOWLEDGE

Figure 2.1: Hierarchy of knowledge

Sections 2.4.1 to 2.4.3 will elaborate in detail on what data, information and
knowledge are. You should pay special attention to this section as our discussion
and understanding of knowledge is based on this data-information and knowledge
relationship, which is widely adopted in the computer science field.

2.4.1 Data
Data can be defined as a set of discrete facts about events. It may comprise facts,
observations or perceptions (both right and wrong), elementary descriptions of
things, events and activities. Data is commonly perceived as potential
information and is more objective and tangible compared to information and
data. Data represents numbers, alphanumeric figures, sounds or images that
have no context, meaning or intent. Data does not make much sense by itself and
is of no value to anyone and does not provide any information about its
relevance. Although data has no context, meaning or intent, it can be captured
without trouble, stored in databases (consisting of stored data organised for
retrieval), and communicated using electronic or other media. The following two
examples discuss data, and will be built up further for the discussion on
information and knowledge in the later part:

Example 1: A car dealerÊs sales order for two Proton Persona and one Proton
Waja cars is an example of data.

Example 2: Observation of cars passing through a toll booth on a highway is also


an illustration of data.

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TOPIC 2 FOUNDATION OF KNOWLEDGE 23

2.4.2 Information
Information is organised data that has meaning, possesses context, is relevant
and is of value to the recipient. Information usually involves the manipulation of
raw data to get a more meaningful indication of trends or patterns in the data.
The recipient interprets the meaning and draws conclusions and implications
from the data. Data are usually processed into information using application, and
this processing shows a more specific use and a higher value added than simple
retrieval from a database.

The following two examples continue from the previous examples of data:

Example 1: For the manager of the car dealer company, the numbers showing the
daily car sales of different models are regarded as information.

Example 2: The numbers of cars passing through the toll booth aggregated into
different time periods or days that support the decision-making process are
regarded as information.

Based on these examples, whether some facts are considered information or just
data depends on the person using those facts. The facts about the daily car sales
represent information for the manager but for the customer it is just data. If the
car dealer company is one out of a chain of 35 dealers, these facts about the daily
sales are only data for the top management of the company. As such, it can be
said that any information that is of no use to a person is just data for them.

2.4.3 Knowledge
Knowledge consists of organised and processed data and/or information that is
used to communicate understanding, experience, accumulated learning and
expertise as they are used to current problem or activities. Knowledge can also
be seen as highly contextualised information made more meaningful by adding
individual expertise and interpretation in order to perform tasks or create new
information. Knowledge also adds two distinct aspects to information: first, a
sense of purpose as knowledge is applied to achieve a goal; and second, a
generative capability, as one of the important roles of knowledge is to produce
new information. One way knowledge is captured is by reading and
understanding information.

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24 TOPIC 2 FOUNDATION OF KNOWLEDGE

Example 1: The daily sales of cars and other information such as market interest
rates for car loans can help the management to decide on running special
promotions during festive seasons such as Hari Raya and Chinese New Year.
Understanding the relationship between the number of cars sold, interest rates
and the effect of festive promotions is considered as knowledge about car sales.

Example 2: The aggregated information about the number of cars going through
the toll booth, information about staff schedule and long weekend breaks will
assist the management in making decisions about overtime work for staff.
Knowing the relationship between these factors and other factors such as school
holidays in determining the overtime schedule is the act of knowledge of the
manager.

Knowledge helps produce information based on data or more valuable


information from less valuable data. Here, this information makes it easy for action
to be performed, such as the decision to have a promotion or to approve overtime.
Based on the newly derived information, the management of the car dealer
company can decide whether or not to have a promotion during a festive season.

This nature of relationship between data and information (Becerra-Fernandez,


Gonzales & Sabherwal, 2004) is shown in Figure 2.2. It presents the relationship
between data (that has zero or no value in the decision-making process)
compared to information (that has greater value than data, although the values
are likely to be different and dependent on the types of information).

Knowledge

Value
Zero Low Medium High Very High

Data Information

Figure 2.2: Data, information and knowledge


Source: Becerra-Fernandez, Gonzales & Sabherwal, (2004)

Many organisations that try to implement a knowledge management project


usually find it hard to differentiate information from knowledge. How do we
trace out information requirements from knowledge requirements? There is no
simple answer for this. However, there are two simple rules of thumb suggested
by Natarajan and Shekhar (2000) and these are:

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TOPIC 2 FOUNDATION OF KNOWLEDGE 25

(a) Information is independent of a person. Knowledge is specific to a person.


(b) Knowledge is always contextual. It should not be used, interpreted or
applied without knowing its context

This is one of the reasons why there is no unilateral classification of any entity
either as information or knowledge. Section 2.4.4 elaborates on this view.

2.4.4 Recursive Relationship among Data,


Information and Knowledge
Bhatt (2001) suggested that data, information and knowledge have a recursive
relationship, and their definitions are dependent on the degree of „organisation‰
and the „interpretation‰; this is illustrated in Figure 2.3. The „organisation‰
element is used to differentiate between data and information, where
information and knowledge are separated by means of „interpretation‰.

Figure 2.3: The recursive relationship among data, information and knowledge
Source: Bhatt, (2001)

The main reason the relationship among data, information and knowledge is
recursive lies in the basic fact that all of them are interrelated through the input-
process-output (IPO) concept in an information system. In the IPO concept, an
output of a process can also become an input to another process. Information for
one person might just be data for another person, and knowledge for one person
might just be information for another. This argument is similar to the one given
by Schreiber et al. (1999), who suggested that the three views (data, information
and knowledge) are interrelated and are very much dependent on the „context‰
of the viewer.

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26 TOPIC 2 FOUNDATION OF KNOWLEDGE

ACTIVITY 2.4

1. Give two examples of data, information and knowledge.


2. Discuss why understanding is important in the hierarchy of
knowledge.
3. Differentiate between understanding relations and patterns.
4. Why is the value of knowledge dependent on the greater value
of data?
5. Justify the recursive relationship among data, information and
knowledge.

SELF-CHECK 2.2

1. What are the differences between data and information?


2. Why is knowledge of higher hierarchy than information?
3. What is meant by knowledge?
4. Where and how can data be captured?
5. What is the reason for the recursive relationship to be
associated with the IPO process?

2.5 THE KNOWLEDGE ADVANTAGE


What are the knowledge advantages for organisations engaging in knowledge
management initiatives? How can organisations apply knowledge to obtain
strategic advantage over their competitors? A simple answer to these questions
lies in generating greater value through knowledge in products, people and
processes (Skyrme, 2000).

(a) Knowledge in Products


These days, there are certain products labelled as „intelligent‰ or „smart‰
products that usually fetch premium prices in the market and are more
useful to users. One example of such products is the intelligent driving
system that provides additional comfort and safety when driving, which are

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TOPIC 2 FOUNDATION OF KNOWLEDGE 27

available in new models of BMW cars sold at premium prices. This allows
BMW to showcase its superior technology and compete for a bigger market
share in the luxury car market segment with Mercedes Benz and Volvo.

(b) Knowledge in People


Employees are nowadays regarded as an organisationÊs most valuable asset,
although this may not be true all the time. For organisations such as software
houses, their employeeÊs knowledge is utilised in developing software that
are sold to customers. Investing in people through training and staff
development nurture knowledge in people and enable employers to harness
their staffÊs full potential in developing software and many other areas.

(c) Knowledge in Process


In many organisations, there are often variances in the performance level of
3:1 or more among different groups of workers undertaking the same
process. Reducing such a gap saved Texas Instruments the cost of one new
semiconductor fabrication plant, which is a US$1 billion investment.

ACTIVITY 2.5
1. Knowledge in people plays an important role in managing
knowledge. Discuss.
2. Explain why knowledge in process is important in streamlining
business processes and cost savings.
3. Explain why „intelligent/smart‰ products are in demand.
4. Justify why „intelligent/smart‰ products are worth their prices.

ACTIVITY 2.6

1. Discuss the basic knowledge that you have learned so far from this
topic.
2. Make up working definitions for the following terms:
(a) Knowledge
(b) Data
(c) Information
3. Review why understanding relations and patterns would change
the hierarchy of knowledge.

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28 TOPIC 2 FOUNDATION OF KNOWLEDGE

• Knowledge is widely studied in many areas such as philosophy, theology,


management, cognitive science, knowledge engineering and others.

• Ancient Greeks have differentiated four kinds of knowledge: episteme


(general knowledge), techne (technical know-how), phronesis (practical
wisdom) and metis (embodied, incarnated and essential knowledge).

• There exist many definitions of knowledge from several domains, and there
is no consensus of what knowledge is. The definitions are highly dependent
on how the community in that domain view knowledge.

• Knowledge has several characteristics among which are: tangible, difficult to


measure, volatile, embodied in people with wills, not used by processes,
influence decision making, cannot be traded and can be used by different
processes at the same time.

• There are alternative views of knowledge, which are subjective and objective.
The subjective view represents knowledge from the outlook of state of mind
and practice. The objective view sees knowledge from the outlook of an
object, an access to information or as a capability.

• Data is unfiltered information with no added meaning; but once it is


structured, it becomes information. Knowledge is derived when information
is interpreted in a particular context and has meaning added to it.

• There is a recursive relationship among data, information and knowledge as


all of these are interrelated through input-process-output (IPO) processes.

Data Knowledge
Information Understanding patterns
Know-how Understanding relations

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TOPIC 2 FOUNDATION OF KNOWLEDGE 29

Ayer, A. J. (1964). The problem of knowledge. Pelican Book.


Baumard, P. (1994). Oblique knowledge: The clandestine work of organisations,
DMPS 228, University de Paris-Dauphine. Retrieved from www.cergam.org/
fikadmin/files/cerog/cv/baumard/pages/oblique_knowledge.pdf.
Becerra-Fernandez, I., Gonzalez, A., & Sabherwal, R. (2004). Knowledge
management – Challenges, solutions, and technologies. New Jersey:
Prentice Hall.
Bhatt, G. D. (2001). Knowledge management in organisations: examining the
interactions between technologies, techniques and people. Journal of
knowledge management, 5(1), 68–75.
Davenport, T. H., & Prusak, L. (1998). Working knowledge: Managing what your
organisation knows. Harvard Business School Press: Massachusetts.
Davenport, T. H., & Prusak, L. (2000). Working knowledge: How organisations
manage what they know. Harvard Business School Press: Massachusetts.
Davis, R., Shrobe, H., & Szolovits, P. (1993). What is a knowledge representation?
AI Magazine, 14(1):17–33.
Dueck, G. (2001). Views of knowledge are human views. IBM Systems Journal,
40(4), 885–888.
Gettier, E. (1963). Is justified true belief knowledge? Analysis, 23, 121–123.
Mylopoulos, J. (1980, June) An overview of knowledge representation. Workshop
on data abstraction, databases and conceptual modelling. Pingree Park,
Colorado.
Natarajan, S., & Shekhar, S. (2000). Knowledge management: Enabling business
growth. New Delhi: McGraw-Hill.
Nonaka, I., & Takeuchi, H. (1995). The knowledge creating company: How
Japanese companies create the dynamics of innovation. Oxford University
Press: Cambridge.
Schreiber, G., Akkermans, H., Anjewierden, A., de Hoog, R., Shadbolt, N.,
de Velde, W.V., & Wielinga, B. (1999). Knowledge engineering and
management: The CommonKADS methodology. MIT Press: Cambridge.
Skyrme, D. J. (2000). Knowledge networking: Creating the collaborative
enterprise. Oxford: Butterworth-Heinemann.
Wigg, K. M. (1997). Knowledge management: An introduction and prespective.
Journal of Knowledge Management, 1(1), 6–14.
Copyright © Open University Malaysia (OUM)
Topic  Types of
3 Knowledge
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Identify the major classification of knowledge;
2. Recognise different types of knowledge;
3. Discuss the knowledge conversion model; and
4. Describe the advantages and disadvantages of knowledge
conversion.
\

INTRODUCTION

A little knowledge that acts is worth infinitely more than


much knowledge that is idle.

Kahlil Gibran

Any piece of knowledge I acquire today has a value at this moment exactly
proportioned to my skill to deal with it. Tomorrow, when I know more, I
recall that piece of knowledge and use it better.

Mark Van Doren

We must learn our limits. We are all something, but none of us are
everything.

Blaise Pascal
Copyright © Open University Malaysia (OUM)
TOPIC 3 TYPES OF KNOWLEDGE 31

These proverbs show that knowledge is something that is very valuable if it is


learned, shared and used in our daily lives. Therefore, knowing the types of
knowledge will enable you to appreciate this knowledge and use them.

In Topic 2, you have studied in detail the foundation of knowledge – what it is


and why it is important. The topic also discussed alternative views of knowledge,
which are the subjective and objective views. You have also learned how to
differentiate among data, information and knowledge, and the recursive
relationship between these three, followed by the knowledge advantages that are
gained through knowledge in products, people and processes. This topic will
explain the major classifications of knowledge, which are organisational, tacit,
explicit, implicit, heuristics, declarative and procedural knowledge. Then,
discussions on the Socialisation Externalisation Combination and Internalisation
(SECI) knowledge conversion model are presented, and the locations of
knowledge are discussed here.

Knowledge management initiatives in an organisation should start with the


effective identification, categorisation and classification of organisational
knowledge. For knowledge to be managed as a resource, its different theoretical
classification and related types should be studied. There exist many
categorisations of knowledge such as individual, social, casual, conditional,
relational, embodied, encoded, procedural and others. However, there exist two
major classifications of knowledge found in the literature on KM. The first
classification is whether the knowledge is tacit or explicit, and the implicit,
second is the classification of knowledge into implicit declarative, procedural or
heuristic. There exists a third category that classifies knowledge either as
individual or group (collective) knowledge. Figure 3.1 shows these classifications
in a graphical view and the following sections will explain these different types
of knowledge.

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32 TOPIC 3 TYPES OF KNOWLEDGE

Figure 3.1: Theoretical classification of knowledge

ACTIVITY 3.1

1. Discuss why knowledge management initiatives in an


organisation should start with the effective identification,
categorisation and classification of organisational knowledge.
2. Describe the type of knowledge that you know. When do you use
knowledge?
3. Do you think the theoretical classification of knowledge is
acceptable? Argue your thoughts with an appropriate example.

3.1 ORGANISATIONAL KNOWLEDGE


Organisational knowledge can be „considered‰ as a collection of individual and
team tacit knowledge within an organisation. When working as a team of
interacting individuals, the individual team members may have knowledge that
go beyond their individual knowledge when working together. Organisational

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TOPIC 3 TYPES OF KNOWLEDGE 33

knowledge encompasses many disciplines and domains, is difficult to formalise,


contains ideas with different viewpoints and is very dynamic in nature
(Vasconcellos, 2000).

This knowledge consists of both individual knowledge and group knowledge.


Individual knowledge correlates with personal knowledge structures, while
group knowledge is related to organisational structures. A knowledge structure
is a „mental template‰ used to provide complex information with environment,
form and meaning. These structures are built based on previous experiences and
are used to store data that allows subsequent interpretation and action. Group
knowledge can be seen as the knowledge and skills gained collectively by
individuals working in similar job-related situations.

For example, some organisational groups such as those found in fast food chain
restaurants have their knowledge codified in work flow „metaphors‰ that are
unique to that group, and only they can understand it compared to people
outside the team. These metaphors are usually the result of systematic
communication practices that take place in the workgroup environment. You
would experience this type of knowledge when you work in a team during
your undergraduate days or in the office. Managing organisational knowledge
is an uphill task as it involves understanding the relationship between the
different types of knowledge that flow in the organisation, how this knowledge
can be captured, stored and used, and the role of technology in managing this
type of knowledge.

In Subtopic 3.2, you will learn about tacit knowledge, which is a major type of
knowledge widely discussed in knowledge management literature. Thorough
understanding of this type of knowledge is vital when discussing knowledge
management.

SELF-CHECK 3.1

1. What is organisational knowledge in the context of knowledge


management?
2. Explain the differences between individual knowledge and group
knowledge.
3. Identify group knowledge in your organisation, and how the
group members benefit from this knowledge.

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34 TOPIC 3 TYPES OF KNOWLEDGE

3.2 TACIT KNOWLEDGE


Tacit knowledge is an important type of knowledge and is widely acknowledged
in the field of knowledge management by prominent researchers such as
Davenport and Prusak (2000), Nonaka and Takeuchi (1995), and others. Polanyi
(1996) investigated the nature of tacit knowledge and described it as knowledge
that is acquired experimentally. Polanyi used the phrase „we know more than
what we can tell‰ to describe tacit knowledge as this type of knowledge is very
difficult to be articulated because it is complex or is usually internalised in the
human mind through experience and jobs. Nonaka and Takeuchi (1995)
highlighted the bread making process which was interned by engineers
themselves to one of JapanÊs leading bakers as an example of tacit knowledge in
corporate innovation. The bread making process is an example of tacit
knowledge of the baker. This personalised nature makes tacit knowledge difficult
to be extracted and shared with others (Choo, 2000), since it is embedded in a
personÊs memory.

Tacit knowledge includes intuitions, values, know-how and beliefs that are
stamped from years of experience, which are used to create explicit knowledge.
Explicit knowledge is knowledge that can be easily shared and articulated
through reports. Subtopic 3.3 discusses explicit knowledge in detail. Tacit
knowledge is valuable as it provides context for people, ideas, places and
experience. For example, the knowledge of how to solve a problem (know-how)
is actually a matter of personal interpretation, ability and skill. While the
techniques for problem solving can be learnt in the classroom, the solution
created by one employee will definitely differ from that of another.

Therefore, ways to communicate tacit knowledge are usually through personal


communication such as dialogue, internship, practice and others. The knowledge
here is considered as social rather than private and socially communicated
knowledge becomes part of real-life experience for the learner. The reason for
this is that people usually are not aware of the knowledge they have or how it
can be valuable to others. For example, Goguen (1997) states: „People may know
how to do something without being able to articulate how they do it. In the social
sciences, this is called the say-do problem. Some examples are riding bicycles,
tying shoelaces and speaking languages, negotiating contracts, reconciling
personal differences, evaluating employees and using a word processor.‰

Consequently, tacit knowledge is difficult (or arguably impossible) to code


adequately into a set of rules or procedures that can be shared or communicated.
Nevertheless, some researchers (Nickols, 2000; lchmann, 2003) believe it is possible
to articulate the implicit part of tacit knowledge. Implicit knowledge is incomplete

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TOPIC 3 TYPES OF KNOWLEDGE 35

codified knowledge (knowledge that can be represented e.g. pen down what is in
the memory) that has not been articulated and the existence of it is implied by, or
inferred from, observable behaviour or performance (Nickols, 2000; Ichmann,
2003). You will learn more about implicit knowledge in Subtopic 3.5.

ACTIVITY 3.2

1. Discuss the type of tacit knowledge that you have, which seems
impossible for you to convey to others.
2. Why do you think it is impossible for you to convey it?
3. Do you agree with the phrase „we know more than what we can
tell‰ that Polyani used in referring to tacit knowledge?
4. Give five examples of tacit knowledge from your field or domain.
5. Identify the implicit part of the five examples you have given.

3.3 EXPLICIT KNOWLEDGE


Explicit knowledge can be defined as knowledge that can be seen, shared and
communicated with others, and is easy to manage. It can be communicated
because it can be represented/expressed in a formal way using a set of symbols
such as words and numbers (Choo, 2000). Explicit knowledge is easily shared
and articulated because it is relatively independent of any individual or
organisational group. It is also known as codified knowledge as it can be written
or digitised in books, documents, reports, white papers, memos, training
materials and others that can be easily retrieved and transmitted across space
and time. Explicit knowledge is viewed as theoretical knowledge, knowledge
about knowing something (knowing-that) such as when a person learning a skill
shares the available knowledge using explicit instructions, rules, procedures and
formulas.

For example, a business strategic planning report can be circulated within the
organisation in any appropriate form such as memos, reports, procedure
manuals or handbooks and employees can read these materials and execute the
required plan. Explicit knowledge can also be computer programs, mathematical
formulae or they can exist as diagrams, in electronic or paper form.

However, most explicit knowledge is in the form of documents that contain the
work experiences of staff such as raw data, descriptions of cases or events, data
interpretation, beliefs, guesses, hunches, ideas, opinions, judgement and

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36 TOPIC 3 TYPES OF KNOWLEDGE

proposed action (Jones et al., 2000). Explicit knowledge may be object-based or


rule-based (Choo, 2000); knowledge is object-based when it is represented using
strings of symbols (words, numbers, formulas), or is embodied in physical
entities (equipment, models, substances). Explicit knowledge is rule-based when
the knowledge is codified into rules, routines or operating procedures. This
makes explicit knowledge the type of knowledge that can be codified in
computer systems, namely, knowledge-based systems, document management
system, organisational memory, project repository and others.

ACTIVITY 3.3

1. Discuss five ways explicit knowledge can be communicated and


shared.
2. Argue why explicit knowledge can be shared easily.
3. Discuss why explicit knowledge is independent of person or
organisational group.

3.4 TACIT VERSUS EXPLCIT KNOWLEDGE


In the previous section, you have studied tacit and explicit knowledge. In this
section, you will look at the differences between these two knowledge types.

Explicit knowledge can be the property of an organisation even after its inventors
or authors leave the organisation (Choo, 2000) because it is already captured in
the forms mentioned above. However, this is not true in the case of tacit
knowledge, which is often lost when the „owners‰ leave. The only means of
having access to this implicit knowledge is when it has been captured by the
organisation. We will discuss this later.

Both explicit knowledge and tacit knowledge can be managed using techniques
and methods developed in the field of knowledge management and knowledge
engineering. However, many researchers (Nonaka and Takeuchi, 1995; Schreiber
et al., 1999; Choo, 2000) agreed that most knowledge is tacit and is more valuable
to organisations than explicit knowledge. Despite this, tacit knowledge is the
toughest to manage as it resides in peopleÊs heads and is difficult to articulate
and share.

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TOPIC 3 TYPES OF KNOWLEDGE 37

Table 3.1: Explicit and Tacit Knowledge

Tacit Knowledge Explicit Knowledge

Knowing how (subjective knowledge) Knowing about (objective knowledge)

Cannot be represented. Can be shared Represented in formulae, diagrams,


through practice reports

Systems of ideas, perceptions, experience Rationalisation of facts; formal methods

Difficult to transfer Easy to codify, transfer, reuse

Open for interpretation No room for misinterpretation

Source: Adapted from Bolisani and Scarso (1999)

Based on the research of others, (Bolisani & Scarso, 1999) several differences
between explicit and tacit knowledge were highlighted. Their findings are
summarised in Table 3.1. Explicit knowledge is about knowing something and is
regarded as objective knowledge. It is derived from the rationalisation of
information and thus can be represented in formulae, diagrams, reports and so
on. It can be communicated, codified and transferred using appropriate
representation techniques and a shared language (such as knowledge
representation languages, formal logic and ontologies). Tacit knowledge, on the
other hand, is related to knowing how to do something, which is much more
subjective in nature. It is related to ideas, perceptions and experiences. These are
difficult to transfer directly by means of a representation because of the lack of
common ground (Clark & Brennan, 1991) and the fact that tacit knowledge is
usually only gained through experience and practice. Another important
distinction is that tacit knowledge has a higher degree of ambiguity, as it is open
to interpretation, unlike explicit knowledge, which has no room for
misinterpretation.

However, for the purpose of this discussion one of the most important
distinctions lies in what Cook and Brown (1999) call „the epistemology of
possession‰. Explicit knowledge is abstract and static. It is about, but not in, the
world and accordingly it may be owned without being used. Tacit knowledge, on
the other hand, is concrete and dynamic – it is concerned with who we are and
what we do; it is not something that can be possessed. Consequently, discussions
of „lost knowledge‰ tend to favour explicit knowledge over tacit knowledge.

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38 TOPIC 3 TYPES OF KNOWLEDGE

For the purpose of this module, the focus is on managing codified knowledge
that is either explicit or implicit, and ways to manage tacit knowledge.
Understanding the differences between these two types of knowledge is
important when identifying the type of knowledge-related application/problems
that can be solved/addressed using knowledge engineering techniques as they
are applied in knowledge-based systems or in establishing knowledge sharing
sessions through communities of practice (CoP) sessions.

SELF-CHECK 3.2

1. What is tacit and explicit knowledge?


2. What are the three main differences between tacit and explicit
knowledge?
3. Why is articulating explicit knowledge easier than tacit
knowledge?
4. Identify two features that make tacit knowledge difficult to be
articulated or codified.
5. How can tacit knowledge be acquired? Does time influence the
learning process?

3.5 IMPLICIT KNOWLEDGE


Implicit knowledge is incomplete codified knowledge that has not been
articulated and the existence of it is implied by, or inferred from, observable
behaviour or performance. It has the potential to be articulated but has not been
articulated yet (Nickols, 2000). Researchers such as Nickols (2000) and lchmann
(2003) believe that the implicit part of tacit knowledge is possible to be
articulated because this type of knowledge can be „teased out‰ of a skilful task
performer by a task analyst, knowledge engineer or people who are capable of
identifying implicit knowledge.

For example, in analysing the task carried out by insurance underwriters, it is


found that in the underwriterÊs work there are three possible basic outcomes:
(1) the policy application is approved; (2) the policy application is rejected; and
(3) counter offer can be made. However, none of the insurance underwriters have
articulated these outcomes as the boundaries of their work at the outset of the
analysis. Once these outcomes are known, it is easier to identify the criteria used

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TOPIC 3 TYPES OF KNOWLEDGE 39

to evaluate the policy applications. This is when the implicit knowledge becomes
explicit knowledge. Figure 3.2 shows the relationship between explicit, implicit
and tacit knowledge.

Figure 3.2: Explicit, implicit and tacit knowledge


Source: Nickols, (2000)

ACTIVITY 3.4

1. Discuss when and how tacit knowledge can be considered as


implicit knowledge.
2. Describe the relationship between tacit and implicit knowledge.
3. Describe the relationship between implicit knowledge and
explicit knowledge.

3.6 HEURISTIC KNOWLEDGE


Heuristic knowledge is a specific type of tacit knowledge because it is difficult to
capture and externalise. It describes knowledge that is related with work
experience and the implicit reasoning involved in performing the tasks. Heuristic
knowledge in most cases grows with the working experience of the knower, since
the meaning of an action is dependent on the individualÊs experience and

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40 TOPIC 3 TYPES OF KNOWLEDGE

knowledge. Heuristic knowledge uses both declarative and procedural


knowledge and is generated by an internal process, and is used to answer the
„why‰ question and solving problems. For example, heuristic knowledge can
assist in engine problem diagnosis task involving a Proton Perdana car. In this
situation, the experienced mechanic would rely on his heuristic knowledge
gained through experience servicing and repairing Proton cars over the years to
perform the diagnosis. Heuristic knowledge takes years to learn, and it is
learning by experience. Most heuristic knowledge is context dependent based on
the personÊs experience and therefore it is difficult to be shared. The possible way
to share and learn heuristic knowledge is through internship from the master to
the apprentice, or through observation and discussion with the expert.

3.7 DECLARATIVE KNOWLEDGE


Declarative knowledge is related to the physical aspect of knowledge that
discusses consensual facts about the world, and knowledge of objects (entities or
events). It is the type of knowledge used to answer the what, who, where and
when questions. It has much in common with explicit knowledge as the
knowledge here consists of descriptions of facts, procedures and methods. In
many cases, both declarative and explicit knowledge can be viewed as the same
because all declarative knowledge is explicit knowledge, the type of knowledge
that has the potential to be articulated or has been articulated. Declarative
knowledge is important for the process of interpreting and describing something
from different viewpoints (conceptualisation) of the physical features of the
world. Figure 3.3 shows how to identify declarative knowledge.

For example, in a Perodua factory, declarative knowledge can be sets of justified


beliefs about the effect that the quality of different components has on the final
product produced – the car. This can be the effect of quality on different features
of a car such as fuel consumption, reliability, quality of driving experience and
the safety features of a particular model. This declarative knowledge and
information about the required components for each model along with
alternative components prices can help determine the specific components that
can be used in each different model.

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TOPIC 3 TYPES OF KNOWLEDGE 41

Figure 3.3: The difference between declarative knowledge and procedural knowledge
Source: Nickols, (2000)

3.8 PROCEDURAL KNOWLEDGE


Procedural knowledge is the type of knowledge needed to perform a certain task
as it provides description of the specific actions required in carrying out the task
successfully. It is the type of knowledge used to answer the how questions based
on intellectual skills. It focuses on the sequence of steps or actions required to
obtain the desired outcomes, and can be applied directly to a task.
Conventionally, procedural knowledge uses declarative knowledge in describing
actions through sequences of steps and enables representation of the behaviour
of a specific domain. Figure 3.3 shows how to differentiate between procedural
knowledge and declarative knowledge.

Procedural knowledge can also be considered as knowledge contained in the


application of a procedure that mainly uses psychomotor skills, such as
ensuring the gear of a car is in neutral position before igniting the engine.
However, not all procedural knowledge are psychomotor skills as there are
times when the same knowledge is learned and used over and over again in a
procedure, it happens to be used automatically. An example of this mental skill

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42 TOPIC 3 TYPES OF KNOWLEDGE

would be in learning languages: when someone learns a new language and


after a period of time is able to speak the language fluently, the language
becomes a natural part of the person.

Typical examples of procedural knowledge are informal description of


steps/actions, business rules, constraints, and exceptions that form any operation
or task. Formal descriptions of such operation or task are considered as encoded
procedural knowledge, usually in the form of work procedures, user manuals or
checklists. Figure 3.4 shows the stages involved in information technology
planning, which is procedural knowledge.

Figure 3.4: Stages of Information Technology planning

SELF-CHECK 3.3

1. Identify the major differences between declarative and procedural


knowledge.
2. What types of questions are answered using declarative knowledge?
3. Why is declarative knowledge important in managing
organisational knowledge?
4. How can you differentiate procedural knowledge from declarative
knowledge?
5. Not all procedural knowledge can be considered as psychomotor
skills. Why?

3.9 KNOWLEDGE CONVERSION – SECI MODEL


Both explicit knowledge and tacit knowledge must be a part of any knowledge
management initiative. Fortunately, both tacit and explicit knowledge can be
managed using techniques and methods developed in the fields of knowledge
management and knowledge engineering. However, in the case of tacit
knowledge, it must first be „converted‰ into explicit knowledge (codifying
implicit knowledge).

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TOPIC 3 TYPES OF KNOWLEDGE 43

Knowledge conversion is the name given to a method of knowledge creation


within an organisation and is described as the conceptual relationship between
tacit and explicit knowledge (Nonaka & Takeuchi, 1995). Nonaka and Takeuchi
(1995) believe that the Socialisation, Externalisation, Combination and
Internalisation (SECI) model is the translation of individual implicit knowledge
to common external knowledge as a spiral process within an organisation. They
conclude that the key to knowledge creation is in the mobilisation and
conversion of tacit knowledge (the implicit part) to explicit knowledge and vice
versa. This knowledge creation is done through the repeated application of four
SECI processes of socialisation, externalisation, combination and internalisation.
The SECI knowledge conversion model is shown in Figure 3.5. Included in this
model (shown in italics) are the descriptions by Bolisani and Scarso (1999) for
each process of knowledge conversion.

Figure 3.5: Knowledge conversion model


Source: Adapted from Nonaka and Takeuchi (1995) and Bolisani and Scarso (1999)

Let us take a look each of it in detail.

(a) Socialisation – Tacit to Tacit


Socialisation is the process of transferring tacit knowledge in one person to
tacit knowledge in another person through direct interactions and
experience shared between them. This knowledge sharing is usually done
without creating any explicit knowledge and the most effective ways of
doing this is through discussion between people sharing the same culture,
and people who are able to work together effectively.

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44 TOPIC 3 TYPES OF KNOWLEDGE

Socialisation involves the synthesis of tacit knowledge across people through


joint activities rather than written or verbal instructions. Experience between
individuals in face-to-face meeting is mostly described, discussed and shared
with technology having a minimal role. Nevertheless, the usage of online
groupware tools by workgroups or teams is growing.

Therefore, the tacit knowledge sharing process is linked to the ideas of


communities and collaboration between people and teams. Davenport and
Prusak (1998) have reported how simple conversations at the water-cooler
have helped knowledge-sharing among groups at IBM. The same is
practised by many organisations through coffee or tea sessions to generate
more discussions and exchange of ideas that enables newcomers to learn
from experienced staff.

(b) Externalisation – Tacit to Explicit


Externalisation is the process of making tacit knowledge explicit through
articulating oneÊs tacit knowledge into words, concepts, visuals, ideas,
metaphors and analogies that can be shared between individuals within a
group. Externalisation helps translate an individualÊs tacit knowledge into
explicit knowledge that can be easily shared and understood by their
group.

Although it is commonly believed that it is difficult to convert tacit


knowledge into explicit knowledge, the sharing of the implicit part of the
knowledge explicitly is possible through externalisation. Through
conceptualisation, knowledge elicitation and finally, articulation, the
conversion is possible as collaboration between people may occur whereby
some portion of a personÊs tacit knowledge may be captured in explicit form.

Examples of activities where the conversion takes place are in dialogue


sessions among team members in response to questions, or through
elicitation of stories. Documents written by a consulting team describing
the lessons learned about a client organisation, client executives and
approaches that work in consultation sessions capture the tacit knowledge
acquired by team members. These documents can be shared among other
team members working on similar projects or domains, and the captured
tacit knowledge will be a valuable source of reference to these teams.

(c) Combination – Explicit to Explicit


Combination is the process of transferring the explicit knowledge through
documents, e-mails, databases and meetings. This is achieved by collecting
relevant internal and external knowledge, processing it to make it more
intelligible and disseminating it among groups in the organisation. New

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TOPIC 3 TYPES OF KNOWLEDGE 45

explicit knowledge is developed through combination when several bodies of


explicit knowledge are synthesised to create new and more complex explicit
knowledge. New explicit knowledge is created through communication,
integration and systemisation of multiple sources of explicit knowledge.
Existing explicit knowledge, data and information are rearranged,
re-categorised and re-contextualised to produce new explicit knowledge.

Explicit knowledge can be communicated and shared during meetings


using documents, e-mails or through education and training. Nowadays,
explicit knowledge can be captured easily and sent to a worldwide
audience via e-mail and this expedites knowledge sharing in an efficient
and effective way. Here, technology helps people to capture and share the
knowledge that they have or the knowledge they need. For example, in the
process of creating a new business proposal for a client in a consulting firm,
explicit data, information and knowledge contained in previous proposals
or project reports may be combined and reused into a newly developed
proposal. Other approaches that can be used here are data mining
techniques that enable the discovery of new relationship between explicit
data, which help to predict or group models that are able to create new
knowledge.

(d) Internalisation – Explicit to Tacit


Internalisation is the process of grasping and retaining learned explicit
knowledge into tacit knowledge by an individual. To be able to act on
information, individuals have to comprehend and internalise it by creating
their very own tacit knowledge. The explicit knowledge may be embodied in
action and practice By reading documents, books and reports, individuals
can re-experience what was previously learned by others and this represents
the conventional meaning of „learning‰. Individuals could also acquire tacit
knowledge. It involves the process of understanding the explicit knowledge
and deducing new ideas or performing constructive actions. Through
internalisation, experiences gained are actualised as concepts, methods and
processes performed during experiments and simulation.

An example of internalisation is having a student learn programming


techniques from books on fundamentals of programming and learn from it.
This learning of programming techniques helps the student to capture the
tacit knowledge of programming contained in the book and understand it
well enough to write his own programs. However, this process of reading
from various sources is becoming more challenging because of the vast
amount of information that one has to deal with.

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46 TOPIC 3 TYPES OF KNOWLEDGE

These four processes of SECI model do not occur separately but work together in
various combinations. For example, knowledge is created through the interaction
of individuals with both tacit and explicit knowledge. During interaction with
others, tacit knowledge is externalised and shared with others. Even though
employees experience each of these processes from the organisational knowledge
management perspective, the best value comes from the combination as new
knowledge is created, disseminated and externalised by other employees who
can as a result act on it. From this new experience, tacit knowledge can then be
shared with other employees. Therefore, all the four processes in the SECI model
are important and knowledge management solutions should support all these
processes based on the organisation's knowledge management strategies.

The idea of „knowledge conversion‰, however, remains contentious. For


example, Hildreth and Kimble (2002) have criticised the validity of this process,
although others such as Schreiber et al. (1999) argue that this framework has
provided new insights into the management of tacit knowledge. While there is
still some debate as to how widely this knowledge conversion process can be
applied, and to what extent certain aspects of tacit knowledge might be „lost‰ in
the process of conversion, Nonaka and Takeuchi's (1995) process has proved to
be extremely influential. This is particularly so in knowledge-based systems:
because only explicit and implicit knowledge can be represented in the
knowledge base of a KBS as rules (Choo, 2000), the process of knowledge
conversion is absolutely fundamental to all activities employed in the
development of such systems (Stein et al., 2003). The process of acquiring
knowledge for these systems is done through the knowledge acquisition stages of
the knowledge engineering process.

Knowledge management concerns better management of organisational


knowledge using appropriate tools, procedures and techniques from diverse
domains. Though managing knowledge is a human-related task, technology can
complement human knowledge handling and one such example is the
knowledge-based system, which is capable of managing both explicit and
implicit knowledge. Having appropriate tools and techniques will ensure that
knowledge is fully utilised within the organisation and employeesÊ knowledge is
captured and retained in a form that can be used even when the employee leaves.
In Topics 9, 10 and 11, you will learn more on the use of technology in managing
these different types of knowledge.

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TOPIC 3 TYPES OF KNOWLEDGE 47

ACTIVITY 3.5

1. Describe the four components of the SECI model used in


knowledge conversion.
2. Discuss how the SECI model can help in generating new
knowledge.
3. Compare the externalisation process with the internalisation, and
identify three fundamental differences between them.
4. Discuss how the socialisation process works in an academic
environment.
5. What are your views on this SECI knowledge conversion model?

SELF-CHECK 3.4

1. Why is the SECI knowledge conversion model important in


managing different types of knowledge?
2. Identify the type of knowledge that is shared during the
sosialisation process.
3. List three SECI processes that deal with explicit knowledge.
4. Why is the idea of knowledge conversion debatable?
5. Which process of the SECI model do you think is difficult to be
managed by computer-based systems?

3.10 LOCATIONS OF KNOWLEDGE


Knowledge resides in many different locations or reservoirs as shown in Figure 3.6.
These encompass people, including individuals or groups; artefacts, including
practices, technologies and repositories; and organisational entities, including
organisational units, organisations and inter-organisational networks (Becerra-
Fernandez, Gonzalez & Sabherwal, 2004).

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48 TOPIC 3 TYPES OF KNOWLEDGE

Figure 3.6: The reservoirs of knowledge


Source: Adapted from Bacerra-Fernandez, Gonzalez & Sabherwal (2004)

This section discusses these locations of knowledge in detail.

(a) Knowledge in People


Knowledge is mainly stored in people as it is a human-based skill and
process. Some of this knowledge is in individuals working in organisations.
For example, in an accounting firm, the knowledge of the firm is in the
minds of the individuals working in the firm. This is the main reason why
many organisations regularly find means to retain their employeesÊ
knowledge that would be lost when they retire or leave the organisation.

Furthermore, considerable knowledge resides within groups that work


together due to the working relationship, communication and knowledge
sharing between team members. When individuals work together for a long
period, they are aware of each otherÊs strengths and weaknesses, know
othersÊ problem-solving approach, and understand the type of messages or
information that is personal or can be shared between them.

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TOPIC 3 TYPES OF KNOWLEDGE 49

Gradually, teams will establish their own beliefs on how something should
be done, who performs it better and how to gain value from it. This
knowledge is over and above the knowledge held by each individual
member. This is known as the synergy effect, whereby the group
knowledge is far greater than the sum of each individualÊs knowledge.
Communities of practice or online discussion groups, where individuals
interact (physically or virtually) and share knowledge and experiences
between them on topics of mutual interest, is an example of knowledge
within groups.

(b) Knowledge in Artefacts


Large amounts of knowledge can be stored in organisational artefacts
over the years. Part of this knowledge is captured in organisational
practices, routines or sequential patterns of interaction. Here, knowledge
is embedded in procedures, rules and norms that are built through
experience over the years. Knowledge in artefacts is usually found in fast-
food franchises as they often store knowledge about procedures and
processes on how to produce high-quality products in routines.

Large amounts of knowledge are also usually captured in systems and


technologies. This is done through computer-based systems that are able
to store knowledge about relationships found. For example, materials
resources planning (MRP) system, widely used in production environments,
contains large amounts of knowledge about the relationships between
demand and supply patterns, lead times for orders, inventory capacity,
production capacity and reorder quantities.

Knowledge stored in repositories is another way of storing knowledge


in artefacts. These repositories can be paper based such as books, reports
and other documents, or electronic based such as document management
systems or online document sharing systems. Project repositories for
software development projects for storing and managing user requirements,
feasibility study reports, design documents, tender information and project
management is one example of electronic-based repositories.

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50 TOPIC 3 TYPES OF KNOWLEDGE

(c) Knowledge in Organisational Entities


Knowledge is stored in organisational entities at three different levels: as
organisational units or departments, as the whole organisation, and as
inter-organisational relationship between the organisation and its customers.

In a department, knowledge is partly stored in the relationship between


members of the department, which represents a formal grouping of
individuals who work together because of organisational structuring and
not on common or personal interest. Certain positions in the department
are rotated between different staff with the new person inheriting some of
the knowledge developed by their predecessors. Such knowledge may have
been acquired through the systems, organisational practices and relationship
within the department. Furthermore, contextually specific knowledge is
strongly related to the specific department or organisational unit.

An organisation also stores certain knowledge, mainly contextually specific


knowledge such as norms, values, practices and culture within the
organisation, and across different departments, which are not stored within
the mind of the employees. The way the organisation responds to external
events is, therefore, not only based on the knowledge stored in individuals
or departments, but also through organisational knowledge that has been
captured and developed through positive and negative experiences over
the years.

Knowledge is also captured and stored in inter-organisational relationship


between organisation and its customers, suppliers and consumers. When
organisations build and consolidate business relationships with customers
and suppliers, they depend on the knowledge embedded on these
relationships. For example, customers who use the organisationÊs products,
and suppliers who supplied components for that product are usually more
knowledgeable on the strengths and weaknesses of the manufactured final
products. Furthermore, through customer relationship management,
organisations gain customersÊ experience and knowledge about the
products and suggestions on how to improve the product. This is valuable
knowledge for the organisationÊs new product development strategies.

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TOPIC 3 TYPES OF KNOWLEDGE 51

SELF-CHECK 3.5

1. List three important locations or reservoirs of knowledge.


2. What is the difference between knowledge in people and
knowledge in artefacts?
3. What type of knowledge can you find in organisational entities?
4. Why can knowledge in artefacts be found in the form of computer-
based information systems?
5. Why is individual knowledge different from group knowledge in
an organisation?
6. How can we capture knowledge in artefacts effectively and
efficiently?
7. What is the strength of working in a team rather than as
individuals in an organisation?
8. Why are project repositories important in managing knowledge in
artefacts and how can we populate these repositories?

ACTIVITY 3.6

1. Discuss the seven different types of knowledge and provide


appropriate examples for each type.
2. Provide a brief description for the following terms:
(a) Implicit knowledge
(b) Procedural knowledge
(c) Declarative knowledge
3. Review why the SECI model for knowledge conversion is useful in
managing tacit knowledge.
4. Argue the need and importance of Socialisation process of the
SECI model sharing tacit knowledge.
5. Critique the SECI model in managing individual tacit knowledge.

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52 TOPIC 3 TYPES OF KNOWLEDGE

• There exist many types of knowledge that can be classified into


organisational, tacit, explicit, implicit, heuristics, declarative and procedural
knowledge.

• Organisational knowledge is the collection of individual and team tacit


knowledge within an organisation.

• Tacit knowledge is knowledge that cannot be seen and has to be learned by


practice and is usually described as the know-how knowledge.

• Explicit knowledge is knowledge that can be seen, communicated and shared


between people and is usually known as the know-what knowledge.

• Implicit knowledge is the part of tacit knowledge that has the potential to be
articulated and its existence is implied by or inferred from.

• Heuristic knowledge is a specific type of tacit knowledge difficult to capture and


externalised, and is very strongly related to the work experience of the knower.

• Declarative knowledge is knowledge that describes facts, procedures and


methods, and is used to answer the what, who, where and when questions.

• Procedural knowledge is the type of knowledge needed to carry out certain


task and is used to answer the „how‰ questions.

• Knowledge can be translated from tacit to explicit and vice versa through the
socialisation, externalisation, combination and internalisation (SECI) of the
knowledge conversion model.

• Knowledge can be found at different locations or reservoirs consisting of


people (individuals and groups), artefacts (practices, technologies, and
repositories) and organisational entities (organisational unit, organisations
and inter-organisational networks).

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TOPIC 3 TYPES OF KNOWLEDGE 53

Artefacts Knowledge conversion


Combination Knowledge reservoirs
Declarative knowledge Organisational knowledge
Explicit knowledge Procedural knowledge
Externalisation Repositories
Heuristic knowledge Socialisation
Internalisation Tacit knowledge
Implicit knowledge

Becerra-Fernandez, I., Gonzalez, A., & Sabherwal, R. (2004). Knowledge


management – Challenges, solutions, and technologies. New Jersey:
Prentice Hall.
Bolisani, E., & Scarso, E. (1999). Information technology management: a
knowledge-based perspective. Technovation, 19(4), 209–217.
Choo, C. W. (2000). Working with knowledge: How Information professionals
help organisations manage what they know. Library Management, 21(8),
395–403.
Clark, H. H., & Brennan, S. A. (199). Grounding in Communication. In L. B. Resnick,
J. M. Levine, & S. D. Teasley (Eds.). Perspective on socially shared cognition.
Washington: APA Books.
Cook, N. D. S., & Brown, S. J. (1999). Bridging epistemologies: The generative
dance between organisational knowledge and organisational knowing.
Organisation Science, 10(4), 381–400.

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54 TOPIC 3 TYPES OF KNOWLEDGE

Goguen, J. A. (1997). Towards a social, ethical theory of information, in social


science, technical systems and cooperative work: Beyond the great divide.
Bowker, G. C., Star, S. L., Turner W. and Gasser, L. (Eds), Lawrence Erlbaum
Associates.
Hildreth, P., & Kimble, C. (2002). The duality of knowledge, information
research, 8(1), paper no. 142 [Available at http://informationr.net/ir/
8-1/paper142.html].
Ichmann, C. (2003). Investigation of technologies in the knowledge management
context, School of Computing, Dublin Institute of Technology, Research
Paper (ITSM), DIT, 2003.
Jones, R. R., Bremdal, B. A., Spaggiari, C., Johansen, F., & Engels, R. (2000).
Knowledge management through content interpretation, IASTED international
conference on artificial intelligence and soft computing (ASC2000). Banff,
Alberta.
Nickols, F. W. (2000). The knowledge in knowledge management, in the
knowledge management yearbook 2000–2001, Cortada, J. W. and Woods, J. A.
(Eds), pp. 12–21, Butterworth-Heinemann.
Nonaka, I., & Takeuchi, H. (1995). The knowledge creating company: How
Japanese companies create the dynamics of innovation. Oxford University
Press: Cambridge.
Polanyi, M. (1996). The tacit dimension. New York: Doubleday.
Schreiber, G., Akkermans, H., Anjewierden, A., de Hoog, R., Shadbolt, N.,
de Velde, W. V., & Wielinga, B. (1999). Knowledge engineering and
management: The CommonKADS methodology. Cambridge: MIT Press:.
Stein, E. W., Pauster, M. C., & May, D. (2003). A knowledge-based system to
improve the quality and efficiency of titanium melting. Expert Systems with
Applications, 24(2), 239–246.
Vasconcellos, S. J. (2000). Winds of change: How your organisation can adapt to
economic trends. London: Kogan Page.

Copyright © Open University Malaysia (OUM)


Topic Organisational
4 Impact of
Knowledge
Management
and Managing
Knowledge
Workers
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Discuss the impact of knowledge management on people;
2. Discuss the impact of knowledge management on processes;
3. Explain the impact of knowledge management on products;
4. Identify the impact of knowledge management on organisational
performance;
5. Describe the characteristics and core competencies of knowledge
workers;
6. Discuss knowledge teams; and
7. Recognise the roles of a Chief Knowledge Officer.

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56 TOPIC 4 ORGANISATIONAL IMPACT OF KNOWLEDGE MANAGEMENT
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INTRODUCTION

The pessimist sees difficulty in every opportunity.


The optimist sees the opportunity in every difficulty.
– Winston Churchill

If we value independence, if we are disturbed by the growing conformity of


knowledge, of values, of attitudes, which our present system induces, then we
may wish to set up conditions of learning which make for uniqueness, for self-
direction, and for self-initiated learning.
– Carl Rogers

The leaders who work most effectively, it seems to me, never say „I‰. And that's
not because they have trained themselves not to say „I‰. They don't think „I‰.
They think „we‰; they think „team‰. They understand their job to be to make the
team function. They accept responsibility and don't sidestep it, but „we‰ gets the
credit. This is what creates trust, what enables you to get the task done.
– Peter Drucker

The above proverbs show that to gain knowledge one must be willing to learn what
is unknown to him, and knowledge is what we seek, that will lead us to wisdom.

The above proverbs also show that one has to be an optimist in achieving
dreams, which is done by learning and acquiring knowledge. Working as a
team enables synergy between team members and gets the job done. Therefore,
understanding the impact of knowledge on people, processes, products and
organisational performance, as well as managing knowledge workers are vital
for organisationÊs success.

In Topic 3, you have learned about different classifications of knowledge into


tacit, explicit or implicit; declarative, procedural or heuristic; and individual or
group. The topic also discussed SECI knowledge conversion processes that are
widely used in creating and managing tacit and explicit knowledge to support
knowledge management initiatives. The SECI knowledge creation process is
done through repeated application socialisation (tacit to tacit knowledge),

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externalisation (tacit to explicit knowledge), combination (explicit to explicit) and


internalisation (explicit to tacit). Topic 3 also showed different locations or
reservoirs, where knowledge resides, and these are in people, artefacts and
organisational entities. This topic will discuss the organisational impacts of
knowledge management, which are the impact on people, impact on processes,
impact on products, and impact on organisational performance. Discussion on
knowledge workers, ways of managing knowledge workers and knowledge
teams are presented in this topic.

Managing knowledge through KM processes is widely recognised by


organisation as KM impact can be seen at several levels: people, processes,
products and the overall organisational performance (Fernandez, Gonzalez &
Sabherwal, 2004). KM processes can impact these four levels through two ways:
(a) KM helps create knowledge that can help improve organisations
performance along the four levels; and
(b) KM can directly cause improvements along the four levels.

The two ways how KM can impact organisations are shown in Figure 4.1.

Figure 4.1: How knowledge management impacts organisations

The impacts of KM on four levels and the inter-relation of effect between these
levels are shown in Figure 4.2. The impact at three of these levels – individuals,
products and the organisation is the top reason why US firms adopt KM, namely,
to retain employeesÊ expertise, produce products that enhance customer
satisfaction and increase company revenues. Subtopics 4.1 to 4.4 will discuss
these four levels in detail.

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Figure 4.2: Levels of organisational impacts of knowledge management

4.1 IMPACT ON PEOPLE


KM can affect an organisationÊs employees in many ways. The first is by
facilitating employeesÊ learning process, between each other and from external
sources. Such learning allows the organisation to grow and adapt quickly to
respond to the market and technological changes (Fernandez, Gonzalez &
Sabherwal, 2004). The second is that KM allows employees to become more
adaptable and enhances their job satisfaction (Fernandez, Gonzalez &
Sabherwal, 2004). This is due to their enhanced ability in learning different
workable solutions to many business problems encountered in the past, and
knowledge about what mistakes to avoid.

(a) Impact on EmployeesÊ Learning


EmployeesÊ learning and exposure to the latest knowledge in their domains
can be enhanced through KM in many ways such as the SECI process of
externalisation, internalisation and socialisation, as well as through
communities of practice. Externalisation is the process of converting tacit
knowledge into explicit knowledge, while internalisation enables the
conversion of explicit knowledge into tacit knowledge. Together, these two
processes help individuals to learn. For example, the externalisation process
takes place when an employee prepares a project report on lessons learned
in carrying out the project. The report is then read by different people in the
organisation, and the knowledge learned from the book is used in their
task, thereby re-experiencing what the others have experienced. The
internalisation process takes place when the knowledge learned is rooted
into the routine task of the learners and becomes their tacit knowledge.

Employees also acquire knowledge through socialisation by means of


activities such as meetings, informal gatherings and informal conversations.
An important approach in learning through socialisation is the community
of practice, which is a self-organised group of individuals with similar
interest or passion for what they do, communicates to share their
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knowledge and experience regularly. They are also known as learning


networks, thematic groups or tech-clubs. Table 4.1 provides examples of
discussions in community of practice environments.

Table 4.1: Example of Discussion in Community of Practice

Problem solving „Can we work on this design and brainstorm some


ideas, IÊm stuck.‰
Requests for „Where can I find the code to connect to the server?‰
information
Seeking experience „Has anyone dealt with a customer in this
situation?‰
Reusing assets „I have a proposal for a local area network I wrote
for a client last year. I can send it to you and you can
easily tweak it for this new client.‰
Coordination and „Can we combine our purchases of solvent to
synergy achieve bulk discounts?‰
Discussing „What do you think of the new CAD system? Does it
developments really help?‰
Documentation projects „We have faced this problem five times now. Let us
write it down once and for all.‰
Visits „Can we come and see your after-school
programme? We need to establish one in our city.‰
Mapping knowledge „Who knows what, and what are we missing? What
and identifying gaps other groups should we connect with?‰

Source: http://www.ewenger.com/theory

(b) Impact on Employee Adaptability


Employees are much more adaptable to organisational changes if the KM
processes in the organisation encourage continual learning among one
another. Furthermore, employees are aware of what is going around in the
organisation and are prepared for the changes that they might experience in
the future. Awareness of new ideas and taking part in organisational
discussions prepare employees to respond and accept changes without
much hesitation as they are aware of these changes and the impact on
the organisation. Therefore, KM enables greater adaptability among
employees. For example, Buckman Laboratories have long established the
companyÊs KM efforts (http://www.knowledge-nurture.com) that regularly
expose its employees to new ideas and this provides the means for them to
learn and appreciate new ideas. Therefore, employees are ready to embrace

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changes without fear due to the KM practices that allow them to learn new
ideas and developments, and this enables the company to respond quickly
to the needs of its customers.

(c) Impact on Employee Job Satisfaction


Two benefits of KM on individual employees discussed earlier are:
(i) They are able to learn better than employees from firm that have no
KM practices; and
(ii) They are adaptable to changes.

These impacts are positive on employees because of their knowledge


acquisition and skill enhancement that makes them more marketable across
domain and industry. Employees sharing knowledge with one another
through well-managed KM practices will help the organisation in reducing
turnover rates, positively affect revenues, and retain bright knowledge
workers and leverage on their talents. Furthermore, KM provides solutions
to previously encountered problems, and employees can address them
effectively. This tried-and-tested solution raises employeesÊ effectiveness in
carrying out their job functions and subsequently motivates the employees.
Figure 4.3 shows the impacts of KM and knowledge on the employees of an
organisation.

Figure 4.3: Impact of KM and knowledge on employees of organisations

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SELF-CHECK 4.1

1. What are the four organisational impacts of KM?


2. List three ways how KM can affect people in an organisation.
3. What are the two benefits of KM on individual employees?

ACTIVITY 4.1
1. Discuss how KM can impact on employee learning in an
organisation.
2. Give an example how KM helps employees adapt to
organisational changes.
3. Justify how KM can impact on employee job satisfaction.

4.2 IMPACT ON PROCESSES


KM also enables improvements in organisational processes such as marketing,
human resources, finance, accounting, engineering, public relations and others.
These impacts can be viewed from three major dimensions, and these are:
effectiveness, efficiency and the degree of innovation of the processes
(Fernandez, Gonzalez & Sabherwal, 2004). There impacts which are characterised
as follows:
(a) Effectiveness – Carrying out the most suitable processes and making the
best possible decisions.
(b) Efficiency – Carrying out the processes quickly at a lower cost.
(c) Innovation – Carrying out the processes in a creative and novel fashion,
which improves effectiveness and efficiency, or marketability.

These interrelated aspects of organisational processes can be improved by KM


through improved knowledge sharing between individuals, and providing
workable solutions for employees to solve problems associated with the tasks.
The following sections discuss further on the effects of KM on effectiveness,
efficiency and innovations.

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(a) Impact on Process Effectiveness


KM practices enable organisations to be more effective by facilitating them
to identify, select and carry out the most appropriate processes. Effective
KM helps the organisationÊs employees to obtain information required to
monitor external events. By doing this, organisations are well prepared to
face any business damaging events and consequently, it reduces the need to
modify existing plans and opt for less effective approaches.

However, ineffective KM could result in organisations repeating the same


mistakes over and over again, as they do not have any knowledge about
their mistakes. For example, the partnership between Ford Automotive and
Firestone Tyres encountered many problems that could otherwise have
been avoided if both companies had shared their knowledge by exchanging
explicit knowledge and information, or by having face-to-face discussions
to share tacit knowledge. Both Ford and Firestone have information about
the mismatch of Ford Explorer sport utility vehicles and several models of
15-inch Firestone tyres. However, this information was not integrated
across both companies, and resulted in 2,000 deaths and over 3,000 serious
injuries from these failures. Both companies also had unprecedented legal
liability due to this „tyre mismatch‰ problem.

KM allows organisations to change and adapt their processes to fit the


current volatile business environment, thereby maintaining process
effectiveness in changing times. However, organisations lacking in KM
practices would find it difficult to maintain process effectiveness when
faced with turnover of experienced and new employees. When experienced
employees leave any organisation, they leave with valuable experience and
knowledge, which would result in loss of expertise in solving new
problems or in identifying opportunities. One way of avoiding the loss of
human knowledge with the displacement of the workforce is by having
mechanisms to capture the knowledge of employees and experts who are
leaving the department. We will discuss knowledge capture in detail in
Topic 5.

(b) Impact on Process Efficiency


Organisations are more productive and efficient when they are able to
manage knowledge effectively. Knowledge sharing in an organisationÊs
network enables the organisation to effectively create and manage
knowledge that results in higher productivity as experienced by Toyota
and its suppliers. Knowledge diffusion occurs more rapidly in ToyotaÊs
production network compared to its competitors. This is because ToyotaÊs
network had solved three fundamental dilemmas of knowledge sharing
by introducing ways to: encourage employees to participate and openly

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share valuable knowledge; prevent employees who gain from otherÊs


knowledge but would not share theirs; and lower the costs related to
discovering and accessing different types of knowledge valuable to the
organisation.

British Petroleum (BP) has also gained from improved efficiency through
KM when an oil exploration geologist from Norway discovered a much
efficient way of locating oil in the Atlantic seabed in 1999. This method
requires a change in the position of the drill heads to improve the aim of the
drill, which reduces the number of misses.

This new method description was posted by the geologist on BPÊs intranet
to be shared across the company and has attracted the attention of another
engineer working at Trinidad. They exchanged messages on how this
method can be used and the Trinidad team successfully reduced five days
of drilling, which resulted in a cost saving of US$600,000. The BP case
proves how knowledge sharing using the power of information technology
in organisations could result in major cost saving. In the year 2001, BP
saved US$300 million through the use of KM and intranet in enhancing the
processes in its value chain. Figure 4.4 shows an oil rig in the sea.

Figure 4.4: Oil rig in the sea

(c) Impact on Process Innovation


Organisations are more dependent on knowledge shared among employees to
produce innovative solutions to address problems and to create more
innovative organisational processes. The impact of knowledge on process
innovation in an organisation was highlighted by J.P. Morgan Chase, a global
financial services firm in their annual report as „the power of intellectual
capital is the ability to breed ideas that ignite value‰. Buckman Laboratories
connects its research and development (R&D) staff and technical specialists to
its field-based marketing, sales and technical support staff to ensure that new
products are developed to fulfil customersÊ requirements, by communicating
these requirements fast and accurately to the product design team. As a
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consequence, new knowledge and insights are effectively manipulated in


developing improved products that are required by the market and
consumers. Figure 4.5 shows the summary of the process effectiveness, process
efficiency and process innovation of KM and knowledge on organisation
processes discussed in Subtopics 4.2.1 to 4.2.3.

Figure 4.5: Impact of knowledge management on organisational processes

ACTIVITY 4.2
1. Give an example of effectiveness.
2. Discuss how knowledge sharing can improve process efficiency.
3. Discuss why innovation is important. State the two main benefits
of managing knowledge in this context.

4.3 IMPACT ON PRODUCTS


KM also has impacts on the products produced by organisations and these are
through value-added products and knowledge-based products (Fernandez,
Gonzalez & Sabherwal, 2004). The impacts are either through knowledge or
directly from KM activities in the organisation.

(a) Impact on Value-Added Products


Organisations can produce new or improved products that provide
important additional value as compared to earlier products through KM
processes. Such effort can be seen in FordÊs best practices replication
process in manufacturing. Every year, Ford requires its managers to

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identify 5% to 7% improvement in key measures such as improvements in


throughput or energy use. The managers rely on the companyÊs best
practices database to find knowledge about previous successful efforts. The
best practice replication system that Ford heavily relies on help saves the
company US$245 million from 1996 to 1997. Around 2,000 proven best
practices were shared across FordÊs manufacturing operations from 1996 to
2000; with the documented value of the shared knowledge in 2000 at
US$850 million, with another US$400 million of value expected from work
in progress, bringing the total to a whopping US$1.25 billion. Obtaining the
necessary information by understanding the needs of end users and
problems faced by customers, enable companies to develop value-added
products as KM helps improve the sharing of this information in the
organisational process innovation. Figure 4.6 shows an example of a central
knowledge repository that is linked to several databases.

Figure 4.6: Example of central knowledge repository

(b) Impact on Knowledge-Based Products


KM also has a big impact on products and services that are knowledge-
based, such as consulting and software development industries. For example,
consultants at consulting companies nowadays rely on access to a central
project repository to quickly gather and combine the relevant knowledge to
prepare business proposals. Conventionally without KM, it would take a lot
of time and cost to put forward such proposals if the organisationÊs best
practices and past experiences are not properly compiled, stored and shared.
In the competitive business environment of this consulting industry, KM is
necessary for their survival.

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Knowledge-based product developments are considered as part of KM


processes in manufacturing firms. The classic example is the development
of the bread-making machine by Matsushita in the early 1990s that was
widely discussed by Nonaka and Takeuchi (1995). In designing the
machine, Matsushita sent its engineers to study the art of bread-making and
observe the techniques used by the master baker, and implement this
knowledge when developing the machineÊs functionality. Software and
computer companies such as SUN Microsystems, Microsoft, IBM and others
are enhancing their level of customer service by creating sharable
knowledge bases that contain solutions to customersÊ problems. With this
knowledge base, customersÊ complaints can be resolved faster and
efficiently at a cheaper cost. Furthermore, customers are indirectly trained
to solve some routine problems that require them to download software
patches from the Internet. These are solutions to customersÊ problems that
are generated from the automated diagnosis systems. Figure 4.7 highlights
a partial screenshot of Sun download page.

Figure 4.7: Partial screenshot of Sun download pages for software patches and updates,
and other resources
Source: http://www.sun.com

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TOPIC 4 ORGANISATIONAL IMPACT OF KNOWLEDGE MANAGEMENT 67
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ACTIVITY 4.3

1. Compare value-added products with non-value added products.


What is the main difference between these products?
2. Discuss the importance of knowledge-based products for an
organisationÊs survival.

4.4 IMPACT ON ORGANISATIONAL


PERFORMANCE
KM can also impact organisational performance either directly or indirectly in
addition to the impact on people, products and processes (Fernandez, Gonzalez
& Sabherwal, 2004). Direct impact of KM on organisational performance is when
innovative products that generate profit are created using knowledge. Direct
impacts affect revenues or cost and are explicitly linked to the vision and mission
of the organisation, and can be measured in terms of improvements gained from
return on investment (ROI). Building a learning organisation by enabling
knowledge sharing culture, tools and techniques helps reduce operating cost as
knowledge can be used to avoid mistakes, enhance current product and services,
and stay competitive.

Indirect impact of KM on organisational performance is from activities that are


not directly related to the organisationÊs vision, mission, cost and strategy.
Furthermore, indirect impact could not be measured easily as it cannot be
associated with transactions. For example, the use of KM to demonstrate
intellectual leadership within the industry would enhance customer loyalty
towards the organisationÊs products and services. Indirect impact also could
happen when the organisation uses the available knowledge to have a
respectable negotiation position with their competitors and partners. Economies
of scale and scope can be achieved using KM, which are considered as indirect
benefits. Economies of scale are defined as decrease in the average cost of a
product, when there is an increase in the quantity of product produced. Due to

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economies of scale, smaller factories have higher production cost compared to


larger firms, and this is attributed to several reasons such as high setup costs,
greater discounts for larger purchases from suppliers, and the ability to create
specialisation in different areas of production. Economies of scope are achieved
when the total cost of the same company producing two or more different
products is less than the sum of the costs if those two products are produced
separately by different company. As a result, firms producing several products
have lower cost compared to their competitors working on fewer products.

The ability of KM to provide a sustainable competitive advantage is another


example of indirect impact. Through knowledge, organisations can develop and
exploit other resources that enable them to be more competitive than their
competitors, even if these resources are the same. Tacit knowledge that are
content-specific are difficult to be learned, shared and bought in a ready-to-use
form. To obtain such knowledge, the competitors have to go through similar
experiences and learning process that are time consuming. Therefore,
competitors are limited in the knowledge that they have to compete with
organisations that utilise and manage their knowledge appropriately using
different KM processes. Figure 4.8 summarises the direct and indirect impacts of
KM and knowledge on organisational performance.

Figure 4.8: Impact of knowledge management and knowledge


on organisational performance

ACTIVITY 4.4

1. Give two types of KM impacts on organisational performance.


2. Discuss why the indirect impact of KM cannot be measured.
3. Differentiate between direct impact and indirect impact of KM on
organisational performance.

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SELF-CHECK 4.2

1. What are economies of scale and scope?


2. Why is the ability of KM in providing sustainable competitive
advantage considered an indirect impact?

4.5 KNOWLEDGE WORKER


The business world is continuously changing rapidly with uncertainty, market
fluctuations and intense competition (Awad & Ghaziri, 2004). The emergence of
knowledge management and knowledge economy has created company
employees with intellectual capital that is considered as the accumulated
experience, are highly committed, and have the capability to develop and
maintain the learning organisation. These employees are continuously in
demand across industries and domains, and are generally referred to as
knowledge workers. Figure 4.9 shows an illustration of a knowledge worker.

Figure 4.9: An illustration on knowledge workers


Source: renice.com/renice.illustration.html

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70 TOPIC 4 ORGANISATIONAL IMPACT OF KNOWLEDGE MANAGEMENT
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There are no specific definitions of what a knowledge worker is but the following
definitions would help you in understanding this term well. A knowledge
worker is a person who:

(a) Applies information and communication technology in performing daily


business and is considered as having direct impact on the efficiency and
productivity of the job and work processes;

(b) Follows and uses knowledge from internal and external sources, building
products that are distinguished by the specific information content in them;

(c) Is paid for his work which involves the processes of creating, manipulating,
or disseminating knowledge;

(d) Contributes to the companyÊs products and services by applying his


knowledge;

(e) Is able to obtain data/information from different sources; adds value to the
information; and distributes the value-added products to others;

(f) Uses his brain power (mental ability) more than his physical power to
produce value; and

(g) Makes a living by developing and using knowledge.

The above definitions have several similarities between them, which can be
considered as the general characteristics of knowledge workers. Knowledge
work encompasses experience, innovation, creativity and transformation of
experience into knowledge for leveraging products and services. These workers
understand their business, their customers, their competitors, the business
environment in which the organisation operates, the usefulness of information
technology, external factors that influences the decision making processes, and
how to blend these different elements to make the organisation successful in
every aspect. Figure 4.10 shows the makeup of the knowledge worker.

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Figure 4.10: The makeup of the knowledge worker


Source: Awad and Ghaziri, (2004)

Knowledge workers have several personality and professional attributes. Among


others they:

(a) Hold unique values and are able to understand and adopt the
organisationsÊ culture;

(b) Align personal career development with the corporate vision and the
achievements of strategic goals;

(c) Have the attitude to collaborate and share;

(d) Have innovative capacity and a creative mind;

(e) Have good understanding of the organisationÊs business environment;

(f) Have willingness to learn, unlearn, and utilise new ways, which would
result in better or improved ways of doing a job; and

(g) Have command of self-control and self-learning.

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4.5.1 Core Competencies of Knowledge Workers


Organisations developing their human capital to become knowledge workers
that could work in a competitive environment should include several important
competencies (Awad & Ghaziri, 2004). These competencies are thinking skills,
continuous learning, innovative teams and teamwork, innovation and creativity,
risk taking, decisive action taking, and a culture of responsibility towards
knowledge, which are further explained here:

(a) Thinking Skills


Knowledge workers are expected to have strategic thinking skills that
would enable them to improvise the product, help the organisation
improve the value-added contributions of its employees, and how the
knowledge workerÊs career, loyalty, and job satisfaction are affected by
continuous learning. Knowledge workers, regardless whether they are right
brain thinkers (people who use intuitive and non-linear approach in solving
problems) or left brain thinkers (people who use logic and facts in making
decisions) should be able to maximise their thinking ability to achieve
better results.

(b) Continuous Learning


Knowledge work involves innovation through continuous on-the-job
learning, seminars and work setting that encourages creativity and
advancement. This implies unlearning and relearning to be in pace with the
ever-changing business environments. Learning organisations have the
responsibility of providing continuous support and funding for employeesÊ
lifelong learning that will result in better products or quality of service.

(c) Innovative Teams and Teamwork


Organisations are operating in an intense competitive environment, which
requires innovative teamwork and joint decision making for solutions.
Teamwork is achieved through collaboration, cooperation and coordination,
in a setting that requires knowledge-sharing attitude and commitment to
knowledge exchange activities. The essential factor for successful teamwork
is strong management commitment and attractive incentives.

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(d) Innovation and Creativity


The push factor for innovation and creativity is for knowledge workers to
expand their vision for developing new products or services, which helps
improve the organisationÊs competitiveness. To be able to do this, it
requires knowledge workers to have opportunities to conduct research and
development activities and willingness to create knowledge and passion
for idea generation. It also requires the management to provide an
environment that cultivates knowledge sharing and brings out the best of
their employeesÊ abilities and potential. The main goal is in creating future
products and services that would help increase the organisationÊs revenue
and profit.

(e) Risk Taking and Potential Success


For organisations to be innovative and creative, they need to be risk takers.
Maintaining the existing condition minimises the organisationÊs risk but at
the expense of underutilising their knowledge workers and not being able
to improve their competitiveness. Higher risks give higher returns, but also
result in greater loss. Management can minimise these risks by working
together with the knowledge workers, sharing and exchanging the
knowledge that is available, working together as a team, and making a joint
decision with a calculated risk. The knowledge and experience of senior
knowledge workers should be captured in the employeesÊ knowledge base
and shared through KM activities.

(f) A Culture of Responsibility Towards Knowledge


This competency requires knowledge workers to be loyal and committed
to their managers and leaders as well as support their peers and the
organisation as a whole. When knowledge workers have problems, they are
expected to address these problems by discussing them with the relevant
parties, working on the best means to overcome the problem, and solving
the problem efficiently rather than griping about these problems.
Organisations should play their role in promoting a knowledge sharing
culture by encouraging knowledge exchange through referral or expert
seeking activity. This requires the organisation to seek knowledge workers
who are specialised and competent in addressing certain problems and
have the willingness to provide such knowledge if they are required by the
organisation. Creating a network of knowledge sources and knowledge
availability, and encouraging expert seeking activities are often vital
components in learning organisations.

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ACTIVITY 4.5

1. Discuss five definitions of a knowledge worker and describe three


important characteristics of a knowledge worker.
2. Explain three core competencies of a knowledge worker.
3. Explain why innovation and creativity are considered as core
competencies of a knowledge worker.
4. Justify why a knowledge worker needs continuous learning.
5. Argue the importance of thinking skills in a knowledge worker.

4.6 KNOWLEDGE TEAM


Knowledge workers work in dynamic and challenging environments, with
diverse unpredictable roles, tasks, actions and outcomes (Awad & Ghaziri, 2004).
They need to communicate and work closely with others to enable them to tap
into different areas of intellectual capital. The willingness to share, learn and
adapt will enable the flow of expertise knowledge across teams and individuals
in an organisation. Knowledge workers usually work in knowledge-intensive
communities as knowledge teams. Although teamsÊ functions and roles differ,
they share common attributes. These attributes of knowledge teams are: the need
to interact, communicate and share knowledge and expertise, having a common
purpose that shapes the teamÊs processes, and members are independent in
performing their work.

Organisations group together individuals with different expertise to work on


particular projects and tasks. This enables the development of knowledge teams
as the organisations heavily rely on knowledge workers in various functional
areas. The concept of knowledge teams is different to communities of practice,
where the people choose to belong in that community. Knowledge teams utilise
and share knowledge to achieve the organisationÊs mission, and to perform their
job functions. MembersÊ knowledge in each team complements the knowledge of
other members of the team.

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(a) Self-Managed Knowledge Teams


Teams naturally grow into self-managed knowledge teams as they mature.
Here, the team members share the leadership of the team depending on the
type of task or problem at hand. This enables the best person for the job to
lead the team rather than the usual scenario whereby one leader leads
everything regardless of his/her expertise. Rotation of the team leadership
in this manner enables every team member to learn about leadership role
and subordinate role, which helps bond the team members together.
Generally, knowledge teams have the potential to carry out projects that are
much more complex, and advance within the allocated budget and time.
Setting new goals and standards enable team members to strive for higher
performance.

(b) Virtual Knowledge Teams


Knowledge workers increasingly rely on electronic collaboration to work
on important knowledge projects, even when they are located in the same
building. Collaborators are generally separated by time and space, which
requires them to depend on technological collaboration tools such as
teleconferencing, electronic brainstorming, group display screens, discussion
threads and net meeting in performing the jobs. Virtual knowledge teams
are established when knowledge workers have to overcome physical
borders in performing their job. Members of virtual teams rely on who are
geographically, temporally and organisationally separated, are highly
dependent on information technology to communicate. Virtual knowledge
teams must maintain communication between them through regular
meetings to ensure accountability and to maintain group cohesion. This is
important as team members rely on such meetings to share issues, discuss
decisions made and explore emerging concerns.

4.7 CHIEF KNOWLEDGE OFFICER


The Chief Knowledge Officer (CKO) is a job designation for the person whose
main responsibility in an organisation is to be accountable for knowledge
creation, transfer, organisation, dissemination and overall management of
knowledge in the organisation (Awad & Ghaziri, 2004). As the main person in
charge of KM in an organisation, the CKOÊs main responsibility is identifying
knowledge within the organisation and encouraging employees to share it
among them.

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The main job functions of the CKO are as follows:

(a) Increase the returns on investment on knowledge – people, processes and


technology.

(b) Share best practices, reinforce the importance of knowledge sharing among
employee on a regular basis.

(c) Promote and improve company innovations and commercialise ideas or


products that can contribute to the companyÊs revenue.

(d) Minimise brain drain and human turnover at various levels in the
organisation and identify counter measures to address this problem.

Therefore, CKOs should be good in communications, interpersonal skills, people


management, technical skills and leadership to carry out the role effective. Other
skills of the CKO include, a facilitator, a thinker and a juggler. These skills are
important as the CKO carries out multiple roles such as:

(a) Agent of change – This requires the CKO to change the rather usual culture
of knowledge hiding to adopting the culture of knowledge sharing among
employees in the organisation. This requires the CKO to be the champion of
change among knowledge workers and management.

(b) Investigator – This requires the CKO to identify the problems associated
with knowledge sharing, and outline the procedures for implementing
alternative solutions.

(c) Liaison – The CKO is the liaison officer between employeesÊ expectations and
how the KM processes in the organisation functions to meet these
expectations.

(d) Listener – This role requires the CKO to reach out to employees,
interpreting their ideas and thoughts, and making conclusions out of these
interactions. Listening helps the CKO in understanding the problems faced
by the employees and management with regard to KM processes.

(e) Politician – The CKO should solve problems by not creating problems. A
respectable CKO is well-mannered and has good contacts, excellent
diplomacy skills and knowledge about the organisation. These skills will
help the CKO in persuading employees and the management in engaging
in KM processes and improving the acceptance of a new KM environment.

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• Knowledge management processes impact organisations at several levels:


people, processes, products and overall organisational performance.

• Knowledge management impact on people is by facilitating the employee


learning process, enabling employees to be more adaptable and enhancing
their job satisfaction.

• Knowledge management impact on processes is through three dimensions and


these are process effectiveness, process efficiency and process innovation.

• Knowledge management impact on products produced by organisations is


through value-added products and knowledge-based products.

• Knowledge management impact on organisational performance is directly


through innovative products that generate profit using knowledge or
indirectly through activities that are not directly related to the organisationÊs
mission, vision, cost and strategy.

• The emergence of knowledge management and economy has created company


employees whose intellectual capital is considered as accumulated experience.
They are highly committed and have the capability of developing and
maintaining the learning organisation. They are known as knowledge workers.

• A knowledge worker is a person who contributes to the organisationsÊ


products and services by applying his knowledge through information and
communication technology.

• The core competencies of knowledge workers are thinking skills,


continuous learning, innovative teams and teamwork, innovation and
creativity, risk taking, decisive action taking, and having a culture of
responsibility towards knowledge.

• Knowledge teams allow knowledge workers to utilise and share knowledge


for achieving the organisations mission and to perform their job function.

• A Chief Knowledge OfficerÊs main responsibilities are knowledge creation,


transfer, organisation and dissemination as well as overall management of
knowledge in the organisation.

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78 TOPIC 4 ORGANISATIONAL IMPACT OF KNOWLEDGE MANAGEMENT
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Chief Knowledge Officer Innovations


Economies of scale Job satisfaction
Economies of scope Knowledge team
Effectiveness Knowledge worker
Efficiency Value-added products
Employee adaptability Value-based products
Employee learning

Awad, E., & Ghaziri, H. H. (2004). Knowledge management. New Jersey:


Prentice Hall.
Becerra-Fernandez, I., Gonzalez, A., & Sabherwal, R. (2004). Knowledge
management – Challenges, solutions, and technologies. New Jersey: Prentice
Hall.
Davenport, T. H., & Prusak, L. (1998). Working knowledge: Managing what your
organisation knows. Massachusetts: Harvard Business School Press.
Davenport, T. H., & Prusak, L. (2000). Working knowledge: How organisations
manage what they know. Massachusetts: Harvard Business School Press.
Natarajan, S., & Shekhar, S. (2000). Knowledge management: Enabling business
growth. New Delhi: McGrawHill.
Nonaka, I., & Takeuchi, H. (1995). The knowledge creating company: How
Japanese companies create the dynamics of innovation. Cambridge: Oxford
University Press.

Copyright © Open University Malaysia (OUM)


Topic Strategic
5 Knowledge
Management
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Discuss the five phases of knowledge development;
2. Describe the important types of knowledge management
infrastructure;
3. Discuss organisational knowledge transfer methods;
4. Identify the 5Ps of knowledge management; and
5. Discuss the important issues when integrating strategic knowledge
management into practice.

INTRODUCTION

What business strategy is all about; what distinguishes it from all other kinds
of business planning – is, in a word, competitive advantage. Without
competitors there would be no need for strategy, for the sole purpose of
strategic planning is to enable the company to gain, as effectively as possible,
a sustainable edge over its competitors.
– Keniche Ohnae

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80 TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT

A military operation involves deception. Even though you are competent,


appear to be incompetent. Though effective, appear to be ineffective.
– Sun-Tzu, The Art of War

Victorious warriors win first and then go to war, while defeated warriors go to
war first and then seek to win.
– Sun-Tzu, The Art of War

The above quotes argue the need for having a strategy in performing any
organisationÊs mission. The same is true for managing knowledge as any
successful implementation of knowledge management initiatives requires proper
strategic to achieve the intended goals.

In Topic 4, you have studied the organisational impact of knowledge


management on people, processes, products and organisational performance.
The topic also has discussed about knowledge workers and their core
competencies, and the role of knowledge team in managing organisational
knowledge. Then, the role of CKO as the person responsible for the overall
management of knowledge in organisation is presented.

This topic discusses the key techniques to building organisational knowledge


processes and the important principles that enable the development of strategic
knowledge management. The topic describes in detail the five phases of
organisational knowledge development: knowledge sourcing, knowledge
abstraction, knowledge conversion, knowledge diffusion, and knowledge
development and refinement. Then, the creation of organisational knowledge
that is dependent on the organisationÊs managerial, technical and social
infrastructure is presented. The topic also discusses the identification, capturing
and sharing of knowledge that brings strategic business value to organisations,
and describes the five Ps of knowledge management: planning, people,
processes, products and performance.

ACTIVITY 5.1
1. Discuss why knowledge management has to be managed
strategically.
2. Describe the term „strategy‰ based on your understanding.
3. Argue when organisations need to adopt a strategy.

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TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT 81

5.1 KNOWLEDGE DEVELOPMENT PHASES


Knowledge has a unique characteristic that enable the increase in its value when
it is frequently used in the business environment. The key value of knowledge to
organisations is depended on the ability in duplicating and sharing it across the
organisation and the people who uses it. Knowledge reduces the time required to
acquire new competencies and understanding, and consequently contributes cost
saving in lost opportunities for organisations. The development of knowledge is
organisations are a continuous process involving people, processes and
information. Organisation knowledge relies heavily on collective and individual
contributions, and evolves over time through use, review and learn from
knowledge sources.

Knowledge creation and innovation processes in organisations are nowadays


considered as the core business as more people are spending most time in
performing this process in projects, meetings, discussions and forums to build
the organisationÊs knowledge base or knowledge repository. The five stages of
organisational knowledge development of knowledge sourcing, knowledge
abstraction, knowledge conversion, knowledge diffusion, and knowledge
development and refinement are shown in Figure 5.1. The knowledge
development process is dynamic, responsive and iterative. This enables it to
receive feedback from many different sources throughout these stages, which
may influence subsequent knowledge construction.

(a) Knowledge Sourcing


The important stimulus in initiating the knowledge creation process is
when there is a knowledge gap between what is known and what has to be
known. In other words, the organisation wants to learn new knowledge.
This learning is done by reviewing existing documents and organisational
knowledge sources are called knowledge sourcing. Sources that can be
tapped in getting new knowledge include expert guidance from
consultants, specialised and prior held by employees, organisational
records, the companyÊs intranet, case studies bank and project repositories.

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82 TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT

Figure 5.1: Stages of organisational knowledge development

Knowledge sourcing can be considered as an important stage of knowledge


creation. The richness and accessibility of the knowledge sources would
really help the knowledge creation process. For example, to introduce a new
model of Proton would require appropriate sources of guidance such as:
(i) The current market trend for passenger cars;
(ii) Customer feedback;
(iii) Sales report according to model type of competitors;
(iv) Contribution from experienced staff; and
(v) Previous model development reports.

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(b) Knowledge Abstraction


General principles and concepts are developed to guide the construction of
the new knowledge after the knowledge sources were analysed, and this
process is known as knowledge abstraction. This knowledge abstraction
process helps in structuring the insights acquired during the knowledge
sourcing process and in inferring new knowledge from the guidelines,
procedures and other emerging issues. Here, the expert knowledge seekers
are depended on their own knowledge, with the other sources helps in
validating or enriching that knowledge. On the other hand, less
experienced people are very much depended on external knowledge
sources.

The time taken to complete the process of abstraction can be lengthy


depending on whether the acquired knowledge is politically sensitive,
complex or needs approval from certain groups or committees. However,
many organisations fail to provide sufficient time required to reflect and
weigh the various sources before abstraction. Failure to carefully analyse
the knowledge sources and develop some useful framework to guide the
knowledge creation process could result in faulty reasoning and undesired
outcomes. The role of knowledge workers here are to recognise the
importance of reflection and consideration in the knowledge creation
process.

For example, if Proton wants to gather customersÊ feedbacks regarding its


models, the target population must be identified, i.e. customers using basic
model, intermediate model, sport model and luxury model. Then some new
requirements are added such as the car buying patterns and competitors
pricing structure.

(c) Knowledge Conversion


During the knowledge conversion stage, knowledge from the abstract
foundation is converted into different forms of useful applications, which
can be tested and shared with others. Knowledge conversion describes the
phase during which the different ideas and principles are refined into a
specific result. Knowledge can be in the form of codified or embodied.
Codified knowledge is knowledge that can be preserved in writing or other
permanent form, and is accessible to anyone requiring it. This knowledge
can be built into artefacts such as models, equations, algorithms and
guidelines, which help people, understand it better.

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84 TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT

Embodied knowledge on the other hand is the tacit knowledge embedded


in individuals. This type of knowledge is difficult to be codified and is
shared through stories, metaphors, analogies or personal advice when it is
required. Embodied knowledge is hard to be accessed without continuous
involvement with the knowledge creators.

In the example of Proton discussed earlier, codified knowledge relating to


feedback regarding existing models would be in the form of customer
satisfaction reports, customer complaints and sales reports. Embodied
knowledge here would be the experience shared by the model development
team members and marketing experts. Most organisations depend on these
two types of knowledge conversion during the knowledge creation process.
(Compared with our earlier discussion about NonakaÊs SECI knowledge
conversion process, embodied knowledge is tacit knowledge, while
codified knowledge is explicit knowledge.)

(d) Knowledge Diffusion


Knowledge diffusion is the spread of knowledge when it is codified or
embodied to a wider audience. Diffusion can take place in organisation
through the use of communications media such as newsletters, intranet,
meeting, seminars and videos, modelling of new practices, and specialised
training. The success of knowledge diffusion relies on the level of previous
knowledge by the employee and the effectiveness of the tools and
techniques available to share the knowledge. Knowledge diffusion is
considered successful when the recipients can comprehend and integrate
the insights into their own experience. However, embodied knowledge that
is based on experience, judgment and expertise are difficult to be shared
and transferred to others.

For example, Proton can use various media such as internet, intranet,
feedback forms, and other to gather customersÊ knowledge of using the
previous model. As such the valuable knowledge from customers can be
shared, and Proton can leverage von this knowledge in designing future
knowledge.

(e) Knowledge Development and Refinement


Knowledge is regularly updated, refined and enhanced through additional
experience and feedback over time. This gradual development of
knowledge development and refinement is considered as one of the
important features of knowledge management. This process ensures that
the knowledge remains current and useful. Therefore, the organisations
challenges are on capturing the required knowledge and hold knowledge
for use by others. Organisations also need to ensure that the newly created

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TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT 85

knowledge is reviewed and updated constantly to show any new


understanding and insights that has been gained. For example, the
knowledge of customersÊ preferences and feedbacks will enable Proton to
have the knowledge of what the customers wants. However, this
knowledge has to be regularly updated and further refined. By doing this
Proton would have generated and diffused new knowledge.

These five phases of knowledge development shows the importance steps


of organisational knowledge creation. Although these stages of knowledge
creation contribute to effective organisational knowledge, but it may not
always be complete especially in cases where the expert knowledge is very
specialised that makes it difficult to be communicated and shared. On the
other hand, only knowledge sourcing will take place during the knowledge
creation process if the knowledge user has very limited experience.

ACTIVITY 5.2
1. List and define the five knowledge development phases.
2. Discuss the importance of the knowledge development phases in
managing organisational knowledge.
3. Describe with appropriate examples, how knowledge diffusion
can take place in an organisation.

5.2 CHARACTERISTICS OF KNOWLEGDE


Organisational knowledge creation greatly depends on several systems and
processes that draw up the organisational infrastructure. There exist three types
of infrastructure that can be found in most organisations and these are
managerial, technical and social.

5.2.1 Managerial Infrastructure


The importance of managerial infrastructure on knowledge creation is usually
unrecognised. Nevertheless, managerial support for knowledge workers and the
formal management processes in the organisation significantly affect the results
of having knowledge management initiatives. The managerial infrastructure
gives a framework for resourcing, decision making and innovative practices to
ensure that the knowledge activities can be carried out successfully.

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86 TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT

Management is responsible for providing the resources and support to ensure


that organisational goals are achieved. Managers are in charge of the operational
divisions and ensure that staff, finances and other resources are used effectively.
Managers work with knowledge workers as facilitators and partners, avoiding
traditional roles of controller of tasks and activities. This is due to the fact that
knowledge workers requires autonomy and trust from the management in
performing their job function and expect the managers to play the role as
supportive agents providing guidance, feedback and resources to obtain the
planned outcomes.

Management supports knowledge workers at the organisational level through its


employment policies and procedures. The human resources management (HRM)
department is responsible in managing recruitment, retention, development and
training of staff in organisations.

The HRM process make sure that the right people are employed, well supported
throughout their careers, and they are highly motivated to remain with the
organisation by building good employee support systems and rewarding
schemes. HRMÊs important function is in aligning the people processes with the
corporate priorities, so that employees strive to achieve the organisationÊs goals.
In a knowledge-intensive environment, the main emphasis is in providing the
necessary support required for development, growth and the continuous
development of knowledge-related capabilities and potentials. HRM services
also assist with knowledge transfer across organisation through and other forms
of training in other departments and units.

Therefore, management infrastructure greatly affects the knowledge settings


where people works and contributes in the development of organisational
knowledge. Proper management of human resources within the organisation will
ensure that the potential of the knowledge workers are properly tapped,
managed and utilised in achieving the organisational goals.

5.2.2 Technical Infrastructure


Technical infrastructure is vital in providing support for the knowledge
management process such as information management systems for the
management of finances, information, records, customers, human resources,
projects and others. The technical infrastructure provides the technological
means that enable people to share, exchange and transfer information and
knowledge. These systems can be used to record, transmit and extract data for
different purposes.

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The continuous exchange and modification of knowledge requires new and


better approaches in handling the related problems and challenges. This process
depends on systems that are flexible and responsive for capturing and
maintaining the changing knowledge. Some organisations may limit access to
systems and such reluctance to allow wide-spread access to different knowledge
sources usually arises from the concern for the way the information will be
utilised or the belief that knowledge equates to power. However, information on
how these different systems are interrelated and who has the access rights to
different forms of knowledge can help identify these access barriers. The
technological infrastructure can be an important component of a successful
knowledge management strategy depending on the organisational approach and
knowledge policy.

Organisations are depended on their information services as the key elements of


their knowledge strategy. These services include individual support to users, and
providing the required access to the resources that support knowledge creation
and abstraction. The shift from paper to electronic forms of information has
allowed a more responsive and accessible service to be operated centrally or from
the end users locations. Services such as library services or project repositories
must support the needs and work priorities of knowledge workers. These
services could highlight knowledge that are gained by external experts, and help
establish capable and informed knowledge users in the organisations.
Knowledge workers usually are aware of the need to disseminate their
knowledge sources widely and through various avenues.

Records management also is a vital part of the technological infrastructure as


organisations generate enormous quantities of records that are required to manage
effectively and efficiently. Core organisational data gathered from these sources
need to be identified, catalogued, and stored so that they can be retrieved when
required. In established organisations, there may be policies, staffs assigned to
record management functions, and clear guidelines on what need and need not
preserved. Records management complements knowledge management as
organisation records are valuable sources of learning and knowledge.

Technical infrastructure thrust is in making knowledge management as an


integrated system that is accepted and used across organisational units.
However, it should be noted that technology and information systems are only
part of the knowledge management infrastructure.

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5.2.3 Social Infrastructure


Strategic knowledge management requires the creation of a strong link between
the process of capturing and sharing knowledge in organisation and the strategic
priorities of the organisation. The social infrastructure helps this process by
assisting and encouraging the social and professional interactions of organisation
employees with colleagues, clients and stakeholders. This infrastructure also
provides understanding into the knowledge context such as the values and
priorities that should be uphold in the social interactions.

Several factors influence the social structure of an organisation such as different


emphases on collective or individual results, competition or collaboration, long-
term versus short-term priorities, external or internal relationship building and
traditional or innovation. These factors can lead to several significant differences
in the organisational vision, mission, social construction of the work context and
the overall infrastructures which operate.

Organisations that have competitive framework that encourages short-term


entrepreneurial behaviour would find it difficult to establish an effective
knowledge context as employees will concentrate on achieving performance
targets, and may find ways to limit the success of fellow colleagues by holding
back information. This behaviour would discourage people from sharing
information and knowledge, thus making the knowledge management initiatives
fail. However, organisations that stress on relationship building, long-term
results, collaboration and cooperation, and a focus on the corporate good will be
more capable of managing knowledge effectively.

Knowledge management should reflect the organisational context that it


operates. Successful knowledge communities reflect their core business focus and
are based on the requirements of different stakeholders such as employees,
clients, shareholders, business partners and industry players. Therefore, each
knowledge environment should be developed differently to reflect the different
needs and emphases of the organisation.

Knowledge is drawn from people and most people have developed their
knowledge as a result of years of experiences, learning and interacting with other
people. However, many knowledge management processes are built around
systems and most of these fail as these systems fails to address the needs of
people or communities. Technology complements human-based processes in
implementing knowledge management. Therefore, knowledge management
should be based on the basic understanding of people, their requirements, their
preferences, and the ways in which they can be motivated and encouraged to
share their attitudes and values toward knowledge sharing.

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Knowledge management depends on the development of peer relations,


cooperation, supporting technologies, reward for sharing and a recognition that
there is corporate value in helping others as well as themselves through the
interchange of knowledge.

ACTIVITY 5.3

1. List three types of knowledge management infrastructure


required in organisations.
2. Justify why the technical infrastructure is vital in supporting
knowledge management processes.
3. Discuss the importance of understanding the needs of people or
communities in managing knowledge.

5.3 HARNESSING ORGANISATIONAL


KNOWLEDGE
Organisational knowledge exists in many forms, ranging from codified records
to expertise found in peopleÊs head, where different knowledge streams
influence to the development of corporate intellectual capital. However,
organisations face two important challenges in effectively using this knowledge
and these are: knowing what is known by the employees and facilitating the
knowledge capture and sharing.

The organisationÊs core knowledge is the accumulated mass of strategic


knowledge which is identified, publicly valued, captured and disseminated
across units. This core knowledge promotes the best performance and ensures
that key strategic priorities are served. It indicates what knowledge is valuable in
the organisation and ensures the preservation of areas that are vital in
maintaining the organisational effectiveness. The thorough understanding of the
organisationÊs core knowledge can help clarify what employees should share
across the corporate boundaries, and provide a stronger focus on strategic
requirements and the development of the necessary competencies for the
organisation.

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The failure to clearly understand what constitute the organisationÊs core


knowledge lead to significant losses to the business as employees do not
understand what is actually expected from them in supporting the organisationÊs
knowledge. The definition of organisationÊs core knowledge should include both
the short-term and long-term priorities. Although many employees have many
useful capabilities and skills that could contribute to the organisation, but their
contributions are limited to their defined job functions. This limited use of
existing employeesÊ capabilities may reduce the value of these employees to the
organisation, thus reducing the organisationÊs innovativeness. It is important that
organisations are aware of the current and on-going development in its
employeeÊs skills, knowledge and capabilities. This can be done through regular
audits of employees potential and current capabilities, which maximises
employeesÊ contributions.

(a) Knowledge Transference


Organisations need to be clear about their knowledge requirements
especially in the areas that are vital to the core business. The way knowledge
is generated and transmitted within and throughout the organisation can
greatly affect its transferability. Figure 5.2 shows three different types of
knowledge transference systems that can be found in organisations. These
systems function in different manners in terms of how they integrate
communication and knowledge sharing across different levels and areas of
organisation, and are known as knowledge chains, hubs and webs.

Knowledge chains are still popular amongst many traditional organisations


and are widely used for controlling and organising knowledge. Knowledge
chains rely on one-to-one exchanges, usually between supervisors and
subordinate to generate an understanding of how knowledge is utilised and
the manner work is performed. However, this knowledge chain is a limited
technique that is linear and communications are in a top-down manner.
Although it can help in standardising work, producing reliable and orderly
practices, it also reduces the potential for employeesÊ creativity and
flexibility in performing a task. Knowledge sharing is highly depended on
the ability of the middle managerÊs skill in getting other employees together.
In knowledge chains, the knowledge recipient and the knowledge
contributor are more passive in the knowledge exchange process.

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Figure 5.2: Approaches to organisational transference

Alternatively, centrally coordinated knowledge hub can provide a more


effective coordination of various knowledge sources. These centralised
units can coordinate several knowledge sources and promote their use
throughout the wider knowledge community. Project repositories and
information services, centralised information technology services, as well as
emerging knowledge services operate on these principles, providing the
required links among people, objects and information avenues. These
services provide the necessary support required by knowledge creators and
seekers and are aimed in avoiding duplication and wastage of resources.
These units also work as communication hubs, encouraging knowledge
sharing and the capture of current initiatives. The effectiveness of the

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92 TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT

centralised services hub in effectively diffusing knowledge to individual


employees would determine the organisationÊs knowledge management
overall success. However, central coordination of activities would limit
access to business related knowledge that will hinder knowledge diffusion
activities.

A more flexible and dispersed knowledge sharing environment is the


knowledge web that enables expertise sharing between people. Each
employee might have a different network patterns, determined by their
expertise, knowledge about others and certain knowledge needs. This
employee may be a node for others as an expert source of knowledge, while
also engaging others as nodes for information. Therefore, each person on
the knowledge web would assume the role of recipient and disseminator of
knowledge based on different circumstances. This type of knowledge
network is based on the building improved links with others, and is open-
ended and dynamic in nature. Communication channels in the knowledge
web may evolve over time as several options are tested for value and
adopted if they are useful. Over time, some units or people will become the
key nodes in the web for their reputation and reliability, and serve as
guidance to others. However, these may not be formally acknowledged
within the organisation as authoritative sources. The knowledge web model
enables more active and effective use of knowledge in the organisationÊs
business environment. The major limitation of this model is that the access
to expert knowledge relies on people finding about the expert. The
identification and development of relationship with certain nodes requires
skills such as identifying the appropriate nodes, establishing connections
and maintaining these connections, which might not be possible by junior
employees as they would have limited access to the knowledge web.

Knowledge chains, hubs and webs provide different advantages to


organisations and are considered as complementary strategies. Organisations
should incorporate a cohesive system of interconnecting communication
channels that help in identifying and sharing of tacit knowledge.
Employees are depended on access on these three different forms of
communication to perform knowledge work.

ACTIVITY 5.4
1. What constitutes the organisational core knowledge? Discuss.
2. Differentiate the three types of knowledge transference systems
that can be found in organisations.

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5.4 THE FIVE PS OF STRATEGIC KNOWLEDGE


MANAGEMENT
Knowledge management is a complex process of social change and systematic
development, and is depended on five key systems to achieve complete integration
into the organisational setting. These are the five Ps that consists of planning,
people, process, products and performance, and are shown in Figure 5.3.

Figure 5.3: The five Ps of strategic knowledge management

(a) Planning
Strategic knowledge management needs comprehensive planning to ensure
proper execution of related activities. Planning would help clarify the
organisationÊs knowledge goals and establish effective values and processes
in supporting those directions. Both long and short-term goals should be
clearly defined to ensure that these goals are inline with the organisationÊs

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94 TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT

mission and vision. Technological infrastructure planning should also


reflect the goals of strategic knowledge management so that these plans can
be carried out effectively. The planning process is time consuming and
highly depended on many activities, requiring in-depth consideration of
the whole knowledge context. To ensure the planned strategies are
implemented successfully, continuous monitoring and measurement
should be carried out periodically.

(b) People
An important aspect of strategic knowledge management is the recognition
that strategic knowledge depends on people, as they are the ones who have
the knowledge and manage the systems as well as the processes in the
organisation. Therefore, their support to the strategic knowledge process is
vital to the organisationÊs success. A knowledge sharing culture that
promotes knowledge diffusion can be built through effective knowledge
hubs, networks, community of practices and other social community
strategies. Employees need to be convinced that there are social, economic
and logistic benefits from their knowledge partnership with others. This
implies that knowledge management is strongly supported by human
resources processes and procedures, and by the management at all levels of
the organisation. The organisation priorities and perceived values would be
a major influence on the way how employees react to knowledge
management initiatives.

(c) Processes
Knowledge management practices need to be practiced using effective
workplace techniques. Strategy, principles, processes and practices
alignment need to be well-managed so that knowledge management
principles can be implemented without any setback. Messages about
what is important may be perceived differently across organisation, and
employee should consider the rhetoric and the reality of consequences
when deciding how they should work and interact. If there is little tangible
commitment to knowledge principles, they will ignore the public messages
in favour of the local reality. Therefore, the actual processes require to be
monitored regularly to make sure that it reflects the organisations
knowledge priorities. Failing to do this would make the overall knowledge
management strategy is contradicted by the social context in which the
knowledge operates. The management infrastructure is very important
here for ensuring aligned practices, where managers could influence
significantly over the process operation.

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To support the knowledge processes and the need of knowledge workers,


different types of knowledge networks, ranging across communities of
practice, knowledge hubs and knowledge webs should be built. Such
efforts also require leadership, communication and publicising of their
existence so that new employees could get connected and gain benefit from
it. Therefore, the recognition of the requirement to be in the knowledge
communities should also underlie the development of knowledge
processes. As such the development of new skills and competencies should
be encouraged to make best use of these opportunities.

(d) Products
Organisations develop their own knowledge products that may be
provided to clients or used within the organisation as shared knowledge
objects. Emphasising the development of core knowledge helps to identify
the range of knowledge products that should be cultivated, encouraging
their definition, capture, management, distribution and sharing. Different
sources of embodied knowledge need to be identified to encourage their
access by other employees. On the other hand, explicit knowledge needs to
be captured and distributed in an efficient and timely manner to make it
readily accessible by the employees. The identification and encouragement
of knowledge object sharing must be carefully planned since the important
goal here is in ensuring that all valuable knowledge is preserved and
accessed and both the long and short-term requirements are achieved.

(e) Performance
Organisational knowledge management must be regularly reviewed to
ensure that the financial and social investment is positively influencing the
intellectual and social capital of the organisation. Organisations also must
ensure that it balances long and short-term priorities to enable effective
financial management and development for future. Many companies strive
to find the best solutions for achieving efficient and cost effective, as well as
innovative approaches to their business challenges. Nevertheless, business
are aware that there exist many ways inefficiencies thrive and undermine
the effective development of better and improved processes, and the same
is true for knowledge management. Since knowledge management involves
long-term strategy that is culturally driven, there are many challenges in
measuring its impact and in determining how effectively the systems and
processes are contributing to better knowledge management practices.
Therefore, knowledge management needs to be evaluated continuously to
measure how well it is integrated into the business context, with the
expected outcomes clearly defined.

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96 TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT

ACTIVITY 5.5

1. Discuss the need for organisations to have comprehensive planning


for strategic knowledge management.
2. How are knowledge processes and knowledge workersÊ requirements
supported by the „process‰ system of the five Ps? Discuss.
3. Describe knowledge sharing as a core competency of knowledge
workers in organisations.

SELF-CHECK 5.1

1. What are the five Ps of strategic knowledge management?


2. Why the organisational knowledge management must be reviewed
regularly?

5.5 BUILDING STRATEGIC KNOWLEDGE


MANAGEMENT
Knowledge management can be viewed as a strategic activity that helps build the
strategic plans of the organisation, which ensure knowledge management
activities contribute to the firmÊs profit and strategic advantage. Organisations
also motivate knowledge workers to be more innovative and creative in
performing their roles to increase the firmÊs position in the marketplace.

To be competitive in the marketplace, employees need to adapt themselves to


change as change is the essential element in the work environment. Employee
joins the organisation with a set of skills, knowledge and attributes that was
shaped by experience, education and culture. These entry level skills, knowledge
and attributes are further developed in the new work setting, where the
organisational culture, colleagues, and work experience contributes to better
learning opportunities for the employee. This developmental process ensures
that the basic competencies of employees match the work setting that they would
operate, and provides ground for instilling the important behaviours required to
accomplish the business results needed by the organisation.

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Capacity building must be established throughout the organisation to build long-


term potential as such effort would ensure that knowledge workers develop
suitable competencies and capabilities to meet future needs and challenges.
Several different organisational directions can be seen over time and this requires
new and different skills in the workforce. This is encouraged by forward thinking
and adaptable leaders who examine the external environment, review emerging
trends and identify the best techniques to lead these change processes. Capacity
building motivates knowledge workers to anticipate and prepare for long-term
strategic needs of the organisation. Therefore, capacity building involves the
ability to identify, reflect, influence, implement and continuously adapt in the
light of new knowledge and influences. This is a core organisational capability
that requires to be integrated in the knowledge environments and it should be
apparent in those seeking to shape the knowledge management process.

(a) Knowledge Sharing as a Core Competency


There exist several important core competencies that could be developed in
knowledge workers through knowledge management. These competencies
are those attributes that are specifically supported within the firm and,
as such are hard to duplicate externally. Nevertheless, the process of
identifying these core competencies needs to be carried out carefully and
should focus on competencies that can be easily devalued and substituted,
that could reduce the capabilities of the organisations. Knowledge sharing
is one core competency in organisation where people need to actively share
their knowledge amongst employees in the organisation. Management
should encourage giving rewards to group rather than individuals for their
sharing initiatives and provide the required resources for the sharing
activities.

(b) Developing a Strategic Knowledge Community


Knowledge management focuses on developing a strategic knowledge
community by encouraging sharing of knowledge through community and
the building of improved practices through community interaction. During
the construction of knowledge management frameworks, the important
factor is in recognising the need to include and integrate the whole
community rather than some selected people. This will affect the ways
how the social and physical infrastructures are built, and manner how
leadership is reflected across the organisation. The key element in this
process is the encouragement of knowledge diffusion amongst employees
in the organisation. The knowledge environment in organisations should be
user-focused and system-dictated to enable any stakeholders identifying
and accessing knowledge sources easily. This will change the way how

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98 TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT

power and control is exercised in traditional organisation where managers


seek to maintain control over intellectual content, access and distribution.
To overcome these problems, the organisation must have strong leadership
as the focus moves from unit-based control to collective good. Therefore, it
requires significant change in expectations and accountabilities in the work
settings and reinforces the need for knowledge sharing to be instilled as a
core competency.

(c) Adding Value


Knowledge management must adds value to organisation as it has the
potential to be an important organisational influence factor in the long
term. However, it also requires major shifts in the way organisations view
their employees, systems and how they interact and communicate.
OrganisationÊs activities that are linked with knowledge management effort
must be examined to ensure that it does add value. Management also must
avoid adopting other firmÊs practices and theoretical models without prior
consideration of existing organisational knowledge sharing culture.
Therefore, the development of knowledge management in organisations
needs to be carefully planned and constantly reviewed to ensure that every
element are contributing to the consistent implementation of an effective
organisational knowledge culture and practices.

ACTIVITY 5.6

1. Discuss the knowledge development phases as a continuous


process involving people, processes and information.
2. Describe the three different knowledge management infrastructure
and discuss how they support and complement each other.
3. Compare the knowledge chains with the knowledge web
transference systems.
4. Argue the need for the „people‰ element in the five Ps of strategic
knowledge management.
5. Discuss how knowledge management can add value to an
organisation in the long term.

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Knowledge increases in its value when it is frequently used in the business


environment and the value of knowledge to organisations depends on the
ability in duplicating and sharing it across the organisation and the people
who use it.

There are five stages of organisational knowledge development, namely,


knowledge sourcing, knowledge abstraction, knowledge conversion,
knowledge diffusion, and knowledge development and refinement.

There are three types of infrastructure that can be found in many


organisations and these are managerial, technical and social.

The managerial infrastructure provides framework for resourcing, decision


making and innovative practices, and this ensures that knowledge activities
are performed.

The technical infrastructure provides the technological means that enable


people to share, exchange and transfer information and knowledge.

The social infrastructure helps in encouraging the social and professional


interactions of organisation employees with colleagues, clients and
stakeholders.

Organisational knowledge exists in many tacit and explicit forms, where


different knowledge streams influence the development of corporate
intellectual capital.

Knowledge is generated and transmitted within and throughout an


organisation through three different types of knowledge transference systems
– knowledge chains, hubs and webs.

Knowledge management is a complex process of social change and


systematic development. It depends on five key systems to achieve complete
integration into the organisational setting: planning, people, process,
products and performance.

Employees need to adapt themselves to changes as change is the essential


element in the work environment.

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100 TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT

Knowledge sharing is one core competency in organisations where people


need to actively share their knowledge with other employees in the
organisation.

Knowledge management frameworks need to include and integrate the


whole community rather than selected people only.

Knowledge management must add value to the organisation as it has the


potential to be an important organisational influence factor in the long term. To
achieve this, major shifts in the way organisations view their employees,
systems and how they interact and communicate must be changed.

Human resources management (HRM) Knowledge sourcing


Knowledge abstraction Knowledge transference
Knowledge chains Knowledge webs
Knowledge conversion Managerial infrastructure
Knowledge diffusion Social infrastructure
Knowledge development and Strategic knowledge management
refinement
Technical infrastructure
Knowledge hubs

Awad, E., & Ghaziri, H. H. (2004). Knowledge management. New Jersey:


Prentice Hall.
Becerra-Fernandez, I., Gonzalez, A., & Sabherwal, R. (2004). Knowledge
management – Challenges, solutions, and technologies. New Jersey:
Prentice Hall.
Debowski, S. (2006). Knowledge management. New Jersey: John Wiley & Sons.
Loudon, K. C., & Laudon, J. P. (2007). Management information systems –
Managing the digital firms. New Jersey: Prentice Hall.

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TOPIC 5 STRATEGIC KNOWLEDGE MANAGEMENT 101

Natarajan, S., & Shekhar, S. (2000). Knowledge management: Enabling business


growth. New Delhi: McGrawHill.
Nonaka, I., & Takeuchi, H. (1995). The knowledge creating company: How
Japanese companies create the dynamics of innovation. Cambridge: Oxford
University Press.
Schreiber, G., Akkermans, H., Anjewierden, A., de Hoog, R., Shadbolt, N.,
de Velde, W. V., & Wielinga, B. (1999). Knowledge engineering and
management: The CommonKADS methodology. Cambridge: MIT Press.
Wigg, K. M. (1997). Knowledge Management: An introduction and perspective.
Journal of knowledge management, 1(1), 6–14.

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T op i c Knowledge
6 Management
Processes
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Describe knowledge discovery and the mechanism to discover
knowledge;
2. Differentiate between knowledge discovery in database and data
mining;
3. Explain how data mining technique works;
4. Discuss the techniques used for knowledge capture;
5. Compare different knowledge representation techniques;
6. Identify ways to share knowledge between individuals and groups;
and
7. Discuss how knowledge is applied towards making decisions.

INTRODUCTION
The only way to discover the limits of the possible is to go beyond them into
the impossible.

Arthur C. Clarke

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TOPIC 6 KNOWLEDGE MANAGEMENT PROCESSES 103

The above quotation shows that people have to push the boundaries of their
work to achieve the most out of what is available. Then and only then, can they
claim that they have discovered the limit. The same is true in exploring the limits
in discovering, capturing, representing, sharing and applying knowledge, where
the limit is yet to be discovered.

In Topic 5, you have studied the key techniques to establish organisational


knowledge processes and the main principles that enable the development of
strategic knowledge management. The previous topic also described the five phases
of organisational knowledge development and the creation of organisational
knowledge that is dependent on the organisationÊs managerial, technical and social
infrastructure. You also have learned how knowledge management can bring
strategic business value to organisations, and the five Ps of knowledge
management, which are planning, people, processes, products and performance.

This topic discusses the knowledge management processes used in managing


knowledge. In this topic, the knowledge management processes will focus on
activities involving knowledge discovery, capturing, sharing, representation and
application. Thus, knowledge management processes are based on five major
processes that collectively enable effective management of organisation
knowledge using appropriate tools and techniques. This topic will discuss how
knowledge is discovered through socialisation and from databases. Then, the
topic elaborates on how knowledge is captured for future use, ways of
representing knowledge using suitable representation techniques and means of
sharing knowledge among individuals and groups.

6.1 KNOWLEDGE DISCOVERY


In this section, the discussion focuses on significant ways knowledge is
discovered. The first is through synthesis of new knowledge through
socialisation with other knowledgeable persons and the second is through
discovery, which is by finding interesting patterns in observations, typically
embodied in explicit data.

Knowledge discovery systems support the development of new tacit or explicit


knowledge from data and information or from the synthesis of prior knowledge.
Knowledge discovery systems rely on mechanisms and technologies that can
support the combination and the socialisation processes. Here, the discussion
does not distinguish between knowledge creation (see Section 3.9 for more
details) and knowledge discovery, but considers both to describe the same thing:
the innovation and advancement of knowledge. However, it does distinguish
knowledge creation from knowledge capture; the latter activity presumes that

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104 TOPIC 6 KNOWLEDGE MANAGEMENT PROCESSES

knowledge has already been created and may exist tacitly in the minds of
experts. Knowledge creation assumes knowledge did not exist before the activity
that catalysed the innovation.

Knowledge discovery mechanisms help facilitate socialisation processes. In the


case of tacit knowledge, socialisation facilitates the synthesis of tacit knowledge
across individuals and the integration of multiple streams for creating new
knowledge, usually through joint activities instead of written or verbal
instructions. For example, one mechanism for socialisation is research
colloquiums and conferences, which enable researchers to develop new insights
and knowledge through sharing their own findings.

Organisational brainstorming sessions also lead to the discovery of new


knowledge that did not exist individually before the group activity; knowledge is
created or discovered by the team. The topic of socialisation as a mechanism for
knowledge discovery will be discussed in Section 6.2.

On the other hand, technologies can also support knowledge discovery systems
by facilitating combination processes. New explicit knowledge is discovered
through combination, wherein multiple bodies of explicit knowledge (data or
information) are synthesised to create new, more complex sets of explicit
knowledge. Furthermore, existing explicit knowledge may be recontextualised to
produce new explicit knowledge, for example, during the creation of a new
business proposal to a client that is based on existing prior client proposals that
are successfully implemented.

Knowledge discovery mechanisms and technologies can facilitate socialisation


and combination within or across organisations. These knowledge creation
systems can be supported by the use of data mining (DM) technologies. These
may be used to uncover new relationships among explicit data, and subsequently
serve to develop models that can be used to predict or categorise information –
highly valuable assets in business intelligence.

ACTIVITY 6.1
1. Discuss how knowledge discovery mechanisms help facilitate the
socialisation process in organisations.
2. Explain the importance of knowledge discovery activities in
knowledge management.
3. Briefly distinguish between the activities of knowledge capture
and knowledge creation.

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6.2 USING SOCIALISATION TO CREATE NEW


KNOWLEDGE
Socialisation, as defined in Section 3.9, is the process of synthesising tacit
knowledge across individuals through joint activities instead of written or verbal
instruction. Socialisation enables the discovery of tacit knowledge through joint
activities between masters and apprentices, or among researchers at research
conferences. The objective is to encourage individuals to meet outside their
normal work environment, perhaps at a resort, where they are able to discuss
their problems in an informal and relaxed environment.

These meetings enable creativity to flourish and provide ways for sharing
knowledge and building trust among group members. Socialisation as a means of
knowledge discovery is a common practice in many organisations, established
either by accident or on purpose. Simple discussions over lunch or tea break
among employees discussing their daily problems can often lead to knowledge
discovery.

6.3 USING DATA MINING TO CREATE NEW


EXPLICIT KNOWLEDGE
Technologies for knowledge discovery can be very powerful tools for
organisations wanting to have competitive advantage over their competitors.

Knowledge discovery in database (KDD) is the process used to search for and
extract meaningful information from volumes of documents and data. These
include tasks like knowledge extraction, data archaeology, data exploration, data
pattern processing, data dredging and information harvesting. Knowledge
discovery in database involves finding, establishing and interpreting patterns
from data, involving the application of different algorithms to interpret the
patterns generated by these algorithms. All of these activities are performed
automatically and allow quick discovery, even by non-programmers. The
common scenario in organisations is that data are often „buried‰ deep within
very large corporate databases, data warehouses, text documents or knowledge
repositories, all of which may contain data, information and knowledge that
were gathered over many years.

Knowledge discovery in database is also widely known as data mining (DM).


Although the majority of the practitioners use KDD and DM interchangeably, for
some, KDD is defined as involving all the phases of knowledge discovery
including the application of DM techniques.

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Data mining derives its name from the similarities for valuable business
information in a large database, and mining for valuable information and
knowledge. Data mining searches for previously unknown information or
relationships in large databases, and is one of the useful techniques for eliciting
knowledge from databases, documents, e-mails and so on. Both KDD and DM
process by either sifting through very large amounts of material or intelligently
probing it to find exactly where the value resides.

6.3.1 Data Mining


Data mining is a term used to describe knowledge discovery in databases. It is a
process that uses statistical, mathematical, artificial intelligence and machine-
learning techniques to extract and identify useful information and subsequent
knowledge from large databases, including data warehouses. This information
includes patterns usually extracted from large sets of data. These patterns can be
rules, affinities, correlations, trends or prediction models. Data mining offers
organisations a sophisticated decision-enhancing environment to exploit new
opportunities by transforming data into a strategic weapon.

The following are the major characteristics and objectives of data mining:
(a) Data are often buried deep within very large databases which sometimes
contain data from several years. In many cases, the data are cleaned and
consolidated in a data warehouse.
(b) Sophisticated new tools, including advanced visualisation tools, help to
remove the information buried in corporate files or archival public records.
Finding it involves massaging and synchronising these data to get the right
results. The latest data miners are also exploring the usefulness of soft data
(unstructured text stored in such places as Lotus Notes databases, text files
on the Internet, or an enterprise wide intranet).
(c) The miner is often an end-user, empowered by data drills and other power
query tools to ask ad-hoc questions and obtain answers quickly with little
or no programming skills.
(d) „Striking it rich‰ often involves finding an unexpected result and requires
end-users to think creatively.
(e) Data mining tools are readily combined with spreadsheets and other
software development tools. Thus, the mined data can be analysed and
processed quickly and easily.

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(f) Due to the large amounts of data and massive search efforts, it is sometimes
necessary to use parallel processing or supercomputers to execute data
mining.
(g) The data mining environment is usually a client/server architecture or a
web-based architecture.

6.3.2 How Data Mining Works


Data mining discovers intelligence from data warehouses that queries and
reports alone cannot discover. Data mining tools discover patterns and
relationships in data. For example, convenience stores discovered that cosmetics
and baby diapers were very often bought at the same time and moved those
products nearer to each other. Three methods are used to identify patterns in
data:
(a) Simple models (Structured Query Language (SQL)-based query, On Line
Analytical Processing (OLAP), human judgment);
(b) Intermediate models (regression, decision trees, clustering); and
(c) Complex models (neural networks, other rule induction).

These patterns and rules can be used to guide decision making and forecast the
effects of decisions. Data mining can speed up analysis by focusing attention on
the most important variables. The dramatic drop in the cost/performance ratio of
computer systems has enabled many organisations to start applying the complex
algorithms of data mining techniques.

6.3.3 Data Mining Applications


Data mining systems have made significant contributions, for example, in breast
cancer diagnosis, electronic commerce (e-commerce) applications, financial
planning and others. It helps provide hard data ready for analysis, and provide
organisations with an excellent opportunity to make profits by using these
techniques. The availability of computing power and integrated DM software
tools that are easier to use have increased the popularity of DM applications
among organisations.

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There are many success stories of using DM techniques to create new knowledge.
The following are some examples of the application of DM to KM for business:

(a) Marketing
Predictive DM techniques, such as artificial neural networks, are used for
target marketing including market segmentation. This allows marketing
departments to segment customers according to basic demographic
characteristics, such as gender, age, income and purchasing patterns. These
techniques have also been used to improve direct marketing campaigns,
through an understanding of which customers are likely to respond to new
products based on their previous consumer behaviour.

(b) Retail
DM methods have been used for sales forecasting by taking into
consideration multiple market variables, such as customer profiling based
on purchasing habits. Techniques like market basket analysis also help
uncover which products are likely to be purchased together.

(c) Insurance
DM techniques have been used for segmenting customer groups to
determine premium pricing and to predict claim frequencies. Clustering
techniques have also been applied to detect claim fraud and to aid in
customer retention.

ACTIVITY 6.2

1. Discuss what is meant by knowledge discovery in database.


2. Describe how data mining can support knowledge discovery in
database.
3. Briefly explain how data mining tools identify patterns in data.

SELF-CHECK 6.1

1. What is data mining in the context of creating new explicit


knowledge?
2. Why are data mining tools popular in discovering new
knowledge?
3. Identify three areas where data mining techniques can be applied.

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6.4 KNOWLEDGE CAPTURE


Knowledge capture can be defined as the processes involved in the retrieval of
explicit or tacit knowledge that resides within people, artefacts or organisational
entities. Also, the knowledge captured might stay outside the organisational
boundaries as it is in the consultants, competitors, customers and previous
employers of the organisationÊs new employees. The knowledge capture process
is strongly related to the two SECI knowledge conversion processes of
externalisation and socialisation (discussed in Section 3.9) that help capture tacit
knowledge and explicit knowledge. In a broader view, knowledge capture may
also include capturing knowledge from other sources such as books, technical
manuscripts, articles and drawings. In fact, these processes lead to the case-based
reasoning (discussed in Section 7.3.2) used in the building of many KM systems.

Knowledge can exist within people (individuals or groups), artefacts (practices,


technologies or repositories), and organisational entities (organisational units,
organisations or organisational networks) as discussed in Section 3.10.
Furthermore, knowledge can be classified as either tacit or explicit. Knowledge
can reside within a personÊs mind, without that person having the ability to
recognise it and share it with others. Knowledge may also reside in an explicit
form in a manual, but few people may be aware about it. For knowledge
management to be effective, it is important for the organisation to obtain the tacit
knowledge from the individualÊs minds and the explicit knowledge from
manuals, so that the knowledge can be shared with others.

6.4.1 Capturing Knowledge


Knowledge capture is a demanding process in which knowledge developers
collaborate with experts to convert their expertise into a coded program,
essentially the processes of codifying knowledge. Three important steps are
involved:

Step 1 = Use the appropriate tool to elicit information from experts


Step 2 = Interpret the information gathered and infer the expertsÊ underlying
knowledge and reasoning process
Step 3 = Use the interpretation to build the rules that represent the expertsÊ
thought processes or solutions in a computer system

The capture of knowledge can be performed in various ways; however, there is


no single best technique. The process goes through several refinement cycles.

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The knowledge management systemÊs task is not only limited to displaying the
knowledge but also involves codifying it at different levels of reasoning or
explanation. Knowledge is often captured when the knowledge developer
interviews the experts, who answer the following questions:
(a) What do you do as a first step?
(b) What information do you consider next?
(c) What constraints do you look for?

The answers to these types of questions will lead the experts through several
scenarios or case situations. Then, the knowledge developer returns to specific
points and questions the experts further until all views of the problems are
thoroughly explored.

In capturing the knowledge used in developing knowledge management


systems, knowledge developers usually use flowcharts, flow diagrams, decision
trees, decision tables, frames and other graphic representations. You can
appreciate the logical flow of a decision tree and how easy it is to codify tacit
knowledge based on graphical flow.

6.4.2 What Knowledge to Capture


Understanding how experts know what they know is the bottom line in the
knowledge capture process. Expert knowledge is mainly cognitively complex
and tacitly pragmatic. This knowledge cannot be easily captured through the
traditional interview process. In many cases in which knowledge capture failed,
the knowledge developer did not quite understand the pragmatic nature of the
expertise.

Just as the knowledge developer may not fully understand the experts, the
experts may be equally unclear about the role of knowledge developer. Experts
sometimes perceive knowledge developers as domain novices, who require
patience and who must undergo the apprenticeship process which takes them
from the novice to near-expert level during the building of the knowledge
management system. This perception requires the knowledge developer to
commit serious efforts towards preparation and familiarity in the domain that
they are working.

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The following suggestions can be adopted to improve the knowledge


capture process:
(a) Knowledge developers must focus on how experts approach a problem.
They must look beyond the facts or the heuristics used by the experts in
solving the problem.
(b) Understanding that true expertise takes the form of chunked knowledge,
knowledge developers should re-evaluate how well they understand the
problem domain and how accurately they are modelling it. Can they
identify patterns and relationships leading to a solution? That is, can
knowledge developers grasp the complexity of the domain? Conceptual
tools provide the developer with a concise, easy way to capture heuristic
knowledge.
(c) The quality of human emulation is best captured through episodic
knowledge or knowledge based on previous experience. Therefore, a
knowledge developer should elicit the expertsÊ knowledge through concrete
case situations or scenarios that they have previously worked upon.

SELF-CHECK 6.2
1. What is meant by knowledge capture?
2. What are the three steps involved in capturing knowledge from
experts?
3. Why should knowledge developers focus on how experts
approach a problem during the knowledge capture process?
4. What visual tools can be used by knowledge developers in
capturing knowledge?

6.5 CAPTURING KNOWLEDGE THROUGH


KNOWLEDGE ELICITATION
This section discusses the manual process of knowledge elicitation from domain
experts. It focuses on the elicitation of tacit knowledge from human sources and
not from documents. This involves eliciting the knowledge from a
knowledgeable human and representing it in some machine-understandable
form for storage and application. Therefore, in this section, the term „knowledge
capture‰ is defined as the combination of knowledge elicitation and
representation in a machine-readable form.

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Knowledge capture is an iterative process consisting of knowledge elicitation,


representation and confirmation. Therefore, in this section, the concentration is
on how this step is performed. The section discusses how a person interfaces
with one domain expert to elicit knowledge from that expert. The discussion on
different types of techniques used during these knowledge elicitation meetings
such as interviews are explored.

The common technique for knowledge elicitation is face-to-face discussions


between subject matter experts who possess the domain knowledge, and the
knowledge engineers who ask questions, observe the expert solving problems,
and determine what knowledge is used. These interviews occur repeatedly over
a few weeks or months, making this a rigorous and tedious process. Thus, care
should be taken to perform it efficiently.

The next section discusses the interview process in detail. Interviewing is first
described as a sequence of different types of interview sessions, each having
separate and distinct objectives. Then, the discussions here focus on other issues
in the process, such as different ways for eliciting knowledge from the experts.

6.5.1 Basic Unstructured One-To-One Interview


Process
Interviews can be conducted using various formats. The basic interview is
conducted between a single knowledge engineer and a single expert, and
through this interaction, the engineer is able to elicit the knowledge. All other
interview contexts are viewed as variations of this theme. This one-on-one
interview process consists of a series of interview sessions, each possibly of
different type and slightly different objectives as described below. There are
other types of interviews such as one-to-many, many-to-one and many-to-many.
However, these types are not discussed in this module as the essence of the
interviewing technique is almost the same in all types.

(a) Kick-Off Interview


The main objective of the kick-off interview is to establish good rapport
with the expert. The engineer should attempt to make a good first
impression, which can be achieved by demonstrating to the expert that an
honest attempt has been made by the engineer to gain familiarisation with
the domain before the meeting. However, extensive domain knowledge is
not required because the expertÊs guidance should be used in learning
about the domain, and the facts or relationships about the domain.

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(b) General Knowledge-Gathering Sessions


The knowledge elicitation process starts after the kick-off interview. This
can be classified into two categories by the type of knowledge gathered:
(i) General knowledge-gathering interview sessions; and
(ii) Specific problem-solving knowledge-gathering interview sessions.

The first type of session is adopted by the engineer to learn the general
principles of the domain from the expert. The knowledge gathered here,
although important and educational, will not be explicitly expressed
because it is mainly used to gain basic understanding of the problem
domain. The engineer uses this knowledge to comprehend the more
specific knowledge that will be elicited in later sessions.

Then, the engineer uses the second type of session to understand and
gather the specific knowledge used by the expert. This is the type of
knowledge that the engineer must capture and represent. The following
subsections will describe these in more detail as well as some useful
techniques used in extracting knowledge.

The first few sessions after the kick-off interview are general knowledge-
gathering sessions. The main objectives for the engineer here are to better
understand the:
(i) Subject matter; and
(ii) ExpertsÊ opinions and viewpoints on the domain.

Prior to these sessions, the engineer must read about the domain based on
the literature suggested by the expert as well as other documentation that
are related to the domain and problem. At this point, the engineer knows
the vocabulary and has basic understanding of the domain. This helps the
engineer to converse with the expert and understand his answers.

It also facilitates the major task of these sessions, which is knowledge


gathering through open-ended questions. Open-ended questions require
discussion and cannot be answered simply with a yes, a no, a simple term,
or a number. These questions are effective because they give the expert the
chance to communicate openly about the domain, which can provide a
concentrated learning experience for the engineer. The engineer benefits
from these dialogues by gaining insight into the expertÊs tacit knowledge
base, which helps verify that the engineer understands the domain. Open-
ended interviews should continue for as many sessions as needed to obtain
good understanding of the problem domain, and the expertÊs opinions and
viewpoints on the domain.

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(c) Specific Problem-Solving, Knowledge-Gathering Sessions


Once the KE understands the basics of the domain, the process should
continue by selecting a subarea that can serve as the first chunk of
knowledge to be extracted from the expert and represent it explicitly.
Specific subareas can be difficult to identify because a definition of what is
appropriate for further examination can depend greatly on issues such as
development schedule and customer preferences. The other type of
knowledge gathering sessions involve close-ended questions that result in
„yes or no‰ or numeric answers. The objective of these interviews is to
explore how the expert solves specific problems or answers questions in the
domain.

6.5.2 Other Knowledge Elicitation Techniques


The unstructured question-and-answer interview discussed earlier is the most
common means of eliciting knowledge from an expert but it is not always the
most efficient. There are other knowledge elicitation techniques that are more
effective under certain circumstances. In some domains, considerable expertise is
documented in instruction manuals or books.

Furthermore, some experts often find it difficult to articulate their expertise as


they usually perform the task automatically and subconsciously, without really
knowing how they do it. In these situations, alternative techniques should be
adopted and these can be narrowed into two different methods:
(a) Observation elicitation involves the engineer to observing the expert at
work and trying to understand and duplicate the expertÊs problem-solving
methods.
(b) Role reversal involves the engineer attempting to become a pseudo expert
and implementing this pseudo knowledge about the problem domain.

Both these techniques are applied in an iterative way and are discussed here.

(a) Quiet On-Site Observation


This type of observation does not allow the engineer to query the experts
while they are solving a real problem. Since the experts are allowed to work
at their most effective as well as realistic ways, their thoughts are usually
interrupted by questions. Definitely there is something to be learned from
this behaviour.

However, the disadvantage of this technique is that the lack of interaction


leaves the engineer wondering about the solution approaches taken by the
expert. Therefore, the technique of quiet observation should only be opted

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for when there is a need to just get a feel of the problem-solving process or to
verify some approaches used. Another setback of this technique occurs if the
experts are asked to think about what they are doing. This might catch the
experts by surprise about their approach, causing them to modify it or to
create a verbalisation that is much more complex than the actual technique.

(b) On-Site Observation with Discussion


On-site observation is the process of observation described above with the
engineer engaging in discussion with the expert when required. Although
this interaction does not allow the experts to be themselves, the inclusion of
questions does allow the engineer to better probe the process observed. The
danger is that the expert may become distracted by the questions and not
follow the normal procedure in solving the problem. If the observed task
does not significantly challenge the expertsÊ problem-solving abilities, the
expert can spend significant time and effort in providing a detailed
explanation of the approach. If the problem is significantly more difficult,
then the expert may struggle to reach a solution with symptoms such as
uneasiness, hesitation in making a decision, or simply refusing to
cooperate. As such, this approach may not work with an uncooperative
expert.

(c) Role Reversal Techniques


Role reversal is well suited for situations where the engineer has prior
knowledge and understanding of the problem-solving process or domain
and wishes to verify its correctness. These techniques are not used for
eliciting knowledge but for verifying knowledge previously obtained from
experts using the interview and observation techniques.

Engineers using role reversal should attempt to become pseudo experts in


the domain. They study the techniques and approaches adopted by the
expert and build a set of protocols on how to approach the problems. Then
with the cooperation of the expert, the engineers test their abilities and
understanding using the concept of role-playing.

Role-playing adopts the idea of role reversal, where the engineer acts as
the expert. The pseudo expert attempts to solve the problem in front of the
expert who then queries the pseudo-expert about what he is doing and
why. This is the process of observation with questions where the roles have
been reversed. With the cooperation of the right expert and appropriate
topic of discussion, this process can clarify and modify approaches that
were initially thought to be appropriate and can provide significant new
knowledge previously uncovered by the engineer.

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ACTIVITY 6.3

1. Discuss the common technique used for knowledge elicitation.


2. Justify the importance of having a kick-off interview prior to
in-depth interview sessions.
3. Compare the difference between general and specific knowledge
gathering sessions.
4. Explain why observation techniques are useful in eliciting
knowledge.
5. Describe how the role reverse technique is used by knowledge
engineers.

6.6 CAPTURING KNOWLEDGE THROUGH


STORIES
The use of metaphors and stories as a technique for capturing and transferring
tacit knowledge is gaining popularity among organisations. Stories are important
in organisations supporting collaboration activities. Organisation stories are
comprehensive accounts of previous management actions, employee interactions
or other intra- or extra-organisational events or cases that are communicated
informally within groups in the organisation, which typically have plots, major
characters, outcomes and an implied moral. Stories start within the organisation
and highlight the organisational norms, values and culture that are unique to its
existence. Stories are found to be effective to capture and communicate
organisational managerial systems (how things are done), norms and values as
these relate to personal experience and have rich contextual details encoded in
them.

Storytelling plays an important role in organisations for sharing of experiences,


success and failures. Storytelling helps employees to actively think about what
change can do and the opportunities for the future of their organisation. Listeners
start to appreciate what it would be like if things were performed differently,
re-creating the idea of change as an exciting and living opportunity for growth.
Stories also help bridge the knowing-doing gap by exploiting the interactive
nature of communication, by encouraging the listener to imagine the story and to
feel it as a participant. These enable listeners to perceive and act on the story as
part of their own individual identity.

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Stories are also useful in capturing tacit knowledge as it is easier for people to
narrate their experience using analogies that are simple and easy for everyone to
comprehend. Furthermore, a simple story can communicate several complex
multidimensional ideas, by actively involving listeners in the creation of the
idea in the context of their own organisation. Through storytelling activities,
communities can be established and nurtured. In many organisations, the
formation of communities of practice enables employees with similar interests to
come together voluntarily and share their ideas and learn from each other. These
communities of practice are known as thematic groups (World Bank), learning
communities or learning networks (Hewlett-Packard), best practice teams
(Chevron) and family groups (Xerox).

6.7 KNOWLEDGE REPRESENTATION


Knowledge representation is one of the fundamental topics in the area of
artificial intelligence and knowledge engineering. It investigates knowledge
representation techniques, tools and languages. These representation techniques
mainly concentrate on representing explicit knowledge in a knowledge-based
system. Knowledge about the domain and the implementation of the
independent reasoning-process of the knowledge-based system, however, is
usually addressed through the use of ontologies and problem-solving methods,
which are discussed in Section 6.7.6.

There are five prominent representation techniques which are widely used in
developing a knowledge-based system and they are attribute-value pairs, object-
attribute-value triplets, semantic networks, frames and logic. The following
subsections provide a brief overview of these techniques.

6.7.1 Attribute-Value Pairs


Attribute-Value (A-V) pairs are the basic and most common method of
representing knowledge in a KBS. The A-V pairs method of representation is
typically used in representing simple rules in a system using the if-then rule
format and is explained further using the sample rules in Figure 6.1 below.

Rule 1 If income > $30,000 then credit type = gold card


Rule 2 If income $30,000 and credit status = OK then credit type = normal
Rule 3 If income > $10,000 then credit status = OK

Figure 6.1: Examples of rules

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6.7.2 Object-Attribute-Value Pairs


Object-Attribute-Value (O-A-V) triplets are used to represent more than a single
object in a KBS. O-A-V triplets work the same way as A-V pairs but they
overcome the limitation of A-V pairs, which assume that all attributes belong to
one object. The triplets can be represented by diagrams as they can be considered
a type of semantic network and are used in the knowledge representation of
physical objects. This type of representation is widely used as production rules,
which are a popular way of representing business rules. An example of this is a
person who is the object that has income as the attribute and the amount he
receives as the value.

6.7.3 Semantic Networks


Semantic networks (or semantic nets) were developed for studying linguistics by
representing the semantics of English words; this strategy has been adopted for
representing knowledge. Knowledge is represented as a graph in a semantic
network, with nodes in the graph representing concepts and relations between
concepts represented using links. Relations between concepts are subclass
relations between classes, and instance relations between particular object
instances and their parent class. Other relations such as has-part, colour and so
on are allowed to represent properties of objects. Figure 6.2 shows an example of
semantic network representation.

Figure 6.2: A simple semantic network

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Semantic networks are used to represent knowledge about objects and the
relations between them in a simple manner. The graphical notations can be used
to see how the knowledge is organised. The type of inferences supported by the
network is very restricted as it only supports inheritance of properties. It is not
suitable to represent very complex knowledge but can be used for certain types
of problems.

6.7.4 Frames
Frames are used to represent knowledge because experts represent their
knowledge as various concepts (frames) and these are interconnected. Frames are
considered as a variant of semantic networks and are widely used to represent
knowledge in a system. Frames are used to capture explicitly organised data
structures and the implicit connections of information in a problem domain.
Object-oriented programming languages have adopted some of the terminology
and ideas behind frame systems because of the class and inheritance concepts.
An example of a frame is shown in Figure 6.3.

Mammal:
Subclass: Animal
Has-part: Head
Elephant:
Subclass: Mammal
Colour: Grey
Size: Large

Figure 6.3: An examples of a frame

Semantic network representations can be directly translated into frame-based


representations. Objects in the frame system are nodes in the semantic network,
with links becoming slots, and the node on the other end of the link becoming the
slot value.

Frame systems support the default and multiple inheritance concepts. Subclass
objects will inherit all the properties of their parent class. Frame systems also
allow for properties (slots) that are just typical of a class, with exceptions
allowed, but must be true for all instances. The value of the property that is only
typical of a class is called a default value and can be changed by giving a
different value for an instance or subclass. Slots contain information on rules,

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pointers to other frames, default values and procedures. Both slot values and
slots may be frames. Various attributes of a slot can be specified by allowing slots
to be frames.

Frame-based systems also allow procedures to be included in slots, and these


procedures are executed whenever there is a need for slot value. Frames can be
viewed as problem frames, a type of design pattern concept introduced to study
and analyse problems for systems development activities.

6.7.5 Logic
Logic is another knowledge representation technique that is widely used in
developing expert systems. A logic is a formal system which may be described in
terms of its syntax (what allowable expressions are), its semantics (what they
mean) and its proof theory (how we can draw conclusions given some statements
in the logic).

The basic type of logic is propositional logic, where a statement as a proposition


can be either true or false. Compounded statements are formed by linking
together statements using connectives such as AND, OR or NOT. The value of a
compound statement and the semantics of these logical connectives will be given
in a truth table as true or false. For example, if X is true and Y is false, then X
AND Y is false. On the other hand, X OR Y is true. The most important
knowledge representation language is predicate calculus (also known as first-
order predicate logic). Predicates are statements or assertions about objects.

Sentences in predicate calculus are formed from atomic sentences and express
basic facts using a predicate name and some arguments. Arguments in an atomic
sentence may be in the following terms: constant symbols, variable symbols and
function expressions. One possible way of defining the semantics of predicate
logic is in terms of the truth-values of the sentences. Logic representation is
widely used in logic programming languages such as Prolog for developing
knowledge intensive applications. However, business applications and users
demand simpler knowledge representation that is easier to understand
compared to logic, which requires a strong mathematical background.

6.7.6 Domain Knowledge Representation


Knowledge about the domain is usually addressed through the use of ontologies,
while the independent reasoning process is specified with problem-solving
methods (PSM). Both ontologies and PSM provide components that are reusable
across domains and tasks enabling KBS to be designed, built and deployed quickly.

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Ontologies are formal declarative representations of the domain knowledge, that


is, they are sets of objects with describable relationships. Thus, an ontology used
for knowledge modelling defines content-specific knowledge representation
elements such as domain-dependent classes, relations and functions for the KBS.
Ontologies are important when building very large KBS in complex domains,
which typically consist of thousands of rules. Furthermore, the development of
ontology is not easy and requires a detailed analysis of the domain. Nevertheless,
ontology can also be used for smaller KBS in order to understand the problem
domain if the domain is well-defined.

Problem-solving methods describe the reasoning process (generic inference


patterns) at an abstract level which is independent of the representation
formalism (e.g. rules, frames). Problem-solving methods have influenced leading
knowledge-engineering frameworks such as Task Structures, Role-Limiting
Methods, CommonKADS, Protégé, MIKE, Components of Expertise and
KAMET.

Most of these frameworks suggest that a PSM decomposes the whole reasoning
task into elementary inferences that are easy to understand, defines the types of
knowledge that will be used by the inference steps to be completed, and specifies
the control mechanisms and flow of knowledge among the inferences. Therefore,
PSMs can be considered as design patterns in KE for developing KBS.

SELF-CHECK 6.3

1. What does the term „knowledge representation‰ refer to?


2. What are the five main techniques used in knowledge
representation?
3. Which knowledge representation technique has similarities with
object-oriented concepts?
4. How can an organisationÊs business rules or production rule be
represented?
5. Compare the differences between ontology and problem-solving
method in representing domain knowledge.

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6.8 KNOWLEDGE SHARING


Knowledge sharing is the process by which explicit and tacit knowledge is
communicated to others and there are three important ways of looking at this
process. First, knowledge sharing is related to effective transfer, so that the
person who receives the knowledge can understand it well and carry out actions
based on this knowledge. Second, what is shared is knowledge and not
recommendations based on knowledge. Third, knowledge sharing happens
across groups, departments or organisations, as well as between individuals.

The terms „transfer‰ and „share‰ are interrelated. Knowledge transfer is a


mechanistic term, which means providing knowledge for someone else. The term
„share‰ refers to exchange of knowledge between individuals, between or within
teams, or between individuals and knowledge bases, repositories and so forth.
Knowledge sharing recognises the personal nature of peopleÊs knowledge gained
from experience. It should be noted that technology alone is not a sure
prerequisite for knowledge transfer or knowledge sharing. For knowledge
transfer to work, it takes a change in culture, politics and attitude to make things
happen.

6.8.1 Knowledge Sharing System


Knowledge sharing system is a system that enables members of an organisation
to acquire tacit and explicit knowledge from each other. In a knowledge sharing
system, knowledge owners are willing to share their knowledge with a
controllable and trusted group, decide when to share and the conditions for
sharing and expect a fair exchange, or reward, for sharing their knowledge. On
the other hand, knowledge seekers may not be aware of all the possibilities for
sharing; thus the knowledge repository typically helps them through searching
and ranking, as well as deciding on the conditions for knowledge acquisition

A knowledge sharing system is said to define a learning organisation, supporting


the sharing and reuse of individual and organisational knowledge. ICT tools,
such as document management systems, groupware, e-mail, database and
workflow management system used for singular unrelated purposes have been
integrated into knowledge sharing systems. Details of these tools are discussed in
Topic 7.

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The document management system is an electronic storage repository that can be


centralised or distributed. It builds on the repository by adding support to the
classification and organisation of information and streamlining the actions of
storage and retrieval of documents over a platform-independent system. Portal
technologies are adopted to provide a common entry into multiple distributed
knowledge repositories of the organisation.

Most knowledge sharing systems are integrated with a collaborative


environment. Collaborative environments or groupware systems are software
that enables the communication and collaboration of two or more individuals.
Collaborative technologies include e-mail, electronic meeting systems such as
discussion forums and workflow, and videoconferencing. Collaborative
environments support the work of teams, which may be at different locations at
the same time. Groupware tools enable the informal exchange of ideas and
increase team communication, which is the process of knowledge sharing. A
workflow tool provides the means for capturing the steps that enable the
completion of a project or a business process within the specified time frame,
which can be performed collaboratively. Therefore, knowledge sharing systems
integrate the capabilities of document management and collaborative systems
along with knowledge management mechanisms.

6.8.2 Types of Knowledge Sharing Systems


Knowledge sharing systems can be classified according to their functions and the
specific types of these systems are incident report database, alert systems, best
practices databases and lessons-learned (LL) systems.

Incident report database is used to share knowledge related to incidents or


malfunctions, for example, of field equipment (such as down time of monitoring
equipment) or software (such as bug reports). The incident reports mainly detail
out the incident together with explanations about the incident, although they
may not provide any recommendations. Incident reports are typically used in the
context of safety and accident investigations.

The original use of alert system was limited to disseminating information about a
negative experience that has occurred or is expected to occur. However, recent
applications also include increasing exposure to positive experiences. Alert
systems could also be used to report problems experienced with a technology,
such as an alert system that issues recalls for consumer products. These systems
could operate in a single organisation or a set of related organisations that share
the same technology and suppliers.

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A best practices database describes successful efforts undertaken by the


organisation in performing some processes that could be applicable to other
organisational processes. A best practices system is different from lessons learned
systems as they capture and share only successful events, which may not be
derived from experiences. Some of these best practices are expected to represent
business practices that can be adopted by other organisations in the same
domain.

The aim of lessons learned (LL) systems is to capture and share lessons that are
beneficial to employees who will face situations that are almost the same as a
previous experience in a similar setting. LL systems could be pure repositories of
lessons or sometimes intermixed with other sources of information such as
reports, and usually focus on multi tasks.

6.8.3 Communities of Practice


The knowledge sharing systems discussed so far only focus on assisting
organisation in sharing explicit knowledge. Sharing tacit knowledge requires
interactions between individuals and communities of practice (CoP) and it is the
knowledge management system that enables the sharing of tacit knowledge. CoP
is also commonly known as knowledge network, which refers to an organic and
self-organised group of individuals who are dispersed geographically or
organisationally but communicate using appropriate means regularly to discuss
issues of mutual interest.

Several studies have proved that any technological support for knowledge
exchange and share requires participants to believe they know and can trust one
another. Communities are groups of people who get together to share and learn
from one another and who are held together by a common interest in a body of
knowledge. Communities get together through either direct face-to-face contact
or virtual meeting using technology, and are driven by the desire and need to
share and exchange problems, experiences, insights, templates, tools and best
practices.

There are systems that are used to share tacit knowledge, which are specifically
developed to support CoPs. People come together in CoPs because they are
interested in the topic and can receive direct value from participating in the
community, because they are emotionally connected to the community, or
because they want to acquire new tools and techniques. Communities grow out
of their membersÊ natural network; and follow five stages of development:
planning, start-up, growth, sustenance and closure. Although CoPs are not a new
trend, the Internet has enabled the proliferation of virtual communities,
facilitated through a range of collaborative technologies described earlier.

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While knowledge repositories support primarily codified and explicitly captured


knowledge, virtual CoPs are supported through technology that enables
interaction and conversations among its members. Interaction technology can
support structured communication, such as in discussion videoconferencing.

CoPs have been observed to impact organisational performance in four


important areas:

(a) Decreasing new employeeÊs learning curves. CoPs can help new employees
identify subject matter experts in the organisation who can guide them to
proper resources and thus foster relationship with more senior employees.
CoPs can help develop a mentor-protege relationship that can help
employees to develop their careers and to understand the larger
organisational context of their individual tasks.

(b) Enabling the organisation to respond faster to customer needs and


inquiries. CoPs can help identify experts who can address customer issues.
Furthermore, because many communities maintain electronic document
repositories, relevant codified knowledge can often be reused.

(c) Reducing rework and preventing to reinvent the wheel. CoPs are able to
locate, access and apply existing knowledge in new situations. Repositories
serve as common virtual workspace to store, organise and download
presentations, tools and other valuable materials. Meta-data are used to
identify authors and subject matter experts. Most repositories include
human moderation to ensure that the messages are appropriate. CoPs help
establish trust within the organisation by helping individuals build
reputations both as experts and for their willingness to help others.

(d) Spawning new ideas for products and services. CoPs serve as a forum in
which employees are able to share perspectives about a topic. Discussing
diverse views within the community can often spark innovation.
Furthermore, CoPs provide a safe environment where people feel
comfortable about sharing their experiences.

Therefore, CoPs are considered as an effective mechanism for tacit knowledge


sharing, which can provide significant value to organisations and individuals.
The role of management is to carefully craft interventions that are likely to
support the formation and development of CoPs.

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126 TOPIC 6 KNOWLEDGE MANAGEMENT PROCESSES

ACTIVITY 6.4

1. Discuss the type of knowledge that can be shared among


individuals.
2. Compare the differences between knowledge transfer and
knowledge sharing.
3. Argue why document management systems and groupware
systems are considered as knowledge sharing systems.
4. List and explain three types of knowledge sharing systems.
5. What type of knowledge can be shared in the communities of
practice environment?

6.9 KNOWLEDGE APPLICATION


Organisations are considered as making direct use of knowledge when they use
it in the decision-making process and performing tasks.

Here, the process of knowledge application is subject to the availability of


knowledge, and it depends on the processes of knowledge discovery, capture,
representation and sharing. Therefore, the quality of decision making is highly
dependent on the knowledge management processes.

In applying knowledge, the individuals or groups making use of it do not


necessarily have to understand it. What is required is that the users somehow use
this knowledge to guide decision making and actions. As such, knowledge
utilisation benefits from two processes that do not involve the actual transfer of
knowledge between the concerned individuals – direction and routines.

(a) Direction
Direction is the process through which individuals having the knowledge
direct the action of another individual without transferring to that person
the knowledge underlying the direction. This preserves the advantages of
specialisation and avoids the difficulties inherent in the transfer of tacit
knowledge. Direction is the process used when a production worker calls
experts to ask them how to solve a particular problem with a machine, and
then proceeds to solve the problem based on the expertsÊ instructions. This

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production worker does so without acquiring the expertsÊ knowledge, so


that if a similar problem reoccurs in the future, he would be unable to
identify it as such and would therefore be unable to solve it without calling
an expert. Note the difference between direction and socialisation, in which
knowledge is actually internalised by the other person.

(b) Routines
Routine involves the utilisation of knowledge embedded in procedures,
rules and norms that guide future behaviour. Routines save on
communications more than directions because they are embedded in
procedures or technologies. However, they take time to develop, relying on
constant repetition. An inventory management system utilises considerable
knowledge about the relationship between demand and supply, but neither
the knowledge nor the directions are communicated through individuals.

ACTIVITY 6.5

1. Discuss the seven different types of knowledge and provide


appropriate examples for each type.

2. Provide a brief description for the following terms:


(a) Implicit knowledge
(b) Procedural knowledge
(c) Declarative knowledge

3. Review why the SECI model for knowledge conversion is useful


in managing tacit knowledge.

4. Argue the need and importance of the socialisation process of the


SECI model sharing tacit knowledge.

5. Critique the SECI model in managing individual tacit knowledge.

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128 TOPIC 6 KNOWLEDGE MANAGEMENT PROCESSES

Knowledge management processes focus on activities involving knowledge


discovery, capturing, sharing, representation and application.

Knowledge is discovered through synthesis of new knowledge via


socialisation and discovery of interesting patterns in observations that are
typically embodied in explicit data.

Knowledge discovery in database and data mining are the technologies that
can be used to discover knowledge from a vast amount of data.

Data mining searches for previously unknown information or relationships in


large databases, and is one of the useful techniques for eliciting knowledge
from databases, documents, e-mail and so on.

Knowledge capture is the process involved during the retrieval of either


explicit or tacit knowledge that resides within people, artefacts or
organisational entities. It is an iterative process consisting of knowledge
elicitation, representation and confirmation.

Knowledge elicitation is the process of eliciting knowledge from a


knowledgeable human and representing it in some machine-understandable
form for storage and application. Knowledge elicitation is performed through
interviews, observations and reverse role play techniques.

Knowledge is also captured through stories as an organisationÊs stories are


comprehensive accounts of the previous management actions, employee
interactions, or other intra- or extra-organisational events or cases that are
communicated informally within groups in the organisation.

Knowledge can be represented through five prominent representation


techniques and these are attribute-value pairs, object-attribute-value triplets,
semantic networks, frames and logic. Domain knowledge, however, is
represented using problem-solving methods and ontology.

Knowledge sharing is the process through which explicit and tacit knowledge
is communicated to others. This can be achieved through systems such as
document management systems, groupware and workflow.

Knowledge sharing systems can be classified as incident report systems, alert


systems, best practices databases and lessons-learned systems.

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Communities of practice (CoP) are a knowledge management system that


enables the sharing of tacit knowledge. CoP is an organic and self-organised
group of individuals who are dispersed geographically or organisationally
but communicate using appropriate means regularly to discuss issues of
mutual interest.

Knowledge application is the process of making direct use of knowledge in


the decision-making process and in performing tasks.

Communities of practice (CoP) Knowledge representation


Data mining (DM) Knowledge sharing
Interview Observation
Knowledge application Ontology
Knowledge capture Problem solving methods
Knowledge discovery Reverse role play
Knowledge discovery in database

Becerra-Fernandez, I., Gonzalez, A., & Sabherwal, R. (2004). Knowledge


management – Challenges, solutions, and technologies. New Jersey:
Prentice Hall.
Choo, C. W. (2000). Working With Knowledge: How Information Professionals
Help Organisations Manage What They Know. Library Management, 21(8),
395–403.
Goguen, J. A. (1997). Towards a social, ethical theory of information, in social
science, technical systems and cooperative work: Beyond the great divide,
Bowker, G. C., Star, S. L., Turner W. and Gasser, L. (Eds), Lawrence Erlbaum
Associates.
Hildreth, P., & Kimble, C. (2002). The Duality of Knowledge, Information
Research, 8(1), paper no. 142 [Available at http://informationr.net/ir/
8-1/paper142.html].

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130 TOPIC 6 KNOWLEDGE MANAGEMENT PROCESSES

Ichmann, C. (2003). Investigation of technologies in the knowledge management


context, School of Computing, Dublin Institute of Technology, Research
Paper (ITSM), DIT, 2003.
Nonaka, I., & Takeuchi, H. (1995). The knowledge creating company: How
Japanese companies create the dynamics of innovation. Cambridge: Oxford
University Press.
Schreiber, G., Akkermans, H., Anjewierden, A., de Hoog, R., Shadbolt, N.,
de Velde, W. V., & Wielinga, B. (1999). Knowledge engineering and
management: The CommonKADS methodology. Cambridge: MIT Press.
Stein, E. W., Pauster, M. C., & May, D. (2003). A knowledge-based system to
improve the quality and efficiency of titanium melting. Expert systems with
applications, 24(2), 239–246.

Copyright © Open University Malaysia (OUM)


Topic Technological
7 Approaches in
Knowledge
Management
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Identify the components of knowledge management systems;
2. Identify the role of artificial intelligence in managing knowledge;
3. Recognise different types of artificial intelligence tools used for
knowledge management;
4. Discuss the implementation of knowledge management systems; and
5. Describe how knowledge engineering processes are used in
developing knowledge-based systems.

INTRODUCTION
Because we do not understand the brain very well we are constantly tempted to
use the latest technology as a model for trying to understand it. In my childhood
we were always assured that the brain was a telephone switchboard. („What else
could it be?‰) I was amused to see that Sherrington, the great British neuroscientist,
thought that the brain worked like a telegraph system. Freud often compared the
brain to hydraulic and electro-magnetic systems. Leibniz compared it to a mill, and
I am told some of the ancient Greeks thought the brain functions like a catapult. At
present, obviously, the metaphor is the digital computer.

John R. Searle, minds, brains and science, p 44

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132 TOPIC 7 TECHNOLOGICAL APPROACHES IN KNOWLEDGE MANAGEMENT

The quotation shows the important role of technology for humans, and how our
perception of technology changes as it evolves over time.

In Topic 6, you have studied in detail the process of knowledge management


such as knowledge creation, discovery, sharing and application. The topic also
gave an overview of the systems that could support these processes.

This topic discusses the role of information communication technologies as a tool


for knowledge management activities, and will explain in detail the components
of knowledge management systems and how artificial intelligence technologies
have influenced knowledge management. The topic also discusses different types
of artificial intelligence tools that are popular for knowledge management,
namely, knowledge-based systems, case-based reasoning, fuzzy logic, neural
networks and intelligent agents. Knowledge management systems implementation
based on different types of products and vendors, consulting firms and
application service providers are described here. The topic also highlights the
integration of knowledge management systems with other information systems
in the organisations. The different processes of knowledge engineering in
developing knowledge-based systems, and details of the systems in terms of
architecture, issues, advantages and development are discussed in detail.

Knowledge management concerns better management of organisational


knowledge using appropriate tools, procedures and techniques from diverse
domains. Though managing knowledge is a human-related task, technology
can complement human knowledge handling and one such example is the
knowledge-based system, which is capable of managing explicit and implicit
knowledge. Having appropriate tools and techniques will ensure that knowledge
is fully utilised within the organisation and employeesÊ knowledge is captured
and retained in a form that can be used even when the employee leaves.

Technology is a catalyst in supporting knowledge management activities, which


in some cases are developed specifically within the domain of Artificial
Intelligence (AI) for managing knowledge. Examples of such systems are
knowledge-based systems (KBS), ontologies, business intelligence solutions and
organisational memories as well as conventional information system software
such as databases and decision support systems. Tsui et al. (2000) in their
editorial comments made in a special issue on artificial intelligence in knowledge
management support this perspective by arguing that „every knowledge
management project should embrace some knowledge engineering (or artificial
intelligence or web-based business rule execution) expertise to (attempt to)

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provide value-added services often needed in knowledge processing.‰ Most


current software systems adopt all or some of these technologies and they
underpin the services and products of the knowledge economy.

However, not all types of knowledge can be managed successfully through the
use of technology as some are better managed through human-oriented
processes with the support of ICT. Tsui (2005) believes that successful
implementation of any KM project involves the blending of technology, people,
process and content. To select the appropriate technology support for KM
requires an understanding of the extent to which knowledge can be structured
and the type of strategy adopted: codification versus personalisation strategy.
The codification strategy relies on knowledge which is stored in databases that
are easily accessible by people who need to access it. The personalisation
strategy, on the other hand, focuses on the tacit dimension of knowledge that is
embedded in people and is shared through person-to-person contact.

ACTIVITY 7.1

1. Discuss why information communication technology is important


for knowledge management initiatives in organisations.
2. Describe how technology can be used in knowledge management
projects.
3. Based on your personal experience in using technology tools,
identify the type of tools that would be useful for knowledge
management.

7.1 COMPONENTS OF KNOWLEDGE


MANAGEMENT SYSTEMS
Knowledge management can be seen as a methodology applied to business
practices rather than a technology or product. Nevertheless, information
communication technology is crucial to the success of knowledge management
system implementation in organisations. Information communication technology
enables KM by providing the enterprise architecture upon which it is developed.
Knowledge management systems are built based on three sets of technologies:
communications, collaboration, and storage and retrieval.

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134 TOPIC 7 TECHNOLOGICAL APPROACHES IN KNOWLEDGE MANAGEMENT

Communication technologies enable users to access the required knowledge, and


to communicate with each other, especially the experts. E-mail, Internet,
corporate intranet and other web-based tools provide communication functions.
Even fax machines and telephones are used for communication especially when
ICT tools are not available or cannot support the communication.

Collaboration technologies provide the ways to perform group work or team


work. Groups can work together on common documents at the same time
(synchronous) or at different time (asynchronous); in the same location or in
different locations. This is important especially for members of a community of
practice working on knowledge contribution or different groups working on a
business proposal at different time zones. Other collaborative computing
capabilities are electronic brainstorming sessions and enhanced group work,
especially for knowledge contribution. Other forms of group work involve
experts working with individuals trying to apply their knowledge, and this
requires collaboration at the higher level. Other types of collaborative computing
systems enable organisations to create virtual spaces so that employees can work
online anywhere and at anytime.

Storage and retrieval technologies are originally meant for using a database
management system to store and manage knowledge. This system worked well
in the early days for storing and managing explicit knowledge, and tacit
knowledge that are converted to explicit knowledge. Nevertheless, capturing,
storing and managing tacit knowledge requires a different set of tools. Electronic
document management systems and specialised storage systems that are part of
collaborative computing systems fill this void. These storage systems are
commonly known as knowledge repositories or organisational memory.
Table 7.1 shows the relationship between these knowledge management systems
and the Web.

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Table 7.1: Knowledge Management Technologies and Web Impact

Knowledge
Web Impacts Impacts on the Web
Management
Communication Consistent, friendly, graphical user Knowledge captured and
interface for client units shared is utilised in
improving
Improved communication tools
communication,
Convenient, fast access to knowledge communication
and knowledgeable individuals management and
communication
Direct access to knowledge on the technologies
servers
Collaboration Improved collaboration tools Knowledge captured and
shared is utilised in
Enables anywhere/anytime
improving collaboration,
collaboration
collaboration
Enables collaboration between management, and
organisation, vendors and customers collaboration technologies
(Group Support Systems)
Enables document sharing
Improved, fast collaboration and links
to knowledge sources
Makes audio and video conferencing
a reality, especially for individuals
not using a Local Area Network
(LAN)
Storage and Consistent, friendly, graphical user Knowledge captured and
Retrieval interface for clients shared is utilised in
improving data storage
Server provides for efficient and
and retrieval systems,
effective storage and retrieval of
database
knowledge
management/knowledge
repository management,
and database and
knowledge repository
technologies

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SELF-CHECK 7.1

1. What is collaboration technology and how does it support group


work?
2. Why are communication tools important in managing knowledge?
3. Describe how the Web has influenced the three sets of knowledge
management technologies.

7.2 THE ROLES OF AI IN KNOWLEDGE


MANAGEMENT
Artificial intelligence (AI) is a branch of computer science that allows computers
to represent and manipulate symbols, thus enabling them to solve problems that
could not be solved through algorithmic models. Computers are designed to
perform repetitive tasks such as complex arithmetic calculations or database
storage and retrieval. The common aspect in these repetitive tasks is that they are
algorithmic in nature, as these are based on a precise and logically designed set
of instructions that produce a single correct output, which is the basis of
conventional computer programs. However, human problem solving involves
using symbols to which meaning can be attached such as when deciding on a
sequence of tasks, and the manipulation of these symbols is considered as the
basis of AI.

Most modern AI systems are founded on the principle that intelligence is


intertwined with knowledge, and knowledge is associated with the symbols that
people manipulate. Artificial intelligence plays an important role in knowledge
management although it is rarely mentioned as the linkage of AI to KM is rather
controversial. This is because while some believe that knowledge creation is
almost impossible without AI applications, there are those who argue that AI is
only a technological prerequisite for a knowledge management solution. Both
these stands are considered as extreme as technology complements human
processes and knowledge management is a human-related process as knowledge
is in human minds.

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In the early 1970s and 1980s, AI development was ready for the technology that
KM would bring. Computer scientists from the AI field strongly believed that
expert knowledge could be codified, directly transferred and managed through
an expert system. However, this proved to be a costly mistake as human
knowledge was much more complex and context dependent than was first
thought; in the end, not all of it could be coded into a computer program.

Nevertheless, work in this area continued, and by the mid-1990s, artificial


intelligent systems were no longer limited to the emulation of expert reasoning;
they could also be applied to managing organisational knowledge, such as
business rules, procedures and guidelines. At around the same time,
organisations started to recognise the importance of knowledge as a corporate
asset and the knowledge management movement started to gain momentum.
However, KM placed more emphasis on managing knowledge as part of a
human-related process because it viewed tacit knowledge, which is closely
inter-related with human activities, as being the most crucial knowledge for
commercial success.

By the end of the 1990s, researchers in AI started to realise that organisational


knowledge needed to be managed within a far wider context than the traditional
AI application. Some researchers such as Tsui et al. (2000) and Binney (2001)
felt that KM provided a macro view of managing knowledge, allowing the
formulation of strategies such as knowledge capture, sharing and re-use within
an organisation. Knowledge engineering (KE), on the other hand, provided the
technical focus in developing AI applications. The integration of the AI and KM
fields of study has influenced the adoption of techniques such as expert seeking
activities and social network analysis used to identify and share knowledge.
During this period, AI technology was adopted in enterprise and Internet
applications through its new role as an embedded system that provides
reasoning capabilities.

ACTIVITY 7.2

1. Discuss how artificial intelligence differs from conventional


computer systems.
2. Argue why the linkage betwen knowledge management and
artificial intelligence is rather controversial.

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138 TOPIC 7 TECHNOLOGICAL APPROACHES IN KNOWLEDGE MANAGEMENT

7.3 ARTIFICIAL INTELLIGENCE TOOLS


AI methods and tools are widely used to assist in finding expertise, eliciting
knowledge automatically and semi-automatically, interfacing through natural
language processing, and intelligent search through intelligent agents. AI
methods such as knowledge-based systems, neural networks, fuzzy logic,
evolutionary algorithms and intelligent agents, are used in knowledge
management systems to do the following:
(a) Enhance knowledge search through the use of intelligent agents in web
searches;
(b) Help establish knowledge profiles of individuals and groups;
(c) Help determine the relative importance of knowledge when it is
contributed to and accessed;
(d) Scan e-mail, documents and databases to perform knowledge discovery,
find new meaningful relationships or induce rules for knowledge-based
systems;
(e) Identify patterns in data (through neural networks);
(f) Forecast future results using existing knowledge;
(g) Provide advice directly from knowledge using neural networks or
knowledge-based systems; and
(h) Provide a natural language or voice command driven user interface for
knowledge management systems.

The next section discusses some popular AI tools such as knowledge-based


systems, case-based reasoning, fuzzy logic, neural networks and intelligent
agents.

7.3.1 Knowledge-Based Systems


Knowledge-based systems are computer systems that are used to assist decision
making where human knowledge is represented explicitly as rules in the
knowledge base. Knowledge-based systems were developed for managing
codified knowledge. Widely known as expert systems, these were originally
created to emulate the human expert reasoning process, hence the name expert
system. It became one of the most successful inventions to result from AI
research and has been successfully implemented in medical, engineering,
business, law, education and other domains. MYCIN, used to diagnose infectious
diseases, and Digital Equipment CorporationÊs XCON for configuring computer

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systems are two well-known examples of early and successful expert systems.
This has led to the birth of knowledge engineering, a domain that supports the
development of these systems.

Expert systems continue to evolve as the need to have a stable technology for
managing knowledge grows and their current role as an enabler for KM
initiatives has led to greater appreciation of this technology. As a result of this
evolutionary process, different names have been given to this technology to
reflect its current impact and adoption as an established tool for managing
knowledge, business rules and process automation in software systems. In recent
years, the terms knowledge-based systems (KBS), business rule management
systems (BRMS), rule-based systems, and knowledge systems (KS) have been
used interchangeably with the term expert system. They all refer to the same type
of system, where knowledge (in the form of rules) is inferred in order to arrive at
a decision.

Knowledge-based systems lack the breadth of knowledge and the


comprehension of fundamentals of human experts. These systems typically
perform limited tasks such as accessing credit applications and diagnosing
malfunctioning machines which can be accomplished by human experts in a few
minutes or hours. Problems that cannot be solved by human experts in the same
short time frame are considered difficult for KBS. Nevertheless, by capturing
human expertise in certain domains, KBS can provide benefits by helping
organisations make high-quality decisions with fewer experts. Today,
knowledge-based systems are widely used in business in discrete, highly
structured decision making situations.

7.3.2 Case-Based Reasoning


Knowledge-based systems mainly capture the tacit knowledge of human experts
as rules, but organisations also would have collected knowledge of previous
experience and expertise that they have developed over the years. This type of
valuable organisational knowledge can be captured and stored using case-based
reasoning. In case-based reasoning (CBR), detailed description of organisational
past experiences of human experts dealing in various projects are represented as
cases. These cases are stored in a database and retrieved when the organisations
employees encounter a new case with similar parameters. In this situation, the
CBR adapts the solutions used to solve previous problems successfully for use in
solving the new problems. The system searches for stored cases with similar
problems, finds the most applicable case and applies the solution of the old case
to the new case. Unsuccessful solutions are appended to the case database along
with descriptions as to why they failed.

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Knowledge-based systems function by applying a set of IF-THEN-ELSE


rules extracted from human experts. However, case-based reasoning represents
knowledge as a series of cases, and this knowledge base is continuously growing
and refined by the users. Case-based reasoning is widely used in diagnostic
systems in the medical domain or customer support, where the users can retrieve
previous cases similar to the new case. The system then suggests a solution or
diagnosis based on the best-matching retrieved case.

7.3.3 Fuzzy Logic Systems


Humans do not think in terms of conventional IF-THEN rules or precise
numbers. People tend to group things imprecisely using rules for decision
making that may have many grey areas. For example, a person can be strong or
intelligent. An organisation can be small, medium or large. Temperature can be
hot, cold cool, or warm. These categories represent a range of values.

Fuzzy logic is a rule-based technology that can represent this imprecision by


creating rules that use approximate or subjective values. It can elaborate on a
particular situation or process linguistically and then represent that description
in a small number of flexible rules. This technique uses the mathematical theory
of fuzzy sets and stimulates the process of normal human reasoning by letting
the computer behave less precisely and logically than conventional computer
methods. Fuzzy logic can be useful because it is an effective and accurate way to
describe human perceptions of decision-making problems. Most situations are
not 100% true or false. There are many control and decision-making problems
that cannot easily fit into a strict true-false situation. Organisations can adopt
fuzzy logic in developing software systems that capture tacit knowledge where
there exists linguistic ambiguity.

To comprehend this situation better, let us look at the technique how fuzzy logic
would represent various temperatures in a computer application to control room
temperature automatically. These terms (known as membership functions) are
imprecisely defined so that, for example in Figure 7.1, cold is between 50 degrees
and 70 degrees (in Fahrenheit), although the temperature is most clearly cool
from about 60 to 67 degrees. Note that the values of cold, cool and warm can
overlap with each other. To control the room environment using this logic, the
programmer would develop similarly imprecise definitions for humidity and
other factors, such as outdoor wind and temperature. One of the rules would be:
„If the temperature is cool or cold and the humidity is low, while the outdoor
wind is high and the outdoor temperature is low, raise the heat and humidity
in the room‰. The computer would then combine the membership function
readings in a weighted manner, and using all the rules, raise and lower the
temperature and humidity.

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Figure 7.1: Membership functions for the input temperature in the logic of the thermostat
to control room temperature

Fuzzy logic provides solutions to problems requiring expertise that is difficult to


represent in the form of concrete IF-THEN rules. There are many real-life
applications of fuzzy logic systems in use worldwide. In Japan, SendaiÊs subway
system uses fuzzy logic controls to accelerate smoothly, and standing passengers
do not need to hold on. Mitsubishi Heavy Industries in Tokyo have been able to
lower the power consumption of its air conditioners by 20% through the
implementation of control programs in fuzzy logics. CamerasÊ auto focus device
works because of fuzzy logic. In this case, fuzzy logic enables incremental
changes in inputs to produce smooth changes in outputs instead of
discontinuous ones. This makes fuzzy logic useful for consumer electronics such
as in refrigerators, washing machines and rice cookers, and engineering
applications.

Fuzzy logic systems are also useful in management decision making and
organisational control. It is used to detect possible fraud in medical claims, help
stock traders select companies for potential acquisition and decide risk categories
for insurance applications.

7.3.4 Neural Networks


Neural networks are used for solving complex, poorly understood problems for
which a huge amount of data has been gathered. Neural networks work by
finding patterns and relationships in large amounts of data that would be very
complicated and difficult for human to analyse. They discover this knowledge
by using hardware and software that parallel the processing patterns of the
biological aspect of the human brain. Neural networks are designed to learn
patterns from large quantities of data by going through data, searching for
relationships, building models, and correcting the modelsÊ errors over and over
again.
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A neural network contains a large number of sensing and processing nodes that
continuously interact with each other. Figure 7.2 shows one type of neural
network consisting of an input layer, an output layer and a hidden processing
layer. People train the network by providing it with a set of training data for
which the input produce a known set of outcomes or conclusions. This enables
the computer to learn the correct example. As more data are entered into the
computer, each case is compared with the known outcome. If the outcome is
different from the expected one, then a correction is calculated and applied to the
nodes in the hidden processing layers. These steps are repeated until a specific
condition is met, for example, correction of less than 5% is achieved. The neural
network shown in Figure 7.2 has learned how to identify a fraudulent credit
purchase.

Knowledge-based systems are designed to emulate the ways human experts


solve problems, while neural network developers claim that they do not program
solutions and do not aim to solve specific problems. Instead, neural network
developers seek to put intelligence into hardware in the form of a generalised
capability to learn. A knowledge-based system, in contrast, is very specific to a
given problem or domain, and cannot be retrained easily.

Figure 7.2: How a neural network works

Neural network applications can be found in medicine, science and business


domains, which solve problems involving pattern classification, prediction,
financial analysis, and control and optimisation. In the medical domain, neural
network applications are used to screen patients for coronary artery disease,
diagnose patients with epilepsy, and do pattern recognition of pathology images.
In the financial industry, neural networks are used to discover patterns in a vast
amount of data that might assist in predicting the performances of equities,
corporate bond ratings and future markets. Visa International monitors all Visa
transactions for sudden changes in the buying patterns of cardholders using
neural network to detect credit card fraud.

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Although neural networks are very useful, there are several puzzling aspects
about them. Unlike a knowledge-based system, which has the ability to explain
why it has arrived at a solution, neural networks cannot always explain how a
solution is reached. Furthermore, neural networks cannot always guarantee a
completely certain solution, arrive at the same solution again with the same input
data, or guarantee the best solution. They are also very sensitive and may not
perform well if their training is too little or too much. Currently, neural networks
are used to aid human decision makers.

7.3.5 Intelligent Agents


Intelligent agent technology can assist businesses in navigating through a large
amount of data to find and act on information that is considered important.
Intelligent agents are software programs that work in the background without
direct human intervention to perform specific repetitive and predictable tasks for
an individual user, business process or software application. The agent uses a
limited built-in or learned knowledge base to perform tasks or make decisions on
behalf of the user, such as deleting junk e-mails, scheduling appointments, or
travelling over interconnected networks to find the cheapest airfare to Langkawi.

There exist many intelligent agent applications nowadays and these can be found
in operating systems, application software, e-mail systems, mobile computing
software, virus detection programs and network tools. For example, wizards
found in Microsoft Office software tools have built-in capabilities to show users
how to accomplish various tasks such as formatting documents, or drawing
tables, and to anticipate when a user requires assistance. Several names are used
to describe intelligent agents and these include software agents, wizards,
software daemons, knowbots, softbots and bots (intelligent software robots).
These terms sometimes refer to agent of different types or intelligence levels.

Many complex phenomena can be modelled as systems of autonomous agents


that follow relatively simple rules for interaction. Agent-based modelling
applications have been built to model the behaviour of consumers, stock markets
and supply chains.

Procter & Gamble (P&G), manufacturer of personal care, food and household
products, used agent-based modelling to improve coordination between different
members of its supply chain in response to changing business environments.
Figure 7.3 illustrates the use of intelligent agents in Procter & GambleÊs supply
chain network. The network models a complex supply chain as a group of
semiautonomous agents representing individual supply chain components such
as trucks, productions facilities, distributors and retailers. The behaviour of each
agent is programmed to follow rules that mimic actual behaviour, such as

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„dispatch a truck when it is full‰. Using agents, the company can do simulations
to perform what-if analyses on inventory levels, ion-store stockouts and
transportation costs.

Using intelligent agent models, P&G found that trucks must be dispatched before
they are fully loaded. Although transportation costs would be higher for partially
loaded trucks due to driver time and fuel to deliver fewer goods, the simulation
showed that retail store stockouts would happen less frequently, thus reducing
the amount of lost sales, which would be more than the higher distribution cost.
Through agent-based modelling, P&G saved about $300 million annually on an
investment that is around 1% of the saving amount.

Figure 7.3: Intelligent Agents in P&GÊs Supply Chain Network

Integrating intelligent agents with enterprise portals is a powerful technique that


can deliver to users the required information they need to perform their tasks.
The intelligent agent learns what the users prefer to see, and how users organise
it. Then, the intelligent agent takes over to provide it at the desktop like how an
assistant does.

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ACTIVITY 7.3

1. Briefly discuss how knowledge expert systems have evolved.


2. What is case-based reasoning and how is it used in managing
knowledge?
3. Argue the importance of having fuzzy values compared to precise
values.
4. Describe the limitations of neural networks compared to
knowledge-based systems.
5. Justify why intelligent agent technology is useful for knowledge
management.

7.4 KNOWLEDGE MANAGEMENT SYSTEMS


(KMS) IMPLEMENTATION
In the previous Sections 7.2 and 7.3, you have studied the role of AI in managing
knowledge and popular AI tools used for knowledge management. In this
section, you will look at the different categories of commercially available tools
that can be used by organisations in managing knowledge.

The greatest challenge of KMS is to identify and integrate the three components
of communications technologies, collaboration technologies and retrieval
technologies, to meet the knowledge management needs of the organisation.
Earlier knowledge management systems were built with networked technology –
intranets, collaborative computing tools – groupware and databases – knowledge
repository. These systems were constructed from a variety of off-the-shelf
IT components. Larger management consulting firms like Accenture and
J. D. Edwards developed their own knowledge architecture with a set of tools
that combined all the three types of technology. Collaborative computing suites
like IBMÊs Lotus Notes/Domino and GroupSystemsÊ OnLine also provide many
KMS capabilities. Other systems integrate different sets of tools from a single or
multiple vendors, like J. D. EdwardsÊ Knowledge Garden KMS which integrates
Microsoft tools and products. However, the KMS technology has evolved to
integrate the three components into a single package.

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7.4.1 Knowledge Management Products and Vendors


Technology tools that support knowledge management are known as knowware.
Many knowledge management software packages consist of one or more of the
following tools: collaborative computing tools, knowledge servers, enterprise
knowledge portals, electronic document management systems, knowledge
harvesting tools, search engines and knowledge management suites. Several
of these packages provide many tools as they are important in an effective
knowledge management system. For example, many electronic document
management systems have integrated collaborative computing capabilities in
their tools to make them much more applicable for knowledge management.

Knowledge management systems can be purchased as a complete system or in


modules from one of the many software development companies and enterprise
information systems vendors. These systems can also be acquired from large
consulting firms, or outsourced to the application services providers (ASP). The
different types of alternatives in acquiring KMS will be discussed in the next
section.

(a) Software Development Companies and Enterprise Information Systems


Vendors
Software development companies and enterprise information systems
vendors offer a variety of knowledge management packages, ranging from
individual tools to comprehensive knowledge management suites. These
large selections of tools allow companies to search for tools that will match
the requirements for knowledge management. The following subsections
review these software packages based on the seven knowware categories.

(i) Collaborative Computing Tools


Collaborative tools, or groupware, were first adopted to enhance the
transfer of tacit knowledge amongst employees within an organisation.
GroupSystems, one of the earliest collaborative computing systems,
provides several tools that support group work such as electronic
brainstorming and idea categorisation, while, Lotus Notes/Domino
are popular in supporting an enterprise-wide collaborative
environment. Other collaborative tools are MeetingPlace (Latitude),
Lotus Sametime (Lotus Development Corp.), WebEx (Cisco Corp.),
Groove Networks (Microsoft Corp), and Oracle Collaboration Services
(OCS) 10g (Oracle Corp.), and eRoom (eRoom Technology Inc.).

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(ii) Knowledge Servers


A knowledge server hosts the main knowledge management
software, including the knowledge repository, and provides access to
other knowledge, information and data. Examples of knowledge
servers are Hummingbird Knowledge Server, the Sequois Software
XML Portal Server, and AutonomyÊs Intelligent Data Operating Layer
(IDOL) Server. AutonomyÊs IDOL Server connects people to content,
content to content, and people to people through modules that enable
organisations to integrate various personalisation, collaboration, and
retrieval features. The server provides a knowledge repository, a
centralised location for searching and accessing information from
various sources, such as the Internet, corporate intranets, databases
and file systems, thereby enabling the efficient distribution of time-
critical information. The server can be seamlessly integrated with
the companyÊs e-business suite, which allows rapid deployment of
applications across the enterprise.

(iii) Enterprise Portals


Enterprise Knowledge Portals (EKP) are the doorways into many
knowledge management systems. They have evolved from the
concepts underlying executive information systems, group support
systems, web browsers and data management systems. An enterprise
portal provides a single access point for a huge body of explicit
information such as project plans, white papers, technical
specifications, financial reports, product announcements and others.

These enterprise knowledge portals are one of the ways to organise


the many sources of unstructured information in the organisation.
Most of the portals combine data integration, reporting mechanism,
and collaboration, while document and knowledge management is
handled by a server. The portal is a virtual place in a network of
online users. The portal aggregates each userÊs total information needs
such as data and documents, e-mail, web links and queries, dynamic
feeds from the network, and calendar and task lists. The personal
portals have been transformed into an enterprise knowledge portal,
useful for knowledge management.

CiscoÊs Employee Connection is one highly successful portal that


provides anytime, anywhere access to the companyÊs intranet. The
purpose of the system is to connect as many systems and applications
as possible so that users have a single entry into all of CiscoÊs
information systems.

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The earlier enterprise information portals in the market did not have
knowledge management features, however, now most of them do.
Leading portal vendors include Autonomy, Brio, Corechange,
Dataware, Intraspect, Hummingbird, InXight, IBM/Lotus, Knowmadic,
OpenText, Plumtree, Verity, Viador and Vignette. Database vendors
such as Oracle, Sybase and Microsoft are also selling knowledge
portals. Portal prices typically range from a few hundred thousand
to a few millions depending on the requirements and the size of the
organisation. One popular knowledge portal in Malaysia is
myGoverment – the Malaysian governmentÊs official portal.

(iv) Electronic Document Management (EDM)


Electronic document management systems focus on documents in
electronic form as the collaborative focus of work. EDM systems
enable users to access the required documents, usually through
a web browser over the corporate intranet. EDM systems allow
organisations to manage documents and workflow better for
smoother operations. They also enable users to collaborate on
document creation and revision. Many knowledge management
systems adopt an EDM system as the knowledge repository, as there
is a common link in terms of purpose and benefits.

Electronic document management systems such as DocuShare (Xerox


Corp.) and Lotus Notes (IBM) allow direct collaboration on a common
document. Some other EDM systems include Eastman Software DMX
(Eastman Software), FileNet P8 (IBM), infoRouters DMS (infoRouter),
LiveLink (Open Text Corporation), Pagis Pro (ScanSoft Inc.) Xpedio
(IntraNet Solution), and CaseCentral.com (Document Repository Inc.)

The current approach to electronic document management, known as


content management systems (CMS), is changing the way documents
and their contents are managed. A content management system
produces dynamic versions of documents, and automatically maintains
the current set for use at the enterprise level. The growth of web-
based materials requires organisations to maintain a mechanism to
provide content that is consistent and accurate across enterprises.
EDM systems, enterprise knowledge portals and other CMSs fill this
need. The main goal here is to provide knowledge workers with
access to large amounts of unstructured text. CMS. A subset of CMS
for managing changing business requirements is business rule
management with tools like Ilog JRules and Blaze Advisor that are
designed to handle smaller chunks of content. These tools are also
used in knowledge-based systems.

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(v) Knowledge Harvesting Tools


Tools for capturing knowledge unobtrusively are useful as they
enable a knowledge contributor to be minimally involved in
knowledge harvesting projects. An ideal approach to knowledge
capture is to embed this type of tool in a knowledge management
system. An example is the AutonomyÊs ActiveKnowledge, which is an
expertise-location software package that analyses a userÊs outgoing
e-mail to parse subject expertise. It maintains a directory of expertise
and offers ways to contact experts, while maintaining privacy controls
of the experts. It can also be used on other standard document types.

(vi) Search Engines


Search engines are useful in performing the essential functions of
knowledge management, locating and retrieving necessary documents
from vast collections accumulated in corporate repositories. Companies
such as Google, Yahoo, Verity, Inktomi (bought over by Verity) and
Nervana are offering a variety of search engines that are capable of
indexing and cataloguing files in various formats as well as retrieving
and prioritising relevant documents in response to user queries.

(vii) Knowledge Management Suites


Knowledge management suites are complete knowledge management
solutions ready to use. They integrate communications, collaboration,
and storage technologies in a single convenient package. A knowledge
management suite must still have access to internal databases and
other external knowledge sources; therefore, some integration is
required to make the software truly functional. Knowledge
management suites are powerful approaches to developing a KMS
because they offer one user interface, one data repository and one
vendor.

Lotus/IBM offers a complete range of knowledge management


products including the Domina platform and the WebSphere portal.
There are other acceptable sets of tools for knowledge management
initiatives such as Dataware Knowledge Management Suite,
KnowldgeX by KnowledgeX, Inc., and others. Autonomy Knowledge
Management Suits provides document categorisation and workflow
integration. Some enterprise information system vendors such as SAP
and Oracle are developing knowledge management related technologies
as a platform for business applications. Siebel Systems is repositioning
itself as a business-to-employee knowledge management platform.

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(b) Consulting Firms


Many major consulting firms such as Accenture, Cap Gemini Ernst & Young
and others have successful knowledge management initiatives. In most cases,
these become products after they have succeeded internally and provide
assistance in establishing knowledge management systems and measuring
their effectiveness. Consulting firms also provide some direct, out-of-box
proprietary systems for vertical markets and several management consulting
firms define their knowledge management as a service.

(c) Knowledge Management Application Service Providers


Application service providers (ASPs) have evolved as a type of KMS
outsourcing on the web. There are many ASPs for e-commerce on the
market. For example, Communispace (communispace.com) is a high-level
ASP collaboration system that focuses on connecting people to people (not
just people to document) to achieve specific objectives, regardless of
geographic location, time and organisational barriers. Figure 7.4 shows the
main web page of the Communispace website. As a hosted ASP solution, it
is easy to rapidly deploy within organisations. Unlike traditional KM
systems that organise data and documents, or chat rooms where people
simply swap information, Communispace contains a rich assortment of
interactions, activities and tools that connect people to the colleagues who
can best help them make decisions. It attempts to make a community
conscious about taking responsibility for its actions and knowledge. Its
climate components help participants to measure and understand how
people are feeling about the community. The virtual cafe gives
geographically dispersed employees a way to meet and learn about each
other through pictures and profiles.

Figure 7.4: Communispace Web Page

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SELF-CHECK 7.2

1. What is a collaborative computing tool?


2. How do knowledge servers support knowledge management
activities?
3. Why are enterprise knowledge portals considered as the
doorways to knowledge management systems?
4. What is the current approach to electronic document management
systems?
5. Identify two features that make knowledge suites attractive to
organisations as a tool for effective knowledge management.

7.5 INTEGRATION OF KMS WITH OTHER


INFORMATION SYSTEMS
In Sections 7.3 and 7.4, you have studied various types of knowledge
management systems and applications. In this section, you will see how
knowledge management systems can be integrated with other types of
organisation business information systems.

Knowledge management system is an enterprise system; therefore, it must be


integrated with other enterprises and information systems in the organisation.
Obviously, when it is designed and developed, it cannot be perceived as an add-
on application. It must truly be integrated into other systems. Through the
structure of the organisational culture, a knowledge management system and its
activities can be integrated into the firmÊs business processes. For example, a
group working on customer support can capture its knowledge to provide help
on customersÊ difficult problems. In this case, help-desk software would be one
type of package to integrate into a KMS, especially into the knowledge
repository. A major challenge here is in integrating data that resides in a variety
of systems and formats.

(a) Integration with Decision Support Systems


Knowledge management systems usually do not involve running models to
solve problems, which is a typical activity done in decision support systems
(DSS). However, since a knowledge management system provides help in
solving problems by applying knowledge, part of the solution may involve
running models. A KMS could be integrated into an appropriate set of
models and data, and activated them when a specific problem calls for it.

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(b) Integration with Artificial Intelligence


Knowledge management has a natural relationship with artificial intelligence
methods and software, though knowledge management is not an artificial
intelligence method. There are many ways in which KM can be integrated
with artificial intelligence. For example, if the knowledge stored in a KMS is
to be represented and used as a sequence, then the knowledge-based
system becomes part of the KMS. A knowledge-based system could also
help a user in identifying how to apply a chunk of knowledge in the KMS.

(c) Integration with Customer Management Systems


Customer relationship management (CRM) systems help users in dealing
with customers. One important aspect is the help-desk notion described
earlier. However, CRM goes even deeper. It can develop usable profiles of
customers and predict their needs, so that an organisation can increase sales
and better service its clients. A KMS can certainly provide tacit knowledge
to people who use CRM directly in working with customers.

(d) Integration with Supply Chain Management Systems


The supply chain is often considered to be the logistics end of business. If
products do not move through the organisation and go out of the door, the
firm will fail. So it is important to optimise the supply chain and manage it
properly, and supply chain management (SCM) systems attempt to do so.
SCM can benefit through integration with KMS because there are many
issues and problems in the supply chain that require the company to
combine both tacit and explicit knowledge. Accessing such knowledge will
directly improve supply chain performance.

ACTIVITY 7.4

1. Discuss how knowledge management systems can be integrated


with decision support systems.
2. Describe the relationship between knowledge management
systems and supply chain management systems.
3. Argue why knowledge management systems need to be
integrated with various information systems in managing
knowledge.

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7.6 KNOWLEDGE ENGINEERING


Knowledge engineering (KE) was established as a discipline in AI in the 1980s
with the aim of establishing methods and tools for developing knowledge-based
systems in a systematic and controllable manner. KE, as with other engineering
disciplines, offers scientific methodology together with theories and techniques
for analysing and engineering that knowledge. KE techniques are used in
building and developing knowledge-based systems. These are similar to software
engineering (SE) techniques, but have an emphasis on knowledge rather than
data or information processing. The emphasis on knowledge is fundamental as it
differentiates KE and SE applications. This is a characteristic of the KE problem
domain, which is mainly related to human problem solving with the system
architecture based on inference engines. KE techniques are similar to SE in that
they both advocate an engineering approach in developing systems through
well-defined development processes that turn system specifications into
workable computer programs.

Early versions of KBS were built around expert knowledge, as KE activities were
approached as a transfer process; however, this approach lacks the problem-
solving capabilities of the expert. Nevertheless, KBS developers quickly
discovered that such capabilities could only be captured through the use of
conceptual models in order to understand the problem-solving behaviour of the
expert. This leads to defining KE as a modelling process. Sections 7.6.2 and 7.6.3
will discuss this in more detail.

7.6.1 Knowledge Engineering Process


Both KE and SE development processes have the same objective: to develop the
system given the user requirements, in order to solve a particular problem
related to the domain. Systems development in SE involves the following
iterative stages regardless of the methodology adopted: gathering and analysing
user requirements, designing the system by translating user requirements into a
software specification using conceptual models, coding the software specification
into computer programs, testing the program to ensure the agreed results are
produced, implementing the system and maintaining the system throughout its
intended life span.

The KE processes for constructing a KBS in general are: requirements analysis


involving identifying the scope for the KBS, designing the system by identifying
the sources of expert knowledge for the KBS and how to represent them,
acquiring the knowledge from the expert through knowledge acquisition
techniques and constructing the knowledge base with instances of the domain

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knowledge, coding the system on target application languages or shells, testing


the system to ensure the inference mechanism is working properly and
producing the correct results, implementing the system incrementally and
performing maintenance on the system. These iterative stages of KE are
compared with SE in Figure 7.5.

KBS testing is done in two phases: verification and validation of the system. In
the verification phase, the rules in the knowledge base are analysed for sequence,
structure and specification to ensure the logical correctness of the rules. Then, the
validation of the KBS is carried out to test the behaviour of the system in a
realistic situation. There are well-established techniques for the verification and
validation of KBS which are dependent on the implementation domain of the
system. For example, in safety-critical applications such as aeroplanes and space
missions, the reliability of the KBS is essential, and therefore a formal method
verification is essential, whereas in a low-risk application such verification is not
necessary. However, testing can also be done on the correctness of the rules
during the iterative development process.

The knowledge acquired from the expert is logically checked for its correctness
before populating the knowledge base. Reliability of the knowledge base is
achieved by removing circular rules that are contradictory in meaning or logic,
deleting redundant rules that provide different methods for the same problem
which causes knowledge duplication, and removing unusable rules that never
execute because of the contradictions in the premise of the rule.

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Figure 7.5: Comparison of software and knowledge engineering development processes

In comparison with SE, the KE has one additional stage: that of knowledge
acquisition (KA). This stage is vital in KBS development as the KBS is designed
around the domain expertÊs knowledge of solving problems for a particular task,
such as diagnosis, assessment and so on. The acquired knowledge is then used to
populate the knowledge base in the form of rules, with which the system will
perform reasoning. However, in SE there is no KA stage as the system is
intended to capture information rather than reason with it and the actual dataset
of the database will be populated by the system user when the system is
deployed. Therefore, it may be concluded that the KA stage differentiates the SE
and KE domains when developing software systems.

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7.6.2 Knowledge Engineering as a Transfer Process


In the early 1980s, KE techniques were widely used to construct KBS, which were
built on the codifiable knowledge of one or more experts stored in a knowledge
base, essentially a process of knowledge transfer. This transfer approach is
influenced by the success of the Mycin expert system, which has affected the
design of earlier expert systems and expert system shells. Moreover, the
development process of KBS was based on the assumption that the codifiable
knowledge for the system already existed and just had to be collected and
implemented. The knowledge of the expert was directly transferred into the
knowledge base by identifying the rules gleaned from the knowledge acquisition
process. However, this approach fails when the knowledge of the expert is coded
with little understanding of how rules are linked or connected with one another.
For example, domain specific knowledge for disease diagnosis is mixed up with
strategic knowledge on how the diagnosis should be performed. The transfer
approach misses out the expertsÊ problem-solving experiences and capabilities
that are not directly accessible through this approach.

The transfer approach also ignores the importance of the tacit knowledge
of an expertÊs problem-solving capabilities. This creates a new problem if the
knowledge base is to be updated, as changes require substantial effort in
reconstituting the coded rules in order to implement the needed changes.
Consequently, the transfer approach is only feasible for developing prototype
systems and fails to scale up when building larger and more reliable KBSs where
knowledge bases change. These deficiencies have caused the transfer approach to
be replaced by the modelling approach. During this time, the SE community had
already used the modelling approach to construct information systems and it
seems to also suit KBS development.

Another direction taken by the KE community during this time to overcome the
limitations of the knowledge transfer approach is through Knowledge Sharing
initiatives and the major outcomes of this work are ontologies, knowledge
interchange format (KIF), Knowledge Query and Manipulation Language
(KQML) and Knowledge Representation System Specification.

7.6.3 Knowledge Engineering as a Modelling Process


KE is no longer simply a means of mining knowledge from the expertÊs head and
the assumption that knowledge can be directly transferred into computer
programs is indeed false. The transfer approach was replaced by the modelling
approach, which promotes the creation of models that offer similar performance
when solving problems in the area of concern. KE now encompasses methods

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and techniques for knowledge acquisition, modelling, representation and use


of knowledge and KBS development is viewed as a modelling activity in the
analysis and design stages of the systems development.

The foundation for the modelling process is based on the knowledge-level


principle popularised by Alan Newell (Newell 1982), who emphasises the
importance of developing problem-solving models of the problem domain rather
than focusing on knowledge representation. As a result, two different areas of
research have been established based on the knowledge-level modelling
principle. One emphasises the refinement of existing knowledge-level
formalisation languages such as KARL (Knowledge Acquisition and
Representation Language) and KADS (Knowledge Acquisition and Design
Support) ML2 language. The other area of research concerns the development of
knowledge-level models for a variety of tasks and domains in order to
understand the problem-solving techniques used. Knowledge modelling efforts
are based on two distinctive approaches, the problem-solving method and
domain ontology.

Problem-solving methods (PSM) are domain independent abstract models


describing the generic inference patterns for different tasks. Ontologies define the
commonly agreed vocabularies for representing the domain knowledge. Figure 7.6
shows the use of conceptual models in KE for developing KBS.

Figure 7.6: The role of conceptual models in problem-solving


Source: Luger, 2004

Developers feel that building a KBS means building a computer model that has
problem-solving capabilities similar to those of a domain expert. It is not
necessary to be an exact replica of human cognition; instead, it must simulate the

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thinking processes involved in the narrow area of concern. While experts may
consciously articulate part of their knowledge, they will not be aware of a
significant part of this knowledge because it is hidden in their skills. This view
has been an important part of KE activities.

Therefore, using models KE emphasises how an expert solves a particular


problem and develops problem-solving mechanisms in computer systems. It also
helps articulate hidden tacit knowledge of the expertsÊ skills, which is lost in the
knowledge acquisition process (as most of the acquired knowledge is explicit
knowledge). As such, the modelling process in KBS development mainly
involves modelling an expertÊs reasoning mechanisms and the models are useful
in bridging the gap between user requirements and the expert, with the KBS
performing the required functionality. As a result of the modelling approaches,
many KE methodologies have been developed such as CommandKADS, Model-
based and Incremental Knowledge Engineering (MIKE), Protégé and KARL. The
shift towards the modelling approach has also enabled KBS models to be re-used
in different areas of the same domain. In the past, most KBSs had to be designed
from scratch every time a new system was needed and they could not interact
with other systems in the organisation.

7.6.4 Process Roles in Knowledge Engineering


There are several important roles for humans in the process of developing KBS:
knowledge experts, knowledge engineers, knowledge-system developers and
users. Different individuals in larger projects usually perform these roles.
However, in smaller projects the same person usually performs a combination of
the roles.

Knowledge experts are knowledge providers; content is extracted from them


using different knowledge elicitation techniques such as interviewing, protocol
analysis, laddering, concept sorting and repertory grids. Knowledge experts
need not be the real experts in the domain but might be a person or a group of
people whose expertise is often used in decision-making processes within the
organisation. The tasks of knowledge acquisition from experts, understanding
the domain of the targeted system and the analysis of knowledge activities are
those of the knowledge engineer. The engineer will also interact with the
knowledge users of the system to gather user requirements for the system and is
the system analysts in a KBS project. The KBS developer will take the knowledge
requirement gathered during the analysis stage and present it in the form of
analysis models that are used to design and implement the KBS. People use the
KBS in order to perform their job functions and it is important to include them in
the project when gathering user requirements.

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Knowledge-based systems are developed using knowledge engineering


techniques that are similar to those used in software engineering as both
techniques adopt an engineering approach to systems development. Knowledge
engineering advocates the modelling approach to construct KBS and this enables
the reuse of the knowledge model in different areas of a domain. It has replaced
the conventional knowledge transfer approach, which only concentrated on
extracting expert knowledge in the form of rules without making an effort to
understand the expertÊs reasoning processes in decision-making. The modelling
approach adopted in knowledge engineering is similar to conceptual modelling
that is widely used in the software engineering domain. Consequently, the
modelling techniques, tools and languages used in the software engineering
domain can be utilised in constructing models for knowledge engineering.

SELF-CHECK 7.3

1. Identify the major differences between knowledge engineering


and software engineering.
2. What are the stages in knowledge engineering development
processes?
3. Why is knowledge engineering as a modelling process better than
the transfer process?
4. How is the knowledge-level principle used in knowledge
engineering?
5. What are the process roles for knowledge workers in knowledge
engineering projects?

7.7 KBS ARCHITECTURE, ISSUES,


ADVANTAGES AND DEVELOPMENT
PROCESS
A knowledge-based system is software that has some knowledge or expertise
about a specific, narrow domain and is implemented such that the knowledge
base (KB) and the control architecture – KB inference engine are separate.
Knowledge-based systems have capabilities that often include inferential
processing (as opposed to algorithmic processing), explaining rationale to users
and generating non-unique results (OMG, 2004). From this definition, it can be
seen that the important functional features of KBS are that domain specific
knowledge is represented in the knowledge base, and this knowledge is used in

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the reasoning process of the inference engine to generate decisions related to the
problem domain. These features are unique to KBS and as such are commonly
used to define KBS in the literature.

Nevertheless, there is no single dividing line that differentiates KBS from


information systems (IS), as almost all examples contain elements of both
knowledge and information and are developed using sound engineering. An IS is
a set of interrelated components that collects, processes, stores, analyses, and
disseminates data and information within an organisation. The main differences
between IS and KBS are that in a KBS its functionality is embedded in the
inference engine and the knowledge about the application domain is represented
in an explicit form in the knowledge base. However, current implementations of
certain types of KBS are based on procedural (algorithmic) processing in contrast
with conventional inferential processing. The KBSÊ unique functionality can be
seen in the architecture discussed in the next section.

7.7.1 Architecture
Architecture differentiates a knowledge-based system from an information
system. The reasoning engine (inference engine) and the knowledge base are the
main constituents of KBS architecture. This basic architecture was originally
developed and used in expert systems in the late 1970s and is still in use today.
The inference engine is usually programmed in a shell-based programming
language rather than developed and run with explicit declarative knowledge and
information to arrive at a conclusion. The knowledge base contains all the
domain knowledge represented as rules (production rules) that are to be
consumed by the inference engine during execution.

The current use of this architecture is a modified version of the original one. The
original architecture is shown in Figure 7.7. Here, the reasoning control actually
refers to the reasoning or inference engine, and application domain knowledge
refers to the knowledge base of the domain.

Figure 7.7: The basic architecture of the first generation of expert systems

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The implementation of this modular architecture is well accepted in the area of


KBS development by both researchers and practitioners; the reasoning engine is
the main structural difference between an IS and a KBS. Examples of the current
usage of this architecture are shown in Figure 7.8. The knowledge base in both
these examples contains the knowledge acquired from the domain expert
through the knowledge acquisition process and is represented in the knowledge
base as rules, decision criteria, facts and other forms of knowledge representation.
As for the inference engine, it contains the necessary reasoning steps that will be
used to guide the decision-making process.

Figure 7.8: Schematic view of a KBS

KBS comprises of three basic components (with reference to Figure 6.7): a


knowledge base, the context and an inference mechanism. The context
component, which is additional to the original architecture, contains the current
problem scenario that is dynamically constructed by the inference mechanism
and the knowledge base. The knowledge is used to manipulate the context, by
employing the inference mechanism to make decisions. Other additional
components to the basic ones are: the user interface, an explanation facility and
knowledge acquisition system. Users will interact through the interface, which
will then send the inputs to the system. The reasoning steps and the knowledge
used in achieving a particular result will be provided by the reasoning
component. The knowledge acquired from the domain experts will populate the
knowledge base through the acquisition system.

Based on the KBS architecture presented in Figures 7.7 and 7.8, it may be
concluded that the core components of any given KBS are the knowledge
base and the inference engine (or reasoning mechanism). However, current
architectures differ from the original because new components such as
knowledge acquisition, user interface, and the explanation facilities are now
added to the core components to make the architecture much more suitable for
those current practices used in systems development. One example of this is the
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user interface component, which has become an important part of any systems
development project and takes the form of a conventional graphical user
interface (GUI). Due to the growing importance of the user interface element in
any system, this component has been explicitly included in the current KBS
architecture.

7.7.2 Issues in KBS for Managing Knowledge


The need to manage knowledge and business rules through technology has
caused KBS to be implemented in various (newer) domains and the capabilities
of modern KBS technologies have been exploited to manage human
competencies, i.e. knowledge. Examples of these domains are: software
architecture design assistant, a tool for inferring semantic concepts from visual
models, hospital management, clinical management, managing bank loan risk
and currency exchange advising. Other examples include legal regulations,
knowledge-based engineering for managing knowledge related to product
design, learning context management for e-learning applications, and the
production of metals and related compounds.

Furthermore, while traditionally KBSs were stand-alone applications, today they


are becoming a part of an enterpriseÊs information system. KBSs have been
embedded/integrated with Computer Aided Design (CAD) systems to manage
engineering product design knowledge. Other examples of integration can be
seen in the field of power system monitoring using the SCADA standard where
the knowledge system is successfully used to perform intelligent alarm
interpretation. Some KBS capabilities have been integrated into Geographical
Information Systems (GIS) to provide intelligent advice. KBSs have also been
incorporated into customer support applications for managing mortgages and
bank loans. Even e-commerce systems have adopted KBS technology in order to
provide recommendations.

KBS provides solutions which cannot be obtained by conventional methods


through its unique inferential process. There are a number of commercial KBSs in
use, for example, Design-a-Trial (DaT) by InferMed Ltd assists in designing and
planning clinical trials and EULE, developed in-house by Swiss Life (a leading
provider of life insurance), processes insurance and TURBOLID was developed
in Spain for on-line plant-wide supervision of the continuous processes to be
found in a sugar-beet factory. All these solutions are well received and have been
judged as successful in their respective commercial domains.

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Most knowledge systems adopt rules to drive their inference engines. Earlier
inference engines (such as CLIPS, VP-Expert, XeprtRule and KnowledgePro)
used shell-based production rule systems. These were written in a declarative
rather than procedural programming style based on algorithms such as RETE.
However, there have been developments in inference engines in which support
for embedding features in conventional programming languages such as C++
and Java are implemented, which simplifies the integration of conventional
program code with rule inferencing capabilities.

As a result, the Java Expert System Shell (Jess), based on C-Language Integrated
Production System (CLIPS), has been developed to enable enterprise software
developed using Java to have some built-in reasoning capabilities. Use of the Java
programming language to develop rule-based applications has prompted the
Java community to develop standards for Java-based rule engines based on the
JSR-94 Java Rule Engine API. The JSR-94 specification is popular among vendors
and is implemented in ILOG JRules, Jess, Fair Isaac Blaze Advisor, Computer
Associates CleverPath Aion, Drools and others.

The KBS technology has evolved from the early rule-based reasoning to
accommodate other strands of AI research, such as fuzzy logic, genetic
algorithms, case-based reasoning and neural networks. This evolution has been
beneficial to the knowledge management initiatives community as different KBS
technologies can be utilised in providing solutions to the problem domains.
Nevertheless, production rules are considered as the most convenient approach
in representing most business rules and are widely supported by many inference
engines. Section 7.7.3 discusses the benefits and problems of using KBS as a tool
for managing knowledge.

7.7.3 Benefits of KBS in Managing Knowledge


KBSs offer many advantages as an assistive tool for humans in managing
knowledge and these can be categorised as: productivity, knowledge
preservation, quality improvement, training and job enrichment related benefits.
KBS technology is better appreciated when the benefits of adopting them are well
understood. A comprehensive literature review of the benefits of using KBS
technology found advantages linked to improved decision quality, improved
availability of expert knowledge, improved cost saving and higher productivity.

However, these benefits are only achievable if the quality of knowledge in


a knowledge base is thoroughly verified and validated using appropriate
techniques, as this ensures that the KBS results are accurate and consistent. This
is performed by using logical verification and rule verification, which verify the
expert knowledge for completeness and consistency. Completeness is the ability

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164 TOPIC 7 TECHNOLOGICAL APPROACHES IN KNOWLEDGE MANAGEMENT

of the KBS to produce some decision for all possible inputs, while consistency is
the KBSÊ ability to produce a standard set of decisions that are true for all
possible inputs. Rule verification identifies redundant rules, inconsistent rules,
circular rules and unreachable decisions. Validation of the KBS is done by
executing the system and comparing the test results against the required
performance. This proves that the KBS is producing decisions only for the set of
given inputs. Validation and verification is an important area in KE and any KBS
that is crucial to safety and health decisions must be verified and validated; this
contrasts with those systems that are not safety or mission critical.

Using KBS the quality of the decisions made increases because there are fewer
inconsistencies than if the decisions were performed manually. Results produced
by the KBS are consistent throughout its operational lifespan unless it is modified
to incorporate new rules or delete older ones. Two copies of the same KBS will
provide the same answer to the same problem; human experts do not achieve
this level of consistency and such consistency is important in certain domains
such as insurance premium calculations for insurance policies. Achieving such
consistency is vital as decision quality is an important criterion when adopting
KBS, particularly in relation to decisions involving huge amounts of data,
variables and information.

KBSs are also capable of assisting experts in decision making even if the experts
have that knowledge to hand; this improves the accuracy and timeliness of
decisions made. Experts are humans, who have the tendency to forget and make
mistakes when making decisions. However, when the knowledge of the experts
is stored as rules in the knowledge base, such mistakes can be avoided provided
there are no implementation errors. KBSs will always produce the desired result
for every decision case, as they will not leave out any rule (consideration) in the
reasoning process. The decision made will always be the same and reliable.

Availability of expertise knowledge in an organisation improves as the KBS can


be replicated to make the knowledge available at more than one location. Except
in situations such as routine downtime, KBSs also make expert knowledge
available throughout the day for the whole year, delivering the same decisions.
This contrasts with human experts, who have fixed working hours or are only
available for a limited time throughout a day. They will also experience fatigue,
which might have a damaging effect; KBSs are not subject to fatigue and are
therefore always available.

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Implementing KBS in organisations provides the means for reducing operational


and other overhead costs through reducing the time needed for decision making,
improving the decisions so that they are infallible and consistent and generating
reports faster. All this reduces the financial costs of making decisions.
Consequently, KBS decision-making strategies can be analysed and studied in
greater detail, which in turn can help to improve the organisation decision-
making strategies which, then enables better decisions in the future.

7.7.4 Stages in KBS Development


The development process of a KBS is similar to any general system development;
stages such as requirements gathering, system analysis, system design, system
development and implementation are common activities. The general stages in
KBS development can be classified as: business modelling, conceptual modelling,
knowledge acquisition, KBS design and KBS implementation, which corresponds
to the KE development process discussed earlier in Section 7.6 but with slightly
different terminology. This is different names are given to the same activities or
some activities are grouped together. Figure 7.9 shows the stages of a KBS
development and the corresponding stages in the KE development process
discussed in Section 7.6, along with the description of each stage.

(a) Business Modelling


In business modelling, the business processes of an organisation are
modelled from a knowledge point of view. The business models are used to
view the overall context in which the knowledge model will function; this is
also known as problem domain identification or requirements analysis.
This is where the business case, the technical and project feasibility study
are conducted. It allows for an analysis of the actual need for a knowledge-
based application and the knowledge that is to be modelled. The
components of business modelling are the business model and system
context model. A business model will describe the overall view of the
business structure, functions, processes, problems and opportunities, the
people involved, the knowledge processes and flow, and the knowledge
assets of the organisation. The system context model is used to describe the
organisational environment with which the system will interact. It typically
models the information and control flow between the system and its
environment. There are variations in how these stages should interact,
but the essence here is conducting the feasibility study and defining the
problem scope of the system.

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166 TOPIC 7 TECHNOLOGICAL APPROACHES IN KNOWLEDGE MANAGEMENT

Figure 7.9: Activities in KBS development with the corresponding stages in KE

(b) Conceptual Modelling


Conceptual modelling is an important stage in the KBS development
process, as it deals with the creation of implementation-independent
knowledge models and defines the expert problem-solving characteristics.
Inputs for conceptual modelling are the knowledge-intensive tasks that are
identified during the business modelling which are considered feasible
for KBS development. Conceptual models specify the knowledge and
reasoning requirements of the proposed system using either problem-
solving methods (PSM) or ontologies. Using the PSM approach, the model
has three knowledge categories: strategy models (for task level knowledge),
reasoning models (for inference level knowledge) and domain knowledge.
Each category is used to capture different knowledge structures of the
system. Conceptual models are valuable blueprints in designing KBS and
the creation of such models is the central focus of this research. Within the
field of KBS the process of creating these models is widely referred to as
knowledge modelling and is similar to the Platform Independent Model
(PIM).

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(c) Knowledge-Based System Design


KBS are designed using the problem-solving requirements and the
knowledge model from the conceptual modelling stage, together with the
knowledge acquired from the knowledge acquisition stage. The steps
involved during this design stage are: designing the system architecture,
identifying the targeted implementation platform, specifying the
architectural components and specifying the applications within the
architecture. The outcome of this stage is the design model, which describes
the structure of the KBS along with its subsystems, modules, computational
mechanism and representational constructs and is similar to the Platform
Specific Model concept. The design model is then implemented on the
deployment platform during the implementation stage.

(d) Knowledge Acquisition


Knowledge acquisition is the process of gathering knowledge from experts
or domain specialists through interactive sessions within the targeted
application domain. It is an essential stage in KBS development as the
knowledge gathered during this process is then used to construct the
knowledge model and the knowledge base for the proposed system. It
involves using a set of techniques and methods to elicit knowledge, such as
repertory grids, laddering, card sorting, twenty questions, protocol
analysis, structured interviews and observations. Knowledge acquired
during this stage is usually in the form of rules, heuristics, formulae, lists of
terms, diagrams and so on. Other sources of knowledge used in this process
are textbooks, technical manuals, case studies, operating procedures and
handbooks.

(e) Knowledge-Based System Implementation


During the implementation stage, KBSs are constructed according to the
design obtained from the system design model. The system is programmed
in the targeted application language (e.g. LISP, Prolog, OO languages,
Aion). In most cases, it involves the development of a workable exploratory
prototype to ensure that the system is functioning as intended and the
inference mechanism is working properly and producing correct results
or decisions. If every aspect of the prototype is working well and the
expectations of the users and domain experts are fulfilled, the prototype
will eventually be expanded into a fully working system and deployed into
production. Throughout its operational life span, the KBS will undergo a
series of periodic maintenance schedules in which new requirements are
incorporated, the rule-base is enhanced, operational errors are corrected
and performance is improved.

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168 TOPIC 7 TECHNOLOGICAL APPROACHES IN KNOWLEDGE MANAGEMENT

ACTIVITY 7.5

1. Describe the basic components in a KBS architecture, and the


additional components in the current KBS architecture.
2. Discuss three important benefits of using KBS in managing
organisational knowledge.
3. Argue why current KBS are usually embedded or integrated into
other larger applications.
4. Compare the activities in knowledge engineering and KBS
development, and justify why conceptual modelling in KBS
development is important.

ACTIVITY 7.6

1. Discuss the five artificial intelligence tools that are widely used
for knowledge management.
2. Provide a brief description for the following terms:
(a) Knowledge engineering
(b) Knowledge-based systems
(c) Electronic Document Management
3. Justify why the modelling process is better than the transfer
process in knowledge engineering.
4. Argue the benefits of knowledge-based systems as a tool in
managing organisational knowledge.
5. Explain why the role of artificial intelligence in knowledge
management is controversial.

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Technology is a catalyst in supporting knowledge management activities,


which in some cases are developed within the domain of artificial
intelligence.

Not all types of knowledge can be managed successfully through the use of
technology as some types of knowledge are better managed through human-
oriented processes with the support of ICT.

Knowledge management systems are built based on three sets of


technologies: communications, collaboration, and storage and retrieval.

AI methods and tools are widely used to assist in finding expertise, eliciting
knowledge automatically and semi-automatically, interfacing through natural
language processing, and intelligent search through intelligent agents. AI
methods such as knowledge-based systems, neural networks, fuzzy logic,
evolutionary algorithms and intelligent agents, are used in knowledge
management systems.

Knowledge management systems can be purchased as a complete system or


in modules from software development companies and enterprise information
systems vendors. These systems can also be acquired from large consulting
firms, or outsourced to application services providers.

Knowledge management system is an enterprise system and as such, it


must be integrated with other enterprise and information systems in the
organisation.

Knowledge engineering provides a scientific methodology together with


theories and techniques for analysing and engineering knowledge-based
systems, and these are similar to software engineering techniques, but have
an emphasis on knowledge rather than data or information processing.

Previous knowledge engineering techniques were based on the transfer


approach which ignores the importance of tacit knowledge. This was
replaced with the modelling approach that promotes the creation of models
for understanding the problem domain.

Knowledge-based systems are software that has some knowledge or expertise


about a specific, narrow domain, and is implemented such that the
knowledge base (KB) and the control architecture – KB inference engine are
separate.

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170 TOPIC 7 TECHNOLOGICAL APPROACHES IN KNOWLEDGE MANAGEMENT

Application service providers Intelligent agents


Artificial intelligence Knowledge-based systems
Case-based reasoning Knowledge engineering
Collaboration technologies Knowledge management systems.
Communication technologies Neural networks
Fuzzy logic systems Storage and retrieval technologies

Awad, E., & Ghaziri, H. H. (2004). Knowledge management. New Jersey: Prentice
Hall.
Becerra-Fernandez, I., Gonzalez, A., & Sabherwal, R. (2004). Knowledge
management – Challenges, solutions, and technologies. New Jersey:
Prentice Hall.
Debowski, S. (2006). Knowledge management. New Jersey: John Wiley & Sons.
Loudon, K. C., & Laudon, J. P. (2007). Management information systems –
Managing the digital firms. New Jersey: Prentice Hall.
Natarajan, S., & Shekhar, S. (2000). Knowledge management: Enabling business
growth. New Delhi: McGraw-Hill.
Turban, E., Leidner, D., McLean, E., & Wetherbe, J. (2007). Information
technology for management: Transforming organisations in the digital
economy. Boston: John Wiley & Sons.

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