KM Scorecard

AM ERI C AN PRO D U C T I V I T Y & Q U ALI T Y C EN T ER
knowledge management
KM Scorecard

APQCs Work in Knowledge Management

Research on KM since 1993 Research Consortia started 1995
Over 150 firms in APQCs KM Consortia 45 Best Practice firms studied in detail
Shared knowledge with thousands of KM practitioners

Publications Training Conferences
Helping firms implement KM using best practices

APQC KM Consortium Studies

Emerging Best Practices in KM (1996) Using Information Technology for KM (1997) Europe - The Learning Organisation & KM (1997) Expanding Knowledge Externally (1998) Creating a Knowledge Sharing Culture (1998-99) Successfully Implementing KM (1999-2000) Building and Sustaining Communities of Practice (2000) Content Management (May, 2001)


KM Measurement Bell Curve

Stage 1: Enter and advocate Stage 2: Develop a strategy
Stage 3: Stage 4: Stage 5: Design Expand and Institutionalize & Launch Support KM initiative

Measures
Individual Processes
Input
Resources Applied
Process
Activities Organized
Output
Productivity Goods/Services Produced
Outcome
Revenues/Profits Customer Sat/Loyalty
Converting Inputs into

Outputs

Typical Stage 1 Situation

Example:
Joe spends time writing a detailed proposal with the steps for designing and launching a CoP. Jennifer sees it after hes finished and comments, But Joe, I did that very thing last week for another client!
Result:
Redundant efforts Wasted money

Appropriate Stage 1 Measures
By interviewing people in the organization, we uncover these kinds of stories. The stories can then be used to convince management that something needs to be done. We NEED a way to capture and reuse knowledge because
Were wasting money, time, and energy; Our competitors are doing things better and faster; and Were frustrated.

Morals of Stage 1
Theres not a whole lot to measure yet. Use stories to get managements attention and tell them what kind of changes they should see with KM
Less frustration Decreased costs Increased revenue Better products


Measure Progress
How many supporters have I recruited? How much funding have I secured?
Measure the Gap

Identify KM practices already in place.
Measure Against a Benchmark

Explore what other firms are doing, particularly competitors.
Measure Cultural Readiness

Do people tend to hoard knowledge? Do we have good example stories of collaboration?
10

Morals of Stage 2
Fend off the requests for financial measurements at this stage. Explore opportunities for implementing KM. Develop a business case for doing it. Continue to talk with stakeholders about potential benefits.
11


Example
Management agrees to fund some pilots, but wants to have a progress report after 90 days.
Task
You need to come up with meaningful measures that prove the value of your pilot -- particularly in meeting the business goals.
12


Measure community effectiveness
Activity such as visits, and submissions Measure impact on the business remember your value proposition
Measure the cost of capture and compilation

Time and cost req. to capture information
Measure project management effectiveness

Was a formal methodology used? Timeline established? Objectives established and goals met?
Capture anecdotes that prove value
13

Morals of Stage 3
The measures for the KM program will be in the pilot initiatives that is, communities of practice. Once one or two communities have proven their usefulness, management will probably entertain the thought of KMs expansion into other parts of the organization.
14

Management thinks, Great job on the pilots. People are sharing information like never before and we suspect our skyrocketing sales and shrinking costs are due to this KM thing. But, we need to see some formal ROI justification before we take this enterprise-wide.
15

Use pilot project successes, particularly when financial impact outweighs investment to demonstrate what is possible Extrapolate time & cost savings to justify expansion Consider Balanced Scorecard Format for expansion initiatives
Financial Perspective Customer Perspective Internal Perspective Innovation and Learning
16

KM Balanced Scorecard
Financial Perspective
Increased Sales Improved Productivity
Customer Perspective
Customer Satisfaction Fewer Returns
Internal Perspective
Cycle Time Reduction Community Participation
Innovation & Learning

Faster to Competence Employee Satisfaction
17

Morals of Stage 4
Management needs to have some hard numbers before it decides to make KM part of the main organizational objectives. Business units will likely have to participate in funding. ROI is often based on educated guesses.
18


We wish we knew. Actually, there are some signs:
KM is embedded in the business model. Measures used in KM initiatives may become part of corporate scorecards, but focus is on business performance. Business units budget for KM activities. Organizational structure must be realigned. Evidence of KM competency becomes part of the formal performance evaluation and new employee training.
19

Morals of Stage 5
Since KMs value has already been proved, KM activity measures are only used to check progress and monitor cultural evolution. UTOPIA Your business relies on KM.
20

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AM ERI C AN PRO D U C T I V I T Y & Q U ALI T Y C EN T ER

APQCs Work in Knowledge Management

Shared knowledge with thousands of KM practitioners

Helping firms implement KM using best practices

APQC KM Consortium Studies

KM Measurement Bell Curve

Converting Inputs into

Typical Stage 1 Situation

Appropriate Stage 1 Measures

Appropriate Stage 2 Measures

Measure the Gap

Measure Against a Benchmark

Measure Cultural Readiness

Typical Stage 3 Situation

Appropriate Stage 3 Measures

Measure the cost of capture and compilation

Measure project management effectiveness

Capture anecdotes that prove value

Typical Stage 4 Situation

Appropriate Stage 4 Measures

Innovation & Learning

Typical Stage 5 Situation

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