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Knowledge Management

GROUP 5

Knowledge Management
Dave Owens
T.J. Vogt
Chatchawan Wongwattanakit OT
Yueping Wang

Knowledge Management

What is Knowledge Management?

Knowledge Management is a waste of money. Organizations


spend billions of dollars in their efforts to cut a corner or two
resulting in just a fraction of savings
Richard Sapio
CEO, Mutual Capital Alliance

(8)

Knowledge Management

Agenda
Questions/
Discussion

What is KM?

Summary

Key Concepts

Knowledge
Management
KM in the Army

Implementation &
Maintenance

Other KM
Cases
PwC, LRC

KM in China
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Knowledge Management

What is Knowledge Management?


Common Knowledge Management Definitions
(just a few of the many)
Discipline within an organization that ensures that the intellectual
capabilities of that organization are shared, maintained and
institutionalized
The process of systematically and actively managing and
leveraging the stores of knowledge in an organization
The way a company stores, organizes and accesses internal and
external information.
Refers to an entire integrated system for accumulation,
integration, manipulation, and access of data across multiple
organizations
(9),(10)

Knowledge Management

What is Knowledge Management?


Knowledge Management is the explicit
and systematic management of vital
knowledge - and its associated processes
of creation, organization, diffusion, use and
exploitation.

(9),(10)

Knowledge Management

Knowledge Hierarchy
Knowledge Management

Tacit Knowledge

Tacit
This type of
knowledge exists in
peoples heads, not
articulated or
documented

Explicit Knowledge

Knowledge

Information

Data

Explicit
This type of knowledge
can be
Processed by information
systems
Codified and recorded
Archived and protected

Knowledge Management

KM Significance
Knowledge assets have often become more important to companies than
financial and physical assets and are often the only way for a company to
distinguish itself from its competitor & gain competitive advantage

Lost knowledge given the enormous of baby boomers that will be changing jobs
or retiring in next few years cause productivity cost of an employee leaving 85%
of their base salary due to their replacements mistakes, lost knowledge and
lost skill( Beazley et al, 2002)

Relate to the concept of knowledge half-life, from which it is found that


knowledge reaches obsolescence, on average, in 500 days, but can be much
quicker in some areas
- Lost knowledge obviously has a cost, estimated that $115 billion sits idle in
lost knowledge affiliated with production technologies

(25)

- An astounding example of this is the loss of the original computer source


code, written in the 1950s, that spawned the Y2K software crisis, has cost
businesses worldwide an estimated $1 trillion (Petch, 1998)
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Knowledge Management

People and Systems


People
Knowledge Teams - multi-disciplinary, cross-functional
Learning Organization - personal/team/org development
Corporate Initiatives Chief Knowledge Officer
Systems
Knowledge Data-bases - experts, best practice
Knowledge Centers - hubs of knowledge
Technology Infrastructure - Intranets, Domino
Document Management
(9),(12)

Knowledge Management

Two Key Thrusts


Sharing existing knowledge
Knowing what you know

Knowledge for Innovation


Creating and Converting

(9)

Knowledge Management

Knowledge Cycle
Innovation Cycle

KM Cycle
Collect

Codify
Identify
Embed

Product/
Process

Diffuse

Create

Use/Exploit

Classify

Knowledge
Repository

Access

Organize/
Store

Share/
Disseminate

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Knowledge Management

Seven Levers
Customer Knowledge - the most vital knowledge
Knowledge in Products - smarts add value
Knowledge in People - but people walk
Knowledge in Processes - know-how when
needed
Organizational Memory - do we know what we
know?
Knowledge in Relationships - richness and depth
Knowledge Assets - intellectual capital

(9)

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Knowledge Management

Implementing and Maintaining KM

Maintaining KMS

KM

Why Implement KM?

Strategy for Implementing


ITs Role in Implementing

Whos Responsible?
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Knowledge Management

Why Implement KMS?

IBM, Oracle, Cisco


Measure intranet value at over $1 billion

BT, UK telecommunications company


Employee ideas have saved 100 million

Sodexhos SuperSleuth
Cash reward for employees submitting
sales leads
Led to over $90 million in sales volume

(20)

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Knowledge Management

Common Misconceptions
Smaller companies, who often claim that they cant afford
to undertake KM activities, are wrong on two counts!
1.Knowledge is just as important, if not more so, to a smaller company
trying to compete in the rapidly changing global marketplace. Smaller
companies must capture, assimilate, and capitalize on every
advantage they can find, including KNOWLEDGE
2.Smaller firms have the advantages from Culture and Organizational
structure in place that is much more conducive to implementing
knowledge management effort such as type of environment, which is
predicated more on social relationship, familiarity and trust between
employees

A little Knowledge that acts is worth more than much knowledge that is
idle.(Kahlil Gibran)
(25)

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Knowledge Management

Whos Responsible?
Everyone:

Managers/Supervisors
Leaders as knowledge champions

The Knowledgeable
Not a problem of knowing, but of access

End Users
Feedback
Psychological barriers
(13), (14)

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Knowledge Management

Role of IT in Implementation
The biggest contributor to this brilliant growth of the knowledge
management system is information technology.

Lee et al. also say, ...there are negative perspectives about


information technology.

According to a managing partner at a KM consultancy firm


based in New York, The biggest misconception that IT leaders
make is that knowledge management is about
technology...Usually people begin a KM project by focusing on
the technology...But the key is people...

(15),(16)

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Knowledge Management

Strategy for Implementing KM


The MeCTIP model

(19)

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Knowledge Management

Strategy for Implementing KM

Macro-environment
External Factors
Globalization
Technology
E-companies

(19)

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Knowledge Management

Strategy for Implementing KM

Organizational Climate
Structure
Formal Structures

Cross-functional project groups


Cross-discipline learning
groups

Informal Structures

Grapevine/Underground
Cliques

Strategy/Goals
Culture
The difference between, ...what is formally
agreed and what actually takes place.
(19)

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Knowledge Management

Strategy for Implementing KM

Technical Climate
Infrastructure
Response to change

Resistance to
change/Conflict
Listen to negative
feedback
Conflict leads to
improved ideas

(13),(19)

20

Knowledge Management

Strategy for Implementing KM

Technical
System
Standardization
Compatibility
Usability

(13),(19)

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Knowledge Management

Strategy for Implementing KM

Informational
Info fatigue
Infofamine
Infoglut
According to Lee et al,
...users do not know
how to utilize effectively
the vast pool of
information.

(16),(19)

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Knowledge Management

Strategy for Implementing KM

Personal
Knowledge roles
Motivation
Learning networks

(19)

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Knowledge Management

Maintaining KM Systems

Provide Adequate Access


Intranets
Classes

Psychological Barriers
Ook Lee study
103 questionnaires from Korean KMS users
93 respondents were reluctant to say that a knowledge
management piece was not valid

(17)

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Knowledge Management

Maintaining KM Systems

Use it or lose it
Cook compares KMS to draining battery

Share knowledge
Knowledge is individual power, not group power

Removing knowledge constipation


Crowded closet

(13)

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Knowledge Management

Maintaining KM Systems

Incentives
Financial
Big Idea
Pub Money

Organizational Sociology
Know your audience

Be flexible
No single recipe for success

(13)

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Knowledge Management

The Difference of Knowledge


Management in US and CHINA

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Knowledge Management

Cultural Factors Impacting knowledge Management

Internationalization creates a need to know


how peoples in different countries to apply
knowledge management.
People from the United States and China
have a distinctive prevailing decision style that
reflects differences in cultural values

(4)

28

Knowledge Management

Why they express happiness differently

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Knowledge Management

The difference of American and Chinese in personal character

American

Chinese

Extroverted, encouraged to express


and to show feelings

Introverted , not encouraged to show


emotions,

Emphasis is placed on the individual


and independence. Society is a
collection of individuals

Emphasis is placed on the society and


the role of the person in the social fabric

Rules and Regulations are written broad Rules and Regulations are written very
but what is written is enforced very
strictly but enforcement is selective
strictly

(2), (3)

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Knowledge Management

The different ways in deal with gift

Presents are
usually
opened in
front of the
giver

Presents
are usually
opened in
private

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Knowledge Management

The difference of U.S. and CHINA in Knowledge management

U.S.

CHINA

View of
knowledge

Explicit and measurable

Largely tacit and contextual

Key
assumption

Knowledge is mostly
objective and can be made
explicit

Knowledge includes both objective and


subjective element

Knowledge
management
role

Knowledge workers
Senior manager are responsible for
capture, codify , and share knowledge management
knowledge from experience

Communicati
on process

collection, distribution,
One-way flow of information (from
reuse, and measurement of superior to subordinate) and by
existing codified knowledge guanxi net
and information in whole
organize

(5)

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Knowledge Management

guanxi in China
Social ties -- interaction frequency, degree of
intimacy and trust
Its not what you know, its who you know.
Business guanxi (personal relationships in
Chinese market)
Government guanxi (personal relationships
with government officials in different levels
and bureaus).

(5)

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Knowledge Management

Could we combine
two styles of
knowledge into an
integral whole

34

Knowledge Management

(5)

In the international work group, people need to know


how to combine different knowledge into an integral
whole. To achieve this goal we should understand
the knowledge creation process

35

Knowledge Management

The knowledge creation process

(1)

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Knowledge Management

Knowledge Management in Practice

37

Knowledge Management

PricewaterhouseCoopers
PwC: The PricewaterhouseCoopers Law Firm & Law Department Service Group
The Worlds largest professional service organization:
Service and Help general counsel and law firm executive management solve
complex business problems
Measurably enhance their ability to build sustainable shareholder value
Manage Risk
Improve quality and performance by providing services based on quality and
integrity
PwC includes the member firms of PricewaterhouseCoopers International Ltd.,

(21)

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Knowledge Management

LRC: Legal Research Center

Helping corporate law departments and their outside counsel


reduce their research costs and efficiently manage their legal
knowledge for nearly 25 years
Remain the nations premier provider of outsourced legal
research, KM, and compliance e-training services
Culturally committed to operational excellence
Customer intimacy and product/service innovation

(21),(22)

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Knowledge Management

The Study

In 2003, Florida Legal Technology Institute Study


Reviewed the marriage between PwC and LRC,
catalog the advantages of KM in PwC law firms and
departments
KM Study with 348 legal professionals around the
world (law departments and outside law firms)

=
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Knowledge Management

PwC and LRC KM Study Results Announced

70% of law firm respondents and 63% of Law Dept. respondents reported
having KMS in place indicated that they use KMS either frequently or all
the time
The survey indicated that their KM program either meets or exceeds their
targeted ROI
85% of the law firms
78% of the law dept.
The Avg. budget to support KM initiative was reported at 4.7% of the total
legal spend.
Quality, speed and cost containment are what a majority of legal
professionals are seeking from their KM solution providers.
The most common standards to measure the value of KM programs are
productivity enhancement and cost reduction.

(21),(22)

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Knowledge Management

PwC and LRC KM Study Results Announced (cont.)

Legal professionals are increasingly cognizant of the value of KMS that


retrieve information from multiple sources and locations. 82% said they
would be more efficient if their KM solution could access legal knowledge
in multiple formats from multiple resources.
The majority of legal professionals surveyed believe that research
redundancy, the reduction of which is a key goal of KM, is caused by lack
of communication inside the firm or law dept., and by the lack of incentives
to motivate knowledge reuse and eliminate redundant research

With the ever increasing volume and types of information available, KM is


more critical than ever. This study provides compelling data on the value
and important of KMS. KM is an essential ingredient for efficient and
effective delivery and management of legal services. (Jonathan Bellis)
(21),(24)

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Knowledge Management

When Knowledge adds up to nothing


Charles Lucier, Chief Knowledge Officer at International management and technology consulting firm said up to 84% of all KM
programs fail.

A global bank spanning 70 countries abandoned their KMS before it was ever rolled out.
A European manufacturing company successfully implemented a KMS, but it was rarely used.
A pharmaceutical company implemented a KMS that could not be easily adapted to specific context of each work group

(21), (26)

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Knowledge Management

Why Knowledge Can add up to nothing -

Many companies find that their departments have different takes on what
the project means or what it is trying to achieve
Many KM program leaders are ignorant when it comes to the complexity
of these micro-political processes
Even though some firms are implementing KM programs with support
from senior management, it can still fail as a result of lack of support
Some organizations do not achieve adequate ROI from KM as they are
failing to measure effectively
Many companies professed to suffer from information overload and a
shortage of time with which to both share and utilize knowledge
Many firms rely too heavily on consultants who position themselves in
highly influential positions within the organization
Many initiatives fails as they only enjoy superficial support from the top
management

(21)

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Knowledge Management

Knowledge Management Success


Evidence shows that, despite the potential pitfalls and seemingly high failure
rate, companies are still willing to invest in KM. Why? Because there are big
benefits there for taking.
The results of several surveys met:
87% of European business directors believe they could enhance their
companys competitiveness with improved KM and 76% believe Building +
Sharing Knowledge is important for their company.
Study of 500 firms conducted by KPMG illustrated 80% of senior executives feel
that KM is strategic to their organization and 78% feel they have missed business
opportunities.
Hoffmann-Roche, the Swiss pharmaceutical firm, has estimated that it saves over
$1 million per day due to its KM activities
BP Amoco attributed $260 million in bottom-line savings to a KM program

(23)

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Knowledge Management

Knowledge Management Success (Cont.)

Energy firm Schlumberger Ltd. reported an estimated 668% ROI on a $72 million
investment in KM over a period of six years

Chevron Corporation estimates that it saved an initial $150 million, plus at least
another $20 million annually by instituting a best practices program

Teltech Communications, a firm that specializes in aiding companies to implement


knowledge management programs, reports that its clients enjoy an average ROI of
12:1 for their efforts

In a survey carried out by Information Week , IT executives said they considered


KM a strategic initiative of high importance, and KM spend is to climb at 62% of the
IT institutions surveyed

Hewlett-Packards knowledge efforts aimed at customer service have reduced


average call times by two-thirds and the cost per call has fallen by 50 percent

(21),(23),(25)

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Knowledge Management

Keys to successful KM
As is the case with many new practices in workplace:

Getting employees on board from day one and making sure they realize
exactly how KM program is to impact on their routines and bring benefits
for the organization as a whole is pivotal
Make sure KM becomes a fundamental aspect of the way you do business
Be sure your KM implementation is less about reporting and more about
sharing knowledge
Knowledge is a company asset, hidden, until the knowledge worker releases it.
The key to generating the best returns from your KM Program is to implement a
well-planned methodology and ensure that your organization facilitates this release
of information.
-Mike Bagshaw, Development Director at Trans4mation Training Ltd,

(24)

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Knowledge Management

Army Knowledge Management

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Knowledge Management

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Knowledge Management

Army Knowledge Management

It is the Armys goal to deliver critical capabilities to the


warfighter, and oversee the development of a knowledgebased workforce
LTC William Nelson
Deputy Director GA & CKO
(Governance, Acquisition and Chief Knowledge Office)
Army Office of CIO/G-6
(7)

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Knowledge Management

Army Knowledge Management


Development of Army IM/IT and KM
Coordination between Combatant Commands and
Joint Staff, components and agencies, etc
Serves as the focal point for management and
integration with IM/IT
Oversees the acquisition of IM/IT and KM
solutions

(7)

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Knowledge Management

KM is a Journey, not a destination.


(Warick Holder)

Knowledge resides in the users and not in the collection.


(Y. Maholtra)

Successful knowledge transfer involves neither computers nor


documents but rather interactions between people!!
(Mason & Mitroff; 1973)

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Knowledge Management

Summary

Key Concepts of KM
Explicit Knowledge
Tacit Knowledge

Implementation, Maintenance
China
KM cases, advantages and disadvantages
Army KM

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Knowledge Management

Questions

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Knowledge Management

Sources
(1) Communications of the ACM ,Volume 48, Number 4 (2005), Pages 73-76 ,Knowledge management in China, Glen R.
Burrows, Damon L. Drummond, Maris G. Martinsons
(2) KNOWLEDGE MANAGEMENT OF HIGH-TECH FIRMS
Chung-Ming Lau, Yuan Lu and Shige Makino;The Chinese University of Hong Kong
(3) Xiaohong Chen ;State Development Research Center, PRC ;Ryh-Song Yeh ,Peking University
SOURCE: http://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN020318.pdf
(4) Inkpen, A.C. 2000. Learning through joint ventures: A framework of knowledge acquisition. Journal of Management
Studies, 37: 1019-1043.
(5) Hoskisson, R.E., Eden, L., Lau, C. M., & Wright, M. 2000. Enterprise strategies in emerging economies. Academy of
Management Journal, 43: 249-267.
(6) Army Regulation 25-1 Army Information Management
(7) LTC William Nelson, Deputy Director GA&CKO, Office of Army G6, interviewed by phone by Dave Owens,
October 2007.
(8) Richard Sapio, CEO of Mutual Capital Alliance, interviewed in person by Dave Owens, 22 September 2007
(9) Skyrme, David J, Developing a Knowledge Strategy STRATEGY, January 1998,
http://www.skyrme.com/pubs/knwstrat.htm
(10) Corral, Sheila, Are We in the Knowledge Management Business? ARIADNE, February 1999,
http://ariadne.ac.uk/issue18/knowledgemgt/

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Knowledge Management

Sources
(11) KNOVA, 10 Principles for Knowledge Management Success, Gartner INC., April 2003
(12) Ferran-Urdaneta, Carlos, Organizational Structures for Knowledge Management, Boston University Systems
Research Center, 1999
(13) Cook, P. (1999). I heard it through the grapevine: making knowledge management work by learning to share
knowledge, skills and experience. Industrial and Commercial Training , 31 (3), 101-105.
(14) Gottschalk, P., & Holgersson, S. (2006). Stages of knowledge management technology in the value shop: the case
of police investigation performance. Expert Systems , 23 (4), 183-193.
(15) Kulkarni, U. R., Ravindran, S., & Freeze, R. (2006). A Knowledge Management Success Model: Theoretical
Development and Empirical Validation. Journal of Management Information Systems , 23 (3), 309-347.
(16) Lee, H.-S., Chae, Y.-I., & Suh, Y.-H. (2004). Knowledge Conversion and Practical Use with Information Technology in
Korean Companies. Total Quality Management , 15 (3), 279-294.
(17) Lee, O. (2006). Psychological Barriers to Maintaining Knowledge Management Systems. CyberPsychology &
Behavior , 9 (3), 367-368.
(18) Moffett, S., & McAdam, R. (2006). The Effects of Organizational Size on Knowledge Management Implementation:
Opportunities for Small Firms? Total Quality Management , 17 (2), 221-241.

Knowledge Management

Sources
(19) Moffett, S., McAdam, R., & Parkinson, S. (2003). Technology and people factors in knowledge management: an
empirical analysis. Total Quality Management , 14 (2), 215-224.
(20) Ward, T. (2007). Does Your Intranet Pay Its Way? SCM , 11 (2), 10.
(21) When knowledge adds up to nothing: Why knowledge management fails and what you can do about it, Journal
of Development and Learning in Organizations (2003), Vol. 17 Issue:1 Page: 32-35
(22) News & Legal Editors from Legal Research Center KM Study (2003) Legal Knowledge Management Improves
Quality and Speed of Service, Reduces Costs and Delivers High ROI, According to Landmark
PricewaterhouseCoopers, Business Wire, June 9, 2003.
(23) Braganza, A., Mollenkramer, G.J. (2002), Anatomy of a failed knowledge management initiative: lessons from
PharmaCorps experience, Knowledge and Process Management (UK), Vol. 9 No.1,.
(24) Storey, J., Barnett, E. (2000), Knowledge management initiatives: learning from failure Journal of Knowledge
Management, Vol.4 No.2, .
(25) Yeldon, Eugene F., Synrad INC, Albers, James A., Pacific Lutheran University, Journal of Knowledge Management
Practice, The Business Case for Knowledge Management, August 2004
(26) Chua, A., & Lam, W. (2005). Why KM projects fail: a multi-case analysis . Journal of Knowledge Management , 9 (3),
6-17.

Knowledge Management

Implementation