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The Importance Of Knowledge Management For Your Business

Knowledge, as they say, is power. It is also one of your businesss most vital forms
of capital the bedrock on which innovation is founded, and the fuel that drives
growth and expansion.

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Making your businesss knowledge work for you

Once they have been in business for a number of years, most companies will find
that they have accumulated a vast repository of information and expertise.
Knowledge management is a discipline that focuses on making the most of this
knowledge, making it available and accessible to the employees that need it, and
drawing on skills that already exist within the organisation, rather than trying to
reacquire them through superfluous training or recruitment.

How to avoid making the same mistakes twice

Experienced knowledge management consultants take the view that an effective


knowledge management strategy within a company should enable employees, their
teams, and the organisation as a whole to achieve their objectives by systematically
creating, sharing and implementing knowledge. Simply put, rather than expecting
each employee or project to learn a process from scratch, a capable knowledge
management consultant will help to create an environment where team members
can benefit from mistakes made and lessons learned in the past. This ensures that
occasional challenges and failures in a businesss evolution are turned into
opportunities, and help to prevent future slip-ups.

An emerging discipline

The concept of knowledge management is a relatively new one, but already the
discipline has been consolidated with named posts in the hierarchy of many major
companies, and accepted as an academic discipline in its own right not to mention
the large number of specialist knowledge management consultants who have
sprung up over the past few years.

Depending on the approach of the practitioner and the requirements of the


organisation, there are various perspectives from which knowledge management
may be approached.

Techno-centric: Consultants working in this field will focus on the most effective
technological solutions to enhance knowledge creation, capture and sharing.
Organisational: Taking a broader perspective, an organisational knowledge
management consultant will investigate ways in which an organisation can be
changed to facilitate knowledge processes.
Ecological: This more detailed and abstract approach takes into account a wide
range of variables, considering a knowledge-based organisation a complex adaptive
system similar to a natural ecosystem.
The means and methods of knowledge management can be a complex and
unwieldy field to navigate. Engaging an experienced consultant can help
organisations not only to ensure they are adopting the correct approach towards
knowledge management, but also to follow the knowledge management strategy
most likely to reap results, and help their company build on past successes to thrive
in the future.

IMPORTANCE OF KNOWLEDGE TO A GROWING BUSINESS

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All businesses have access to an extensive pool of knowledge - whether this is their
understanding of customers' needs and the business environment or the skills and
experience of staff.

The way a business gathers, shares and exploits this knowledge can be central to its
ability to develop successfully. This doesn't just apply to huge multinational
companies. Knowledge management can benefit everyone from a local newsstand
to a manufacturing firm.

This guide explains the basic sources of knowledge available to your business, how
you can best harness and exploit this information and how to create a knowledge
strategy for your business.

What is knowledge in a business?


Basic sources of knowledge
Exploiting your knowledge
Make knowledge central to your business
Sharing knowledge across your business
Create a knowledge strategy for your business
Using information technology to gain and manage knowledge
WHAT IS KNOWLEDGE IN A BUSINESS?
Using knowledge in your business isn't necessarily about thinking up clever new
products and services, or devising ingenious new ways of selling them. It's much
more straightforward.

Useful and important knowledge already exists in your business. It can be found in:

the experience of your employees


the designs and processes for your goods and services
your files of documents (whether held digitally, on paper or both)
your plans for future activities, such as ideas for new products or services
The challenge is harnessing this knowledge in a coherent and productive way.

Existing forms of knowledge

You've probably done market research into the need for your business to exist in the
first place. If nobody wanted what you're selling, you wouldn't be trading. You can
tailor this market knowledge to target particular customers with specific types of
product or service.
Your files of documents from and about customers and suppliers hold a wealth of
information which can be invaluable both in developing new products or services
and improving existing ones.
Your employees are likely to have skills and experience that you can use as an
asset. Having staff who are knowledgeable can be invaluable in setting you apart
from competitors. You should make sure that your employees' knowledge and skills
are passed on to their colleagues and successors wherever possible, e.g. through
brainstorming sessions, training courses and documentation. See the page in this
guide: create a knowledge strategy for your business.
Your understanding of what customers want, combined with your employees' knowhow, can be regarded as your knowledge base.

BASIC SOURCES OF KNOWLEDGE


Your sources of business knowledge could include:

EXPLOITING YOUR KNOWLEDGE

Consider the measurable benefits of capturing and using knowledge more


effectively. The following are all possible outcomes:

An improvement in the goods or services you offer and the processes that you use
to sell them. For example, identifying market trends before they happen might
enable you to offer products and services to customers before your competitors.
Increased customer satisfaction because you have a greater understanding of their
requirements through feedback from customer communications.
An increase in the quality of your suppliers, resulting from better awareness of what
customers want and what your staff require.
Improved staff productivity, because employees are able to benefit from colleagues'
knowledge and expertise to find out the best way to get things done. They'll also
feel more appreciated in a business where their ideas are listened to.
Increased business efficiency, by making better use of in-house expertise.
Better recruitment and staffing policies. For instance, if you've increased knowledge
of what your customers are looking for, you're better able to find the right staff to
serve them.
The ability to sell or license your knowledge to others. You may be able to use your
knowledge and expertise in an advisory or consultancy capacity. In order to do so,
though, make sure that you protect your intellectual property.
MAKE KNOWLEDGE CENTRAL TO YOUR BUSINESS
In order to manage the collection and exploitation of knowledge in your business,
you should try to build a culture in which knowledge is valued across your business.

One way to do this might be to offer incentives to staff who supply useful market
news or suggest ways customers can be better served. You can use these
knowledge management practices throughout your organisation to build better
processes.

As part of your knowledge management, you should also make sure that any
intellectual property that your business holds is protected. This means that you
have the right to stop competitors from copying it - and also allows you to profit by
licensing your business' knowledge.

Protecting and exploiting your knowledge base will be more effective if you develop
efficient systems for storing and retrieving information. Your files - whether stored
digitally or on paper - contain knowledge that you can use to make your products,
services, systems and processes better and more customer-focused.

Keep knowledge confidential. Your employment policies play a central role in this.
For example, you might get staff to sign non-disclosure agreements (also known as
confidentiality agreements) when they join the business as this ensures that they
understand the importance of confidentiality from day one. Employment contracts
can be written to reasonably limit your employees' freedom to quit and work
immediately for one of your rivals (restraint of trade clauses) or set up a competing
business to yours in the vicinity (restrictive covenants).

SHARING KNOWLEDGE ACROSS YOUR BUSINESS


It's essential to avoid important knowledge or skills being held by only a few people,
because if they leave or retire that expertise could be lost to your business. If you
have efficient ways of sharing knowledge across the business, it will be more widely
used and its value and effectiveness are likely to be maximised.

Knowledge sharing

Consider the best ways of sharing new ideas and information with your staff. You
may already have regular meetings when you can brief employees and ask them to
share ideas and best practice.

You could consider holding innovation workshops or brainstorming sessions at which


staff are given the freedom and encouragement to think of ways in which the
business could improve.

It can also be a good idea to create a knowledge bank containing useful information
and instructions on how to carry out key tasks. Putting this on an intranet is ideal as
it will encourage staff to post news or suggestions.

Knowledge management

Technology alone isn't the answer to sharing knowledge - it has to be managed


carefully so that information is channelled properly. You may decide to appoint a
senior manager as knowledge champion for your business. See the page in this
guide on how to make knowledge central to your business.

Incentives and training

Remember that offering staff incentives to come up with suggestions for how the
business can be improved is often an effective way of getting them to use and share
knowledge.

Don't forget the importance of training in spreading key knowledge, skills and best
practice across your business.

CREATE A KNOWLEDGE STRATEGY FOR YOUR BUSINESS


If you want to get the most from your business' knowledge, you need to take a
strategic approach to discovering, collating and sharing it. This is done via a
knowledge strategy - a set of written guidelines to be applied across the business.

If your strategy is to be effective, you must make sure your senior managers are
committed to it and are fully aware of the benefits it can bring. Discuss with them
the best ways of collecting and using knowledge.

You may decide to appoint a senior manager as knowledge champion for your
business. For more information see the page in this guide on how to make
knowledge central to your business.

When you're drawing up the strategy you need to:

consider how effective your business currently is at using its knowledge

analyse your internal processes for gathering and sharing information - are there
successful ways of generating ideas and do staff have a good grasp of what's
happening?
make sure that knowledge management, acquisition and distribution is a continuing
process, so that it becomes central to your business' strategy
You should also identify the value of knowledge to your business. Think of ways you
could exploit your knowledge for financial gain - perhaps by gaining a larger market
share, developing new products, or selling or licensing your protected intellectual
property to others. Ensure this fits in with your overall business plan.

USING INFORMATION TECHNOLOGY TO GAIN AND MANAGE KNOWLEDGE


Information technology offers powerful tools to help you gain and make the best use
of knowledge. Some of the systems can be complex to set up and time-consuming
to maintain. You need to choose systems that fit with your business and that will
improve it without becoming a burden. You may find it useful to consult an IT
specialist.

Types of information technology

Databases organise information so it can be easily accessed, managed and


updated. For instance, you might have a database of customers containing their
contact information, their orders and preferences.
A data warehouse is a central storage area you might use if you have a variety of
business systems, or a range of information in different digital formats. Many
businesses now use digital asset management to store, manage and retrieve
information, and this can be particularly helpful if you sell online. It is, however, a
complex area technically and in task management, and you may wish to seek
specialist advice from an IT consultant.
Data mining is a process in which all the data you collect is sorted to determine
patterns. For instance, it can tell you which products are most popular and whether
one type of customer is likely to buy a particular item.
Reporting and querying tools let you create reports interpreting data in a particular
way. How many of your sales have been handled by one particular employee, for
instance?

Business intelligence portals are websites that bring together all sorts of potentially
useful information, such as legal issues or details of new research.
The Internet and search engines - these can be a powerful source of knowledge,
although be certain to check the credibility of your information source. Internet
newsgroups can be specific sources of business information, but check the authors'
other postings before deciding how to view their opinions and claimed facts.
An intranet is a secure internal network for the sole use of your business.
An extranet is similar to an intranet but can be extended to customers and
suppliers.
Customer relationship management software helps you build up a profile of your
customer database and enables you to target them through e-mail, telephone or
postal marketing campaigns.
Call-centre systems enable you to serve large numbers of customers if you sell by
telephone.
Website log-file analysis helps you to analyse how customers use your website so
you can improve its effectiveness.
Systems to analyse and file customer letters, suggestions, emails, and call centre
responses, which will enable you to spot trends, improve customer service and
develop new products, services and systems.
Original document, Importance of knowledge to a growing business, Crown
copyright 2009
Source: Business Link UK (now GOV.UK/Business)
Adapted for Qubec by Info entrepreneurs

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Ever since Adam and Eve ate from the tree of knowledge, mankind has been on a
perpetual quest to gain as much of it as possible. That thirst for knowledge has
resulted in explosion of information that continues to grow exponentially every day.

Consider the following quotes from business leaders regarding this phenomenon:

"There was 5 exabytes of information created between the dawn of civilization


through 2003," said Google CEO Eric Schmidt, "but that much information is now
created every 2 days, and the pace is increasing."

Susan Hauser, corporate vice president of Microsofts Enterprise and Partner Group,
said, "The world now holds twice as many bytes of data as there are liters of water
in all its oceans."

According to science writer David Derbyshire, "Scientists have worked out exactly
how much data is sent to a typical person in the course of a year - the equivalent of
every person in the world reading 174 newspapers every single day."

Social media is a large contributor to this data explosion. Facebook's one billion
users share 219 billion photos every day. Twitter users send out 400 million tweets
per day. 72 hours of video are uploaded to YouTube every minute. And, in 2011, 4.7
billion Google searches were conducted every day.

With this tsunami of information pummeling the shores of the Internet daily, there
has to be a way to make knowledge more manageable, accessible and organized.
That's where a discipline called Knowledge Management (KM) plays an important
role.

What is Knowledge Management?

Wikipedia defines knowledge management as "the process of capturing, developing,


sharing, and effectively using organizational knowledge."

Focused on processes, it's simply a way to make the best use of knowledge.

According to IT resource site SearchDomino, from a business standpoint it is a


concept in which an enterprise "consciously and comprehensively gathers,
organizes, shares and analyzes its knowledge in terms of resources, documents and
people skills."

The goal of knowledge management is to provide managers with the ability to


organize and locate relevant content and the expertise required to address specific
business tasks and projects.

What is Knowledge?

To better understand knowledge management requires that we first define what is


meant by the term "knowledge."

It is the result of a process that begins with data, which is a specific fact or figure
that lacks context. Data organized to provide more context becomes information.
Knowledge is the ability to take action based on that information.

Why Knowledge Management is Important

From a business perspective, knowledge management is important for several


reasons, some of which correlate to a company's bottom line and some of which is
more difficult to quantify. In order to gain the most value from a company's
intellectual assets, knowledge must be shared and serve as the foundation for
collaboration.

This may explain the growth of enterprise social networks like those we've reviewed
over the past few weeks. ESNs help break down corporate silos and make access to
resources - files and people - easier and faster.

But collaboration is not an end in itself. For KM to have the greatest benefit, such
collaboration must lead to improved decision making, better customer service, a
boost in revenues, enhanced employee retention, streamlined operations and
reduced costs that result from an elimination of redundant or unnecessary process.

Keys to Knowledge Management Implementation

The implementation of a technology tool does not, in and of itself, necessarily lead
to greater knowledge management. For that to occur, KM must be approached more
strategically.

An Oracle white paper - Getting Knowledge Management Right (PDF) - outlines


several steps that should first be considered, three of which apply to internal
corporate communications.

1. Start with a clear definition.

Set realistic, precisely defined goals and objectives for the initiative, says Oracle.
Start with a phased approach that enables knowledge management to be fine-tuned
before wider application.

2. Foster collaborative knowledge creation.

Embrace social networking in the form of ESNs as a part of a knowledge


management strategy, This will enable rapid develop of useful content at a lower
cost.

3. Think globally.

Organizations that start small should not limit their thinking about the uses and
value of knowledge management to just one business division or geographic
location. It can have broad advantages across the enterprise and should be treated
as a corporate-wide initiative.

Don't expect this to happen overnight. It may take time for organizations to adapt to
a more open, collaborative culture. Find some people within the company who can
champion the project and rally everyone's support. You will also need the blessing of
management to free up necessary resources.

The key is to be persistent and keep your "nose to the grindstone." Over time, small
steps should lead to bigger gains.

Conclusion

In a world where knowledge increases exponentially daily, organizations cannot


afford the luxury of operating without some way to manage its growth. Technology,
while a useful tool, is insufficient to bring about success. A strategic approach
coupled with a patient attitude are also required.

The upside: companies that do take the time to invest in knowledge management
will set themselves on a course to a more profitable future.
http://www.bizzuka.com/company-blog/why-knowledge-management-is-importantto-your-companys-success
http://www.infoentrepreneurs.org/en/guides/importance-of-knowledge-to-a-growingbusiness/