“Knowledge Management Systems for Enterprises”

Shalini Jain
MCA (6yrs), VII Sem
International Institute of Professional Studies
 Abstract

The concept of knowledge management is not new to the business world today. The enterprises today are
showing an increasing interest in knowledge management systems for facing the challenges posed by
rapidly changing business environment: the environment which is so vividly characterized by rapid
changes, thus making it almost impossible to deal with them based on age old ‘best known practices’. The
time has now come to keep updating one’s information systems and be innovative, for one must realize that
these are the best ways to stay and compete in the market.

Introduction

" The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled
high with difficulty, and we must rise to the occasion. As our case is new, so we
must think anew and act anew. "

-- Abraham Lincoln

In this paper, an attempt has been made to unleash the importance of developing and implementing a
knowledge management system for an enterprise so that the enterprise can capitalize on its human,
information and technical resources.

Knowledge management is much talked of topic in market today. Enterprises are realizing how important it
is to "know what they know" and make the maximum of this knowledge. After all, unless one reaps on the
prior knowledge, moving ahead would be a tedious and cumbersome job. And this in general holds true not
only for enterprises but for all organizations seeking success. Not surprisingly then, there has been a
phenomenal growth in the interest and activities pertaining to the leading topic of knowledge management.

The strategic view of knowledge management bases itself on the fact that market trends have changed
tremendously in the last decade. In the past, a lot of emphasis was laid upon the management of tangible
assets of the enterprise, the important knowledge assets were unfortunately ignored. Success in an
increasingly competitive marketplace, as is the case today, depends critically on the quality of knowledge
which organizations apply to their key business processes. For example the supply chain depends on
knowledge of diverse areas including raw materials, planning, manufacturing and distribution. Likewise
product development requires knowledge of consumer requirements, new science, new technology,
marketing etc.

Knowledge management is necessary for enterprises because what worked yesterday, for the product or
service sale amongst the consumers, may or may not work tomorrow. The same holds for assumptions
about the optimal organization structure, the control and coordination systems, the motivation and
incentive schemes, and so forth. To walk abreast of the dynamically changing needs of the business
environment, organizations need to continuously assess their internal theories of business for ongoing
effectiveness. The marketplace is increasingly competitive and the rate of innovation is rising, so that
knowledge must evolve and be assimilated at an ever faster rate. There is a need to replace the informal
knowledge management with formal methods. Competition suggests a clear need for limiting the number
of people who hold the valued knowledge. Moreover, knowledge takes time to experience and acquire.
Employees have less and less time for this. There are trends for employees to retire earlier and for
increasing mobility, leading to loss of knowledge. A change in strategic direction may result in the loss of
knowledge in a specific area. A subsequent reversal in policy may then lead to a renewed requirement for
this knowledge, but the employees with that knowledge may no longer be there.

While speaking of the knowledge used in an organization, there are two key areas where the whole matter
concentrates. They are information and the human asset. The knowledge resides in many different places
such as: databases, knowledge bases, filing cabinets and peoples' heads and are distributed right across the
enterprise. The human asset comprises of all the skill, competence and acquired knowledge of humans.
And as is obvious this knowledge is hard to keep track of because documenting and communicating this
knowledge effectively is a difficult job. Quite interestingly though, as we all realize, it is the human
knowledge asset which is all so important for an organization. Information covers the experience and
intellectual achievements of the humans.

Knowledge Management
Knowledge assets are the knowledge regarding markets, products, technologies and organizations, that a
business owns or needs to own and which enable its business processes to generate profits, add value, etc.

Knowledge management is not only about managing these knowledge assets but managing the processes
that act upon the assets. These processes include: developing knowledge; preserving knowledge; using
knowledge, and sharing knowledge. So, knowledge management involves the identification and analysis of
available and required knowledge assets and knowledge asset related processes, and the subsequent
planning and control of actions to develop both the assets and the processes so as to fulfil organizational
objectives.

We can thus arrive at the following appropriate definition for knowledge management:

"Knowledge management is the explicit and systematic management of vital knowledge and its associated
processes of creating, gathering, organizing, diffusion, use and exploitation. It requires turning personal
knowledge into corporate knowledge that can be widely shared throughout an organization and
appropriately applied."

Enterprises generate increasing values by synthesizing knowledge capital and technology and using it
effectively. A knowledge intensive enterprise is an innovative one. The market values those enterprises
with winning performances which are innovative in responding to the dynamics of the market, higher than
their book values. And so, the profit is apparent in enterprise knowledge management. Each enterprise
determines the best possible, knowledge management system, based on its specific and strategic needs.
Knowledge Assets: Identification and Assessment

To successfully align KMS with the policies of the enterprise, an ongoing identification and assessment of
the enterprises’ knowledge assets is essential. This can be best achieved by answering the following for
identifying what knowledge assets a enterprise possesses:
♦ Where is the knowledge asset?
♦ What does it contain?
♦ What is its use?
♦ What form is it in?
♦ How accessible is it?

Acquisition of Knowledge

Knowledge acquisition should not be confused with information acquisition. Knowledge acquisition is the
process of development and creation of insights, skills, and relationships. For example, when an
experienced stockbroker can see the trend on a computer monitor and tell which way the market is headed
– that is an example of intuition or acquired knowledge.
It being important, vital, for an enterprise to identify its best resources and put them to use, knowledge
acquisition and development demand attention. The best bet of any enterprise is the human capital. The
knowledge that resides in minds, and has been acquired by analyzing and responding to the dynamics of
the business world today is critical to knowledge accumulation and development. But enterprises realize
that the best knowledge sources might not always be the ones inside the organization. Deciding on the front
of knowledge acquisition requires to think most argumentatively on the following:

♦ Synthesizing knowledge within the organization through for example, Research and Development.

♦ Collaborating through knowledge alliances with other enterprises, government R&D, or academia.

♦ Acquiring promising people and conducting human development programs.

♦ Acquiring knowledge from the people who have it.

♦ Acquiring knowledge from the market, by, say market surveys and the likes.

Knowledge Utilization

Having acquired and developed knowledge, the next important step of a KMS is to evaluate and store this
knowledge in an organized and apt manner. Storage of valid or relevant knowledge is important for a
KMS.
Knowledge utilization is inherently a collaborative process, and neither within-firm nor cross-firm
utilization and transfer of knowledge can succeed without effectively supporting collaboration. This focus
on collaboration and collaborating support is perhaps one of the primary distinguishing factors that
differentiate knowledge support system from information systems. Knowledge utilization come in to the
picture when learning is integrated into the organization. Whatever is broadly available throughout the
enterprise can be generalized and applied, at least in part to new situations.
This process of should ensure:
♦ An easy and fast access of information.
♦ A full record of the knowledge gained from enterprises’ activities (including patents).
♦ Knowledge gained from outsourcing projects is tracked.
♦ A record of all problems that an enterprise must deal with to improve its performance.

The Survival Imperative

The obvious question that comes to mind is why knowledge management ? and the answer is : survival. In
the knowledge based economy, survival depends on the best possible response to a multitude of challenges.
Managing knowledge means adding or creating value by actively leveraging know-how, judgement,
intuition, and experience resident within and outside the enterprise with a focus on:

♦ Generating new knowledge: creating new knowledge that provides process, competence and a hard-to-
copy competitive advantage to your enterprise.

♦ Using accessible knowledge in making decisions: Making decisions based on knowledge that already
exists in the enterprise and bringing existing, but often unreachable knowledge to bear upon new decisions.

♦ Embedding it in products, services, and processes: Delivering value to the customer by integrating
knowledge in products, services and processes. This will result in higher quality outcomes at a lower cost
than what your competitors incur.

♦ Facilitating knowledge growth: This is best done through rewards, incentives, a knowledge-sharing
culture, and recognition.

♦ Transferring. existing knowledge: Transferring. existing knowledge into other parts, departments and
locations of the enterprise.

♦ Integrating competitive intelligence: Accessing valuable knowledge from competitors and external
sources.

Is it time for your enterprise to implement a KMS?

A number of facilitating factors are required for any knowledge management effort to succeed. The
enterprises that have successfully deployed knowledge management share seven characteristics that help to
determine if the enterprise is ready for it. These factors are:
♦ Scanning imperative: Three simple questions can help one determine if a scanning imperative exists
in your enterprise:

1. Does the enterprise truly understands the environment in which it functions?

2. Does it gather information about practices and conditions outside the organization?
3. Is there awareness about how the enterprise’s internal operations compare with those of the
competitors?

♦ Shared perception of performance gaps: Is there a shared and relatively well agreed upon perception
of things are in the enterprise and hoe they actually need to be. There thus, needs to be a fairly consensus
on issues relating to performance gaps. Recognizing these gaps also means that initially the enterprise can
focus knowledge management on addressing issues where the benefits could be most compelling.

♦ Metrics: There should be a considerable focus on how things are measured. Is everything measured
solely on the basis of financial outcomes? If so, the enterprise needs to incorporate a better set of metrics
that measures knowledge assets also. Without an explicitly recognized set of measures how can the
enterprise attribute any part of improved performance to the enterprise’s knowledge. Although there might
be no perfect measure, there needs to be some way of measuring the knowledge assets and the gains that
the enterprise realizes by leveraging them.

♦ Corporate culture: Knowledge management is at least as much about a enterprise’s culture as it is

about underlying technology. Thus, the significance of nurturing a conducive a corporate culture before
attempting to leverage knowledge.
♦ Knowledge champions; New ideas and methods suggested by employees at all levels are significant
due to the highly cross functional nature of corporate knowledge, which needs champions from different
functional areas. The underlying element of a knowledge management system is that it facilitates creation,
capture, reuse, maintenance, and transfer of knowledge.

♦ Begin with what is known: Before the enterprise decides to become something new it should evaluate
what it is currently. Rather than creating “new knowledge” in an attempt to breathe new life into the
enterprises’ competitiveness, it is better for the organization to accept its current data and information
assets and begin by leveraging those first.