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Impact that knowledge Management has on the success of a business and how this can be implemented.

Katlego Marriet Sejamoholo


Knowledge Management - Department of Informatics Student No: 212105538, Contact No: 0828538222, Email: Sejamoholok@gmail.com

Abstract
The purpose for this paper is to investigate what knowledge management (KM) is and how it impacts the success of a business. I want to explore how knowledge management has improved businesses in companies that have implemented it. For an organization to be deemed as a competitive organization, it must be able to establish, confine, accumulate, split and leverage not only data and information but also the knowledge of the organization. How is this to be done if the crux of the information needed for decision making process only exists in the minds of employees? Do companies understand how vital it is to know what they know and are they capitalizing fully on this? I will look into what Knowledge Management is and how wills an implementation of Knowledge Management System impact a variety of companies. I plan to do this research through consultation with different groups of people within 2 companies. My study will be done by studying and interviewing people from an IT department from a small company (max 20 employees in the department) specializing in software development and a group of people from an organization that employees more than 1500 employees and has an IT department that consists of 70 employees, this organizations core business is finance and it has numerous departments that support the core business. Key words: Knowledge, Knowledge Management, Knowledge Management Systems, Knowledge Transfer.

Introduction
According to Redman, T. C. (1998) creating awareness of a problem and its impact is a critical first step towards the resolution of the problem. That which doesnt get measured doesnt get managed. Businessdictionary.com (2012) defines Impact as a measure of tangible and intangible consequences of one things or an entitys action or influence upon another. Andre Boudreau (2012) defines Knowledge as Human faculty resulting from interpreted information; understanding that germinates from combination of data, information,

experience, and individual interpretation. Variously defined as, Things that are held to be true in a given context and that drive us to action if there were no impediments". Businessdictionary.com (2012) defines Knowledge management as Strategies and processes designed to identify, capture, structure, value, leverage, and share an organization's intellectual assets to enhance its performance and competitiveness. It is based on two critical activities: (1) capture and documentation of individual explicit and tacit knowledge, and (2) its dissemination within the organization. Anon, Workplace Age Management (2010-2012) Information and knowledge are cooperate assets. The reason they are deemed corporate asset is because there is an increase in competitive pressure and businesses need strategies, policies and tools to effectively manage these assets. Businesses, both small sized and large are now realizing they need to develop an effective knowledge strategy and provide employees with best available knowledge to support the decision making process. The crux of this research will be to assess the consequences that implementing strategies and policies to manage the organizations tacit and explicit have in the overall success of the organization. Most organizations are not aware of what they know and thus end up reinventing the wheel and this is both costly in time and money. Numerous organizations even end up hiring external services to perform tasks that they think cannot be performed internally whereas they have the ability and man power to do this. An example would be Company A which is a large organization that had their website implemented by external vendors whiles the companys internal IT department has the skills and human capital to revamp the website internally. Company A spent and undisclosed sum of money in the effort to revamp the site and is not happy with the result. Going through with this research will help organizations like Company A to avoid such costly exercises because if they knew what they know organization wide they might have not gone through this costly exercise that might have to be resolved by the internal IT department or by another software vendor. This research is intended for any organization, for any decision makers within organizations and business owners that want to develop better techniques in managing their knowledge base which can be their greatest asset if used wisely. The product of this study will be Company Z which is a big organization specializing in software development and a Company A which is a big organization specializing in finance and has other small department that support the core business. The study will be conducted through consultation will employees using interviews, surveys and general observation. The results will be analyzed by studying business processes that are currently in place and putting them through KMS processes that suit the current processes and observing the changes to see the Impact that knowledge management systems on the 2 companies. Will the processes work for both diverse organizations? What benefits would the changes bring to the organization? What are the challenges to be expected and how can they be mitigated? The output of all this will be in form of a research document.

What is Knowledge management?

Knowledge management has been studied by numerous writers from different professions. There is an urge to manage this knowledge, yet it is still very difficult to come to a consensus on how to define it. An observation was made by Neil Fleming (2012) as a basis of thought relating to the following diagram.

A collection of data is not information. A collection of information is not knowledge. A collection of knowledge is not wisdom. A collection of wisdom is not truth.

He turns to outline this idea that information, knowledge, and wisdom are not just mere collections. They represent more than was we perceive them to represent, they have a synergy of their own. Neil Fleming (2012) Data is not Information. It is just a meaningless point in space and time with not much reference to space and time. He says its like an event out of context. With the notion of data being out of context, it has no meaningful relation to anything. Pieces of data may represent information but wether or not it is information depends entirely on the understanding of the person perceiving the data. I thus ascertain that it depends on how experienced the person analyzing the data is for them to find data to be information. Neil futher indicates that a collection of data is not information. This simply implies that a collection of data for which there is no relation between other pieces of data is in fact not information. Information can then be said to be an understanding between data it doesnt still tell us why data is data. Information is just an understanding of the relationships between data and data or between data and information. Neil also indicates that knowledge is not wisdom. He introduces pattern in the jigs of things. He indicates that beyond relation and relationships there is pattern. Pattern is said to be a relation of relations. It is said to embody both consistency and completeness for relations which to an extend create their own context. Pattern of information has the potential to represent knowledge but it only becomes knowledge when one is able to realize and understand the patterns and their implications. Neil further more indicates that Wisdom arises when one understands the foundational principles responsible for the patterns representing knowledge being what they are. And wisdom, even more so than knowledge, tends to create its own context. These foundational principles are universal and completely context independent. Neil further makes the following associations:

Information relates to description, definition, or perspective (what, who, when, where). Knowledge comprises strategy, practice, method, or approach (how).

Wisdom embodies principle, insight, moral, or archetype (why). According to Wikipedia, (2010) Knowledge management (KM) comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences. Such insights and experiences comprise knowledge, either embodied in individuals or embedded in organizations as processes or practices. Denham Grey of Grey Matter Inc (2010) offers the following views on knowledge management: Knowledge management is an audit of intellectual assets that highlights unique sources, critical functions and potential bottlenecks which hinder knowledge flows to the point of use. It protects intellectual assets from decay, seeks opportunities to enhance decisions, services and products through adding intelligence, increasing value and providing flexibility. Knowledge management complements and enhances other organizational initiatives such as total quality management (TQM), business process reengineering (BPR) and organizational learning, providing a new and urgent focus to sustain competitive position.

Another classification of knowledge is tacit knowledge and explicit knowledge. Tacit knowledge refers to informal knowledge that is the cumulative store of experiences, insights, expertise, know-how, trade secrets, understanding and learning. It is also referred as embedded knowledge and is unstructured and intangible and thus hard to codify. Explicit knowledge also known as formal knowledge refers to the policies, procedural guides, reports, strategies etc that can be of the enterprise that has been codified and can be distributed to others without interpersonal interactions.

The importance of Managing Knowledge


Now that the outline of what knowledge has been touched on, I would like to explore what the need to manage knowledge really is. Managing Knowledge gives organization so much more and could be that one issue that would determine if they make the cut or not in terms of the following Competitive advantage Transforming organization to new levels of o effectiveness, o efficiency, and o Scope of operation. o Continually discovering what an organization knows which can be explicit knowledge.

The ability of an organization to stay current and relevant requires a core competence in knowledge management. A study conducted by Rebecca O Barclay and Phillip C. Murray of knowledge Praxis (2012) Knowledge and information have become the medium in which business problems occur. As a result, managing knowledge represents the primary opportunity for achieving

substantial savings, significant improvements in human performance, and competitive advantage. Its not just a Fortune 500 business problem. Small companies need formal approaches to knowledge management even more, because they dont have the market leverage, inertia, and resources that big companies do. They have to be much more flexible, more responsive, and more "right" (make better decisions) because even small mistakes can be fatal to them.

Why should you apply Knowledge Management?


According to The Knowledge Management Forum and Brian D. Newman (2002)To serve customers well and remain in business companies must: reduce their cycle times, operate with minimum fixed assets and overhead (people, inventory and facilities), shorten product development time, improve customer service, empower employees, innovate and deliver high quality products, enhance flexibility and adaption, capture information, create knowledge, share and learn. None of this is possible without a continual focus on the creation, updating, availability, quality and use of knowledge by all employees and teams, at work and in the marketplace. Knowledge management enables businesses to leverage the collective knowledge among members of the company and also allows the business to sustain competitive advantage. The main component of knowledge management is to provide access to stored knowledge components to improve decision making and to facilitate knowledge transfer and acquisition by the users. Knowledge management is important because it aids manages at DSS level with abilities to make better and more informed decision by providing adequate tools to: Increase related information access Facilitate group effort & knowledge transfer making sure that the tacit organizational knowledge is kept within the organization rise above organizational & geographical limitations cut down succession time

This will result in the organization: Lowering expenditure in terms of running the organization in the long run Aid in providing high quality products, decisions and further recommendations improved productivity More time analyzing vs. data collection

The significance of knowledge management thus relates to how effective knowledge has been managed in the past and how that experience is helping the people in the organization in dealing with current matters and because it has been done by someone in the organization before then we can effectively deal with these issues and look forward to a better future. If there is no urgency or drive to have the know-how to manage knowledge then every situation will be dealt with based on what the individual or team has experience of but if Knowledge management processes and strategies are put in place in an organization then situations will

be dealt with better by taking into consideration what has been learned in the past and how were current situations dealt with before.

Tools used to manage knowledge How has this been done?


Strategies that are used for knowledge management are 2 and they are very different. One strategy is centered in computer hardware and in this strategy knowledge is codified carefully and kept in a database allowing it to be easily accessible to anyone in the organization. This strategy is called codification. The second strategy used is closely tied to the person who developed it and its shared through direct individual contact like Mentors passing information to their mentees. Knowledge management can be implemented in various ways and I am going to focus on the ones below: Knowledge Transfer Knowledge Management Systems

According to Wikipedia (2012) Knowledge transfer in the fields of organizational development and organizational learning is the practical problem of transferring knowledge from one part of the organization to another (or all other) part(s) of the organization. Like knowledge management, knowledge transfer seeks to organize, create, capture or distribute knowledge and ensure its availability for future users. It is considered to be more than just a communication problem. If it were merely that, then a memorandum, an e-mail or a meeting would accomplish the knowledge transfer. Knowledge transfer is more complex because (1) knowledge resides in organizational members, tools, tasks, and their sub networks and (2) much knowledge in organizations is tacit or hard to articulate. The subject has been taken up under the title of knowledge management since the 1990s. Knowledge transfer can be implemented by conducting formal workshops where you will be able to get together the organizations knowledge holders or experts and motivating and allowing them to share insight on their areas of expertise. Designing this sharing mechanism to facilitate this transfer will aid the organization in making sure that all members are equally skilled and we all learn from each others experiences. According to Wikipedia (2012) Knowledge Management System (KM System) refers to a (generally generated via or through to an IT based program/department or section) system for managing knowledge in organizations for supporting creation, capture, storage and dissemination of information. It can comprise a part (neither necessary nor sufficient) of a Knowledge Management initiative.

The reason behind having a Knowledge Management system is to allow employees to readily have access to the organizations information, policies and solutions where possible. An example by Digimind (2012) a typical claim justifying the creation of a KM system might run something like this: an engineer could know the metallurgical composition of an alloy that reduces sound in gear systems. Sharing this information organization wide can lead to more effective engine design and it could also lead to ideas for new or improved equipment. Many organization use Information Technology as a basis for managing their knowledge. They use tools like Intranets, specialized department portal and blogs to facilitate knowledge transfer and management. They not only use Information technology tool that are just computer based, they also use tools like Video conferencing in transmitting tacit knowledge as it is in crude terms. Recording tacit knowledge and then storing it away as reference can be of a great advantage as videos are a bit more interpersonal and can be viewed at any given time especially when paper based documentation is not easily understandable . A typical claim to illustrate how video conferencing and using video recordings as a form of knowledge transfer can be creating start up videos for IT department to use for induction for junior software developers where you could tackle different aspects of writing code as per the departments coding standards in a video that can be places in the knowledge server of the departments portal thus making it accessible to anyone within the team that might need it. This will save time and increase productivity as you wont have team members spending long hours on training new members and on doing something that has been done by someone already in the organization.

What organizations have come across when implementing Knowledge Management (KM).
Knowledge management systems, which make possible the aggregation and dissemination of an organizations combined intelligence, provide a number of advantages, including enabling innovation and improving process efficiency. This is all good and well BUT successfully implementing these systems can be quite a challenge. According to Maryam Alvani, professor of information Systems at Robert H. Smith school of business, Dorothy E. Leidner INSEAD, Boulevard de Constance (1999) Modern information technology (e.g. the internet, the intranet, extranets, browsers, data warehouse, data mining techniques and software agent) can be used to systematize, enhance and expedite large-scale intra- and inter-firm knowledge management Alvani, Leidner (1999) further state the concept of coding , storing and transmitting knowledge in organizations is not newtraining and employee development programs, organizational policies, routines, procedures, report and manuals have served this function for years. An example by Peters (1994) the MacDonalds restaurants operating manual captures almost every aspect of restaurant management, including cooking , nutrition, hygiene, marketing, food production and accounting. By capturing, codifying and

disseminating this knowledge the company reduces the level of required restaurant management know-how for its managers while improving the effecti veness and efficiency of its operations

According to Jim Murphy, AMRs Knowledge management research director (2012) companies looking to do wide scale deployments still face scalability and performance issues. And as with other information technologies, user adoption presents the biggest test Two publication companies, Baseline and CIO insight have undertaken to do KM case studies over the years. I will look at a few of those case studies to demonstrate how organizations of different shapes and sizes have deployed KM in their environments and what challenges they came across. Case studies to be discussed are as below: World bank: behind the IT transformation Shuffle Master puts money on a portal Southern Co: IT Aids post Katrina recovery

World Bank: Behind the IT transformation

With all the management brouhaha that has recently been happening within the World Bank, a more important event is being largely overlooked. The transformation from what was said to be a According to Brian P.Watson top-down, hierarchical Washington, D.C.-based source of low-interest developmental loans and grants to emerging countries, to a decentralized, front-line, matrix organization that's using information and communications technologies to fight poverty, AIDS/HIV and other diseases, and environmental degradation. At the core of the bank's strategy has been its hugely ambitious effort to empower its clients many of them technically disenfranchisedwith the tools and knowledge-sharing capabilities they need to improve their lives and bring them into the mainstream of the world economy. This was a great challenge, creating a working knowledge management system meant that the banks information infrastructure and communication network had to be revamped completely When Wolfensohn agreed to head up World Bank in July 1995 he set out to change the behemoth of global developmental economics from a centralized, headquarters-driven organization to a decentralized, matrix-networked operation that relied on member countries to carry out and supervise their own project development and make their own decisions. According to Brian P. Watson (2007) To facilitate this, Wolfensohn told the World Bank Board of Governors in an October 1996 speech: The revolution in information technology increases the potential value of [the bank's development] efforts by vastly

extending their reach. We need to invest in systems that will enhance our ability to gather information, and experience and share it with our clients. The pillars of his vision included knowledge management and /or knowledge sharing. Brian P Watson(2007)[W]e will build a world-class knowledge management system throughout the bank to capture and organize our knowledge, make it more readily accessible to the staff, clients and partners, and strengthen the knowledge dissemination and capacity building efforts, he said in an internal bank document. It will connect with universities, foundations and other world class sources of knowledge so that the bank becomes a clearinghouse in knowledge about development." A chief information officer was appointed to carry out this mission. He had four strategies Support for decentralization and field office operations Support for knowledge sharing and knowledge management Comprehensive renewal of bank information systems Implementation of cost effectiveness review recommendations Mohamed Muhsin, CIO World Bank (1997) said "We position ourselves at a major intersection of the network economy where we help to connect global learning opportunities with investment assistance to governments. Put another way, it's about having two currencies: the currency of money and the currency of knowledge. We believe our work in bringing knowledge and information to developing countries is as important as the capital and investments that we provide as an engine for development. My goal is to make the World Bank the first port of call when people need knowledge about development, Wolfensohn said at the 1997 annual meeting. By the year 2000, we will have in place a global communications link, videoconferencing and interactive classrooms, affording our clients all around the world full access to our information basesthe end of geography as we at the bank have known it." The implementation was successful even though they had to increase initial forecasted budget by $10 million. Shuffle master puts its money on a portal

Before 2005, the company had been relied on a fragmented sales and order processing infrastructure that was creating difficulties for company employees to locate integrated and reliable business information. Carol Hildebrand (2007) For example, sales forecasts were issued several times each quarter, but were of limited value to salesmen trying to meet their quarterly goals because the numbers were stale by the time they were issued According to Carol Hildebrand (2007) The solution: a portal, built using Microsoft SharePoint Portal Server 2003 software, that pulls data on demand from more than 60 production SQL Server databases into an SQL report database that contains every customized report built by the I.T. group. The reports database serves as the linchpin, Greene says. It runs when a user launches a report in the portal; the request hits the report database, which calls the query, runs the report and throws the result up onto the

portal, he says. Most of those reports use data from live systems, giving the reports as close to real-time data as possible. Alan Pelz-Shape, principal strategist at Wipro(2012) Using a portal to share knowledge tends to be more useful at midsize businesses such as Shuffle Master than at larger organizations, a product strategy and architecture consultancy based in Bangalore, India: The scale of a small to midsize company allows it to get great benefits from a centralized content storage access point. [Small to midsize businesses] aren't so large as to make something like that clunky and unwieldy." Southern Cos IT aids post-Katrina recovery. Sothern Co took knowledge management to the next level by implementing the strategies and processes of Knowledge management to mitigate the risk that was posed to the organization by the forecasting of hurricane Katrina. They are an energy company that produces electricity for most of the Gulf Coast region. They began preparing for hurricane Katrina more than a year before the hurricane struck. Before hurricane Ivan, who was the one that struck before hurricane Katrina, struck in Alabama in September 2004, southern co embarked on procedures to implement business continuity even through the worst case scenario. They relied heavily on enterprise content management platform to make sure engineers got immediate access to plans of electrical substations and other power equipment. According to Bob Violino (2006) Workers at two utilities under the umbrella of Southern Co.Gulf Power and Mississippi Powertook drawings of substations from the company's new content management database and burned the information onto CDs. The company's substation design group then distributed the CDs and laptop PCs to field engineers responsible for each of the substations. After hurricanes Ivan and Katrina hit, engineers in the field were able to immediately access the design plans to begin work to restore power, including repairing damaged substations. Previously, engineers or maintenance workers would have to physically track down plans from a file, a process that took an average of two hours, according to Holly Godfrey, technical consultant at Southern Co. With the new setup, documents could be obtained within minutes. While some workers viewed data to rebuild assets in the affected regions, others used the plans to buy specific parts and equipment. That enabled them to restore power faster, Godfrey says. In fact, after Hurricane Katrina, all of Mississippi Power's 195,000 customers lost electricity, and two-thirds of the subsidiary's transmission and distribution was damaged or destroyed, according to utility executives. Power was restored to Mississippi Power customers within 12 days. Initially, utility workers estimated the work would be done within four weeks, according to a published report.

Business continuity, which is needed for every organization, has also come as a benefit that comes with implementing a knowledge management system.

Research Method
Research Method I intend using in this study is qualitative as I will be measuring the effectiveness and efficiency of Knowledge Management System of how they transform different organizations. This will be conducted through interviews, direct observations, and surveys ad focus groups. The selection criterion for informants of the study has not been outlined in detail. The broad perspective is that 2 different companies, both in service and size will be studied. A verbal video of informants giving consent to be part of the study will be recorded and a consent form developed and signed by the informants before undergoing the study. The relationship I intend to form with the informants is that of a collaborative approach thus will be working extremely closely with them in per forming the study. I will keep track of the research process through dairy notes with all activities during the research. Data will be collected through interviews, direct observation, focus groups and surveys. A video recorder will be used to record all focus groups and interviews whiles a tape recorder will be used to record interviews, with the consent of the informants of course. The result of the study will be presented in a form of a research paper. I intend using peer debriefing in protecting the reliability and validity of the study.

Conclusion
With influence from all the literature that I have explored in dissecting the study of the impact knowledge management, I am concluding the following: Knowledge management is what you learn from experience. It is the results of occurrences that take place before, during, and after the event has occurred. It is the right knowledge to the right people at the right time and space. Explicit knowledge can be expressed in various ways and transmitted in various forms. Tacit knowledge is hard to communicate but can be shared in personal interactions and other IT tools that enable personal interaction like video conferencing and recorded videos. Identifying, creating, storing, sharing, and using knowledge are core knowledge activities. Learning is the acquisition of knowledge or skills, an integral part of knowledge management, and its ultimate end. From the case studies I explored that demonstrated the impact that implementing a knowledge management, it is evident that knowledge management systems do aid business in terms of overall success World bank behind the it transformation case study showed the successful effects of the deployment of KM in a form of building a decentralized matrix-networked operation through knowledge management and knowledge sharing. The main aim of this deployment was to make world bank the initial point of call in acquiring knowledge about development. Shuffle master puts its money on a portal case study deployed a portal to demonstrate this successful impact that knowledge management systems are said to bring to the table. Southern Co revealed another benefit that was not touched on in the case studies or papers studied while selecting literature for this proposal. the use of knowledge

management systems to implement business continuity processes in case disaster stuck and this was done through an enterprise content management platform. Reviewing the literature I have reviewed has changed the way I initially through I was going to approach this research, I was going to conduct my study focusing on effects of knowledge management, knowledge management systems and knowledge sharing on the overall success of organization, I am now going to also study the effects of knowledge management related to business continuity. My anticipated findings are that I am able to demonstrate business efficiency and effectiveness that is said to be brought about deployment of knowledge management strategies and processes in different organizations. I foresee this research leading to the following questions: Will deployment of KM processes and strategies in various sized companies produce the same anticipated results or are there companies that are not tailor made for these processes. How are these processes going to be selected for different types of organization, how is the need assessed. Further research leading to business continuity through KMS processes and strategies. I intend using a lot of peer debriefing so as to try and stay open minded and prepare myself for the unexpected with results of the study. I believe this will open doors to deeper insight regarding KMS strategies and processes.

References http://en.wikipedia.org/wiki/Knowledge_management http://www.km-forum.org/what_is.htm http://www.tlainc.com/articl66.htm http://www.systems-thinking.org/kmgmt/kmgmt.htm http://www.knowledgemanagementgateway.com/ http://en.wikipedia.org/wiki/ http://www.adb.org/documents/presentations/knowledge-management-andlearning/managing-knowledge-at-work.pdf http://en.wikipedia.org/wiki/Knowledge_transfer http://www.systems-thinking.org/kmgmt/kmgmt.htm http://www.cioinsight.com/c/a/Case-Studies/5-Big-Companies-That-Got-KnowledgeManagement-Right/1/ http://www.digimind.com/knowledge-management-system/

Denham Grey of Grey Matter Inc(2010) KM Forum Archives -- The Early Days Gene Bellinger (2004) Knowledge ManagementEmerging Perspectives Redman, T. C. (1998). The impact of poor data quality on the typical enterprise. Communications of the ACM, 41(2), 79-82. Graeme Shanks, Emily Tay (2001). The role of knowledge Management in moving to a customer-focused organization.

Ajay K Gupta (retrieved 2012) Knowledge Management Uday kulkarni, Ronald Freeze (retrieved 2012) Measuring Knowledge Management Capabilities Brian P Watson World Bank: Behind the IT transformation (2007) Carol Hildebrand (2006) Shuffle Master Puts its Money on a Portal Bob Violino (2006) I.T., Not Just Elbow Grease, Help Utility's Recovery Moya K. Mason (2012) Knowledge Management: The Essence of the Competitive Edge

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