Chapter 8 Strategies for managing information and knowledge

Chapter 8 Strategies for managing information and knowledge in e-business Paula Goulding ICT 326 1

Introduction ‘Across all industries, information and the technology that delivers it have become critical, strategic assets for business firms and their managers. ’ (Laudon & Laudon 2000) ICT 326 2

Why worry about information and knowledge? § Because of integrative role of information – how to manage people / info / IT / processes / structures to implement strategies and achieve desired results for organisation Strategy Structure and systems People and culture Technology Processes ICT 326 Use of the information resource 3

Why worry about information and knowledge? § Because of the need to understand own requirements • Roles • Responsibilities • Accountabilities • Types of decisions • Actions • Relationships What do these imply about need for information / knowledge? ICT 326 4

Why worry about information and knowledge? § Adopt holistic perspective and critical eye – do not have specialist knowledge of IT professional, but – can discern where IT can/should be deployed to enable appropriate use of information by people in organisation – must balance § opportunities / risks / opportunity costs of IT investments against § capabilities of people in business to use information to run organisation and improve business performance ICT 326 5

Why do managers need to take responsibility? § Need to understand organisational approach to information / knowledge management – How organisation collects, stores, manages, disseminates information / knowledge What information managers need to receive & pass on? What managers need to KNOW ICT 326 6

What is data, information, knowledge? § Data – Meaningless ‘points’ in time and space § Out of context 100 5% principal interest rate ICT 326 7

What is data, information, knowledge? § Information: – ‘An artefact, a way of describing the significance for some agents of intrinsically meaningless events’ (Dretske 1981) – ‘information is data recorded, classified, organised, related or interpreted within context to convey meaning’ (Blumenthal 1969) ICT 326 8

What is data, information, knowledge? ‘That collection of data which when presented in a meaningful manner and at an appropriate time improves the knowledge of the person receiving it in such a way that he/she is better able to undertake a necessary activity or make a necessary decision’ (Galliers 1987) ICT 326 9

What is data, information, knowledge? It is worth remembering for our purposes that: § ‘Information cannot exist independently of the receiving person who gives it meaning and somehow acts upon it’ (Liebenau & Backhouse 1990) ICT 326 10

Information Principal = $100 Interest rate = 5% Interest in 1 year = $5 Open bank account • Pieces of data may represent information • Depends on understanding of person receiving data ICT 326 11

Knowledge § Patterns that emerge from data and information – Receiver recognises and understands patterns and their implications Interest = Principal x Interest rate Principal 1 + Interest 1 = Principal 2 P 2 + I 2 = P 3 § Derived from individuals transforming data and information in a processing hierarchy that enables action (Wilson 1996) ICT 326 12

Knowledge § ‘a fluid mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of the knowers. In organizations, it often becomes embedded not only in documents or repositories but also in organizational routines, processes, practices and norms’ (Davenport & Prusak 1998) ICT 326 13

Knowledge § Demonstrated through recognition and understanding of patterns, similarities and their implications § Blend of – personal experience and expertise – values and constructs used to interpret the world – information and context to generate new insights, understanding, and know-how ICT 326 14

Knowledge management § Concerned with capturing, storing, manipulating data and information to enhance a manager’s ability to gain insights, understand patterns, trends and relationships – – – Aid to decision making and control activities Helps to envisage and predict the future Relies on interaction between relevant information and an experienced person in given context for new knowledge to be generated ICT 326 15

Why focus on knowledge management? § Knowledge-based industries are becoming leading industries 2000 s Software/hardware 1900 s Telecommunications Steel Media / publishing / film and television Oil / gas Coal Pharmaceuticals Some manufacturing Finance/stockbroking Some retailing ICT 326 16

Issues and challenges in knowledge management § Need to understand core knowledge processes in organisations – Identification – Acquisition – Development – Sharing & distribution – Utilisation – Retention § Strategies developed for KM need to take account of organisational culture and context, reliance on information, existing and required knowledge processes ICT 326 17

Developing K M strategies § If knowledge is essential to ability of organisation to innovate, compete and deliver value to customers, then developing strategies for exploiting knowledge assets is important. § Relationship between organisational strategy and the use of knowledge and intellectual assets = knowledge management strategy – Decision made about mix of strategy, business processes, products and services, technology and people that it exploits to compete, influences the types of knowledge resources an organisation requires – Closing gap between what resources an organisation has, and what it requires is vital in articulating a KM strategy ICT 326 18

Systems school § Capture specialist knowledge in knowledgebases – Other ‘experts’ have access § Individual / group-held knowledge made more widely available § Tends to be domain specific – Codification of technical ‘know-how’ (data & expertise) to those qualified to use it ICT 326 19

Systems school § Reward systems must recognise knowledge creation and contribution § Only feasible because of IT – IS capture / store / organise / display knowledge – Knowledge is explicated, codified, stored in repository ICT 326 20

Cartographic school § Mapping organisational knowledge § Record and disclose ‘who knows what’ – ‘people finder’ database § Aims to ensure knowledgeable people are accessible to others for consultation, advice, knowledge exchange – Gateways to knowledge § Tacit and explicit – Exchange may be through conversation and contact ICT 326 21

Cartographic school § Rewards based on exchange of knowledge § Requires – Communications network – Culture of support and knowledge sharing § Role of IT – Connect people via intranets – Locate knowledge sources and providers via intranet / extranet / Internet ICT 326 22

Process school § Performance of key business processes is enhanced by supporting operating personnel with information and knowledge § Emphasizes knowledge re-use, transfer, best practice § Knowledge (expertise, experience, learning) and information (intelligence, feedback, data analysis) provided via IS/IT to staff § Supply and distribution of knowledge is not limited § Aims to enhance core capabilities with knowledge flows ICT 326 23

Organisational school § Use of networks to share and pool knowledge § Knowledge communities – Groups of people with common interests, problems, experiences – Inter or intra-organisational – Codified and personalised knowledge exchanges ICT 326 24

Organisational school § Require a human ‘hub’? § More successful where culture supports sociability and networking § Knowledge communities are as much social networks as IT-enabled communities ICT 326 25

Selecting an approach to K M § Requires clear understanding of the knowledge requirements of proposed business strategy – A clear articulation of contribution of knowledge-based performance and innovation § Audit of organisation’s existing capability and gaps or weaknesses – Gaps imply need for access to certain knowledge capital and capabilities ICT 326 26

Developing KM Strategies § Codified or Personalised Approach? – Standardised or customised products/services? – Mature or innovative product/service? – Staff rely on explicit or tacit knowledge to solve problems? § Balance between technology & people is dependent on organisation’s competitive strategy § Successful implementation of KM strategy will need to recognise role of humans in knowledge creation and use, appropriate reward mechanisms, and creation of culture of knowledge sharing (Hansen et al. 1999) ICT 326 27

Becoming a knowledge-based organisation § Success factors – Corporate culture that recognises role of knowledge and intellectual propriety in success of organisation § Creation, exchange and utilisation of knowledge are valued and respected § Attention paid to attitudes and structures that support building of knowledge culture – KM regarded as on-going strategic initiative § Becomes invisible as absorbed into everyday routines and behaviours ICT 326 28

Benefits of developing a knowledge culture § Developing knowledge assets are fundamental to – Innovation – Delivering value to customers – Quality assurance § All these contribute directly to organisation’s profitability and long-term viability § Ability to combine and renew intellectual and physical assets that drives innovation and creates dynamic capabilities, crucial for sustainable competitive advantage ICT 326 29