Knowledge Management GROUP 5 Knowledge Management Dave Owens

Knowledge Management GROUP 5 Knowledge Management Dave Owens T. J. Vogt Chatchawan Wongwattanakit “OT” Yueping Wang 1

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) 2

Knowledge Management Agenda Questions/ Discussion What is KM? Summary Key Concepts Knowledge Management KM in the Army Implementation & Maintenance Other KM Cases Pw. C, LRC KM in China 3

Knowledge Management What is Knowledge Management? Common Knowledge Management Definitions (just a few of the many) r. Discipline within an organization that ensures that the intellectual capabilities of that organization are shared, maintained and institutionalized r. The process of systematically and actively managing and leveraging the stores of knowledge in an organization r. The way a company stores, organizes and accesses internal and external information. r. Refers to an entire integrated system for accumulation, integration, manipulation, and access of data across multiple organizations (9), (10) 4

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) 5

Knowledge Management Knowledge Hierarchy Knowledge Management Tacit Knowledge r Tacit – This type of knowledge exists in people’s heads, not articulated or documented Explicit Knowledge Information Data r Explicit – This type of knowledge can be » Processed by information systems » Codified and recorded » Archived and protected 6

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 r 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 replacement’s mistakes, lost knowledge and lost skill( Beazley et al, 2002) r 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 - An astounding example of this is the loss of the original computer source code, written in the 1950’s, that spawned the Y 2 K software crisis, has cost businesses worldwide an estimated $1 trillion (Petch, 1998) (25) 7

Knowledge Management People and Systems People r Knowledge Teams - multi-disciplinary, cross-functional r Learning Organization - personal/team/org development r Corporate Initiatives – Chief Knowledge Officer Systems r Knowledge Data-bases - experts, best practice r Knowledge Centers - hubs of knowledge r Technology Infrastructure - Intranets, Domino Document Management (9), (12) 8

Knowledge Management Two Key Thrusts Sharing existing knowledge “Knowing what you know” Knowledge for Innovation “Creating and Converting” (9) 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 10

Knowledge Management Seven Levers r Customer Knowledge - the most vital knowledge r Knowledge in Products - ‘smarts’ add value r Knowledge in People - but people ‘walk’ r Knowledge in Processes - know-how when needed r Organizational Memory - do we know what we know? r Knowledge in Relationships - richness and depth r Knowledge Assets - intellectual capital (9) 11

Knowledge Management Implementing and Maintaining KMS KM Why Implement KM? Strategy for Implementing IT’s Role in Implementing Who’s Responsible? 12

Knowledge Management Why Implement KMS? r IBM, Oracle, Cisco – Measure intranet value at over $1 billion r BT, UK telecommunications company – Employee ideas have saved £ 100 million r Sodexho’s Super. Sleuth – Cash reward for employees submitting sales leads – Led to over $90 million in sales volume (20) 13

Knowledge Management Common Misconceptions Smaller companies, who often claim that they can’t 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) 14

Knowledge Management Who’s Responsible? r Everyone: – Managers/Supervisors » Leaders as knowledge champions – The Knowledgeable » Not a problem of knowing, but of access – End Users » Feedback » Psychological barriers (13), (14) 15

Knowledge Management Role of IT in Implementation r “The biggest contributor to this brilliant growth of the knowledge management system is information technology. ” r Lee et al. also say, “. . . there are negative perspectives about information technology. ” r 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) 16

Knowledge Management Strategy for Implementing KM The Me. CTIP model Organizational Climate Macro. Environment Technical, Informational, Personal Technical Climate (19) 17

Knowledge Management Strategy for Implementing KM r Macro-environment – External Factors » Globalization » Technology » E-companies Organizational Climate Technical, Informational, Personal Macro. Environment Technical Climate (19) 18

Knowledge Management Strategy for Implementing KM r Organizational Climate – Structure » Formal Structures Cross-functional project groups u Cross-discipline learning groups Organizational Climate u Technical, Informational, Personal Macro. Environment Technical Climate » Informal Structures Grapevine/Underground u Cliques u – Strategy/Goals – Culture (19) The difference between, “. . . what is formally agreed and what actually takes place. ” 19

Knowledge Management Strategy for Implementing KM r Technical Climate – Infrastructure – Response to change/Conflict Organizational Climate r Resistance – Listen to negative feedback – Conflict leads to improved ideas (13), (19) Technical, Informational, Personal Macro. Environment Technical Climate 20

Knowledge Management Strategy for Implementing KM r Technical – System Standardization – Compatibility – Usability Organizational Climate Technical, Informational , Personal Macro. Environment Technical Climate (13), (19) 21

Knowledge Management Strategy for Implementing KM r 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) Organizational Climate Technical, Informational , Personal Macro. Environment Technical Climate 22

Knowledge Management Strategy for Implementing KM r Personal – Knowledge roles – Motivation – Learning networks (19) Organizational Climate Technical, Informational, Personal Macro. Environment Technical Climate 23

Knowledge Management Maintaining KM Systems r Provide Adequate Access – Intranets – Classes r 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) 24

Knowledge Management Maintaining KM Systems r Use it or lose it – Cook compares KMS to draining battery r Share knowledge – Knowledge is individual power, not group power r Removing knowledge “constipation” – Crowded closet (13) 25

Knowledge Management Maintaining KM Systems r Incentives – Financial – Big Idea – Pub Money r Organizational Sociology – Know your audience r Be flexible – “No single recipe” for success (13) 26

Knowledge Management The Difference of Knowledge Management in US and CHINA 27

Knowledge Management Cultural Factors Impacting knowledge Management r Internationalization creates a need to know how peoples in different countries to apply knowledge management. r 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 29

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) 30

Knowledge Management The different ways in deal with gift Presents are usually opened in front of the giver Presents are usually opened in private 31

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) 32

Knowledge Management “guanxi” in China r Social ties -- interaction frequency, degree of intimacy and trust r It’s not what you know, it’s who you know. r Business guanxi (personal relationships in Chinese market) r Government guanxi (personal relationships with government officials in different levels and bureaus). (5) 33

Knowledge Management Could we combine two styles of knowledge into an integral whole 34

Knowledge Management r (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) 36

Knowledge Management in Practice 37

Knowledge Management Pricewaterhouse. Coopers Pw. C: The Pricewaterhouse. Coopers Law Firm & Law Department Service Group The World’s largest professional service organization: Service and Help general counsel and law firm executive management solve complex business problems r Measurably enhance their ability to build sustainable shareholder value r Manage Risk r Improve quality and performance by providing services based on quality and integrity r Pw. C includes the member firms of Pricewaterhouse. Coopers International Ltd. , r (21) 38

Knowledge Management LRC: Legal Research Center r r Helping corporate law departments and their outside counsel reduce their research costs and efficiently manage their legal knowledge for nearly 25 years Remain the nation’s 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) 39

Knowledge Management The Study In 2003, Florida Legal Technology Institute Study r Reviewed the marriage between Pw. C and LRC, catalog the advantages of KM in Pw. C law firms and departments r KM Study with 348 legal professionals around the world (law departments and outside law firms) r + = 40

Knowledge Management Pw. C and LRC KM Study Results Announced r r r 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) 41

Knowledge Management Pw. C and LRC KM Study Results Announced (cont. ) r r 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) 42

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. r r r 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) 43

Knowledge Management Why Knowledge Can add up to nothing -r r r r 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) 44

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: q 87% of European business directors believe they could enhance their company’s competitiveness with improved KM and 76% believe Building + Sharing Knowledge is important for their company. q 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. q Hoffmann-Roche, the Swiss pharmaceutical firm, has estimated that it saves over $1 million per day due to its KM activities q BP Amoco attributed $260 million in bottom-line savings to a KM program (23) 45

Knowledge Management Success (Cont. ) q Energy firm Schlumberger Ltd. reported an estimated 668% ROI on a $72 million investment in KM over a period of six years q Chevron Corporation estimates that it saved an initial $150 million, plus at least another $20 million annually by instituting a best practices program q 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 q 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 q Hewlett-Packard’s 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) 46

Knowledge Management Keys to successful KM As is the case with many new practices in workplace: r r r 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 Trans 4 mation Training Ltd, (24) 47

Knowledge Management Army Knowledge Management 48

Knowledge Management 49

Knowledge Management Army Knowledge Management “It is the Army’s 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) 50

Knowledge Management Army Knowledge Management r Development of Army IM/IT and KM r Coordination between Combatant Commands and Joint Staff, components and agencies, etc… r Serves as the focal point for management and integration with IM/IT r Oversees the acquisition of IM/IT and KM solutions (7) 51

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) 52

Knowledge Management Summary r Key Concepts of KM – Explicit Knowledge – Tacit Knowledge r Implementation, Maintenance r China r KM cases, advantages and disadvantages r Army KM 53

Knowledge Management Questions 54

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: //unpan 1. un. org/intradoc/groups/public/documents/APCITY/UNPAN 020318. 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 G 6, interviewed by phone by Dave Owens, 15 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/issue 18/knowledgemgt/

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. Cyber. Psychology & Behavior , 9 (3), 367 -368. (18) Moffett, S. , & Mc. Adam, 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. , Mc. Adam, 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 Pricewaterhouse. Coopers”, Business Wire, June 9, 2003. (23) Braganza, A. , Mollenkramer, G. J. (2002), “Anatomy of a failed knowledge management initiative: lessons from Pharma. Corp’s 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