KM Comes of Age

After spending decades languishing in the backwater of academia and limited corporate visibility, knowledge management (KM) is beginning to get some respect. Often thought of as esoteric and difficult to implement, companies are now beginning to realize KM can provide real, verifiable, bottom-line results.

KM is a combination of software products and business practices that combine to help organizations capture, analyze, and distill information so the organization can learn. KM is pertinent to the issue of data management because it is ultimately based on capturing and preserving data in a repository. Once data has been captured, it can be used in the context of applications, such as customer relationship management; business practices, such as process manufacturing and sales management; and interpersonal communications.

An organization that has implemented a robust, scalable KM solution will be able to use this investment to enter new markets or increase current market share, improve customer satisfaction and lifetime value, reduce product or service defects, and reduce time to market with new products.

There are a variety of approaches to KM, but most of them involve some method of capturing information and making it easily accessible by knowledge workers. This enables the development of best practices and knowledge sharing applications. Best practices applications capture lessons learned from earlier engagements, both positive and negative. Workers in other divisions, or who may be entering similar engagements for the first time, will benefit from these lessons, reducing the likelihood of making the same mistakes their predecessors did. Similarly, knowledge sharing applications enable users to leverage the expertise of colleagues with greater experience or insight.

One interesting aspect of KM is that there is no single technology, per se, that one can point to. But KM applications are typically based on some sort of database engine or repository. A successful KM repository must efficiently handle a variety of documents, not just database records. It must have a mechanism for categorizing documents and enabling users to easily and quickly search for pertinent data. Some KM solutions are based on mining e-mail, since it is assumed that e-mail is a significant source of knowledge transfer between colleagues. This brings up a whole host of privacy issues that must be carefully addressed, such as allowing employees to block e-mail messages that are private or confidential in nature from entering the public repository. Other KM solutions depend on the employee to publish documents or files to the repository, but these approaches often require significant training and depend on the willingness of the employee to cooperate.

Other technologies that are important in KM include document management applications, groupware, search engines, enterprise information portals, and data warehouses.

The biggest stumbling blocks to implementing a KM solution are organizational and cultural in nature, not technical. KM requires a company to invest heavily in training, and, as noted above, obliges employees to make a commitment to participate in the solution. For this reason, successful KM implementations are driven by senior management who assemble cross-functional teams able to demonstrate the benefits of KM to their various constituencies. Many companies first embark on a pilot project to demonstrate success and develop a preliminary return on investment analysis, then roll it out throughout the enterprise.

For a KM project to succeed, employees must be encouraged to share information freely across corporate boundaries. This can be a tall order for a company that traditionally has had strong boundaries between groups. Another challenge is getting employees to commit the time required to learn and use the system on a regular basis. A KM solution that isn’t actively used by employees who see immediate value will languish and die of neglect.

If a company is serious about doing KM, it must be prepared to make a significant long-term investment. A typical KM implementation can cost a lot of money. In fact, industry analyst firm IDC estimates the average KM project budget in 2000 will be $2.7 million. One reason for this is that each company is different; no single out-of-the-box KM solution will work for all companies. There is also usually a significant professional services component to KM implementation, usually because most companies don’t have KM expertise in-house. --Robert Craig is vice president of strategic marketing at Viador Inc. (Burlington, Mass.), and a former director at the Hurwitz Group Inc. Contact him at robert.craig@viador.com.