The task of identifying, capturing, retrieving, sharing and evaluating relevant information or knowledge within an enterprise is daunting at best and has become a top-of-mind issue both in the commercial and public sector marketplaces. According to a survey conducted by the Journal of Knowledge Management completed in August 1997, some 92 percent of the respondents reported that they worked in knowledge-intensive organizations, yet only 6 percent of the organizations were described as "very effective" in leveraging knowledge to improve business performance and results, while 31 percent reported that their organizations were "ineffective" or "very ineffective" in leveraging knowledge. These statistics, coupled with the importance of maintaining and sharing intellectual capital, have fueled a new service discipline--knowledge management.
Knowledge management has been defined as the sharing and utilizing of information in an organization for specific business advantages:
"Knowledge management is an integrated, systematic approach to identifying, managing and sharing all of an enterprise's information assets, including databases, documents, policies and procedures, as well as previously unarticulated expertise and experience resident in individual workers." (K-KMGT-1650/Bair, J.© 1996 The Gartner Group.)
Trends and Challenges in Knowledge Management
A number of key business and economic trends are having a significant impact on how we leverage knowledge and structure organizations to capitalize on this knowledge. I would like to describe five key areas that are dramatically impacted by the knowledge enterprise:
- Decision making
- Work process definition and execution
- Organization and structure
- Growth in knowledge
- Products and services
In subsequent columns, I will address how to begin developing your knowledge management strategy and the role of IT in supporting knowledge management.
Throughout the past decade, organizations have undergone dramatic change in how they make decisions and how they are structured to support decision making. Businesses are moving away from hierarchical organizations in which decision-making authority is concentrated among a relatively small number of individuals. Instead, the responsibility for decision making is being distributed and shared, making it necessary for more individuals within the same organization to have access to knowledge in order to support their expanded decision-making responsibilities.
Businesses are also changing how they define work processes to focus more on results and less on processes. More and more companies are focusing less on defining the details of how the work process gets done and more on what it must accomplish. Responsibility for specifically defined results is now embedded in the job descriptions, controls and reporting mechanisms of the organization and can be measured for effectiveness.
Organization and Structure
Organizational structures are becoming less "real" and more dynamic through "external virtualization," the reliance on outside personnel to perform business functions. Consider the use of temporary employees and subcontractors, increased outsourcing and establishing long-term/permanent external partnership networks. The result of this shift is that much of the critical knowledge associated with the business is external to the organization or resident within it only for a short period of time, shortening the time to capture and leverage critical knowledge.
Growth in Knowledge
There has been exponential growth in the volume, breadth, diversity and criticality of knowledge leading to problems in navigating and storing this knowledge for decision-making effectiveness. Simultaneously, the traditional repositories for much of an organization's knowledge (e.g., employees and internal information systems) are becoming less reliable and less adequate as storage and retrieval vehicles.
Custom Products and Services
Products and services are becoming increasingly "customized" as businesses attempt to segment and more closely satisfy the needs of their markets and customers. In some businesses, this trend has progressed to the point that there are no "standardized" products as each offering becomes "tailored" to the requirements of the next customer for whom it is delivered. This results in more knowledge being generated and required during the production process to document the specific version being produced.
To meet these challenges and improve business outcomes, there is an increasing realization that a conscious effort and resource investment must be made to improve the use of knowledge within an enterprise. I look forward to exploring how companies can effectively capture and manage knowledge in upcoming columns.
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