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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
PwC, LRC
KM in China
3
Knowledge Management
What is Knowledge Management?
Common Knowledge Management Definitions
(just a few of the many)
Discipline within an organization that ensures that the intellectual
capabilities of that organization are shared, maintained and
institutionalized
The process of systematically and actively managing and
leveraging the stores of knowledge in an organization
The way a company stores, organizes and accesses internal and
external information.
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

Tacit
– This type of
knowledge exists in
people’s heads, not
articulated or
documented
Explicit Knowledge
Knowledge
Information
Data

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

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)

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 Y2K software crisis, has cost
businesses worldwide an estimated $1 trillion (Petch, 1998)
(25)
7
Knowledge Management
People and Systems
People
 Knowledge Teams - multi-disciplinary, cross-functional
 Learning Organization - personal/team/org development
 Corporate Initiatives – Chief Knowledge Officer
Systems
 Knowledge Data-bases - experts, best practice
 Knowledge Centers - hubs of knowledge
 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
Classify
Embed
Product/
Process
Diffuse
Create
Use/Exploit
Knowledge
Repository
Access
Organize/
Store
Share/
Disseminate
10
Knowledge Management
Seven Levers
 Customer
Knowledge - the most vital knowledge
 Knowledge in Products - ‘smarts’ add value
 Knowledge in People - but people ‘walk’
 Knowledge in Processes - know-how when
needed
 Organizational Memory - do we know what we
know?
 Knowledge in Relationships - richness and depth
 Knowledge Assets - intellectual capital
(9)
11
Knowledge Management
Implementing and Maintaining KM
Maintaining KMS
KM
Why Implement KM?
Strategy for Implementing
IT’s Role in Implementing
Who’s Responsible?
12
Knowledge Management
Why Implement KMS?

IBM, Oracle, Cisco
– Measure intranet value at over $1 billion

BT, UK telecommunications company
– Employee ideas have saved £100 million

Sodexho’s SuperSleuth
– 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?
 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
 “The biggest contributor to this brilliant growth of the
knowledge management system is information technology.”

Lee et al. also say, “...there are negative perspectives about
information technology.”

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 MeCTIP model
Organizational
Climate
Technical,
Informational,
Personal
MacroEnvironment
Technical
Climate
(19)
17
Knowledge Management
Strategy for Implementing KM
 Macro-environment
– External Factors
» Globalization
» Technology
» E-companies
Organizational
Climate
Technical,
Informational,
Personal
MacroEnvironment
Technical
Climate
(19)
18
Knowledge Management
Strategy for Implementing KM
 Organizational
Climate
– Structure
» Formal Structures
Cross-functional project
groups
 Cross-discipline learning
groups
Organizational
Climate

Technical,
Informational,
Personal
MacroEnvironment
Technical
Climate
» Informal Structures
Grapevine/Underground
 Cliques

– Strategy/Goals
– Culture
(19)
The difference between, “...what is formally
agreed and what actually takes place.”
19
Knowledge Management
Strategy for Implementing KM
 Technical
Climate
– Infrastructure
– Response to change
to
change/Conflict
Organizational
Climate
 Resistance
– Listen to negative
feedback
– Conflict leads to
improved ideas
(13),(19)
Technical,
Informational,
Personal
MacroEnvironment
Technical
Climate
20
Knowledge Management
Strategy for Implementing KM
 Technical
– System
Standardization
– Compatibility
– Usability
Organizational
Climate
Technical,
Informational,
Personal
MacroEnvironment
Technical
Climate
(13),(19)
21
Knowledge Management
Strategy for Implementing KM
 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
MacroEnvironment
Technical
Climate
22
Knowledge Management
Strategy for Implementing KM

Personal
– Knowledge roles
– Motivation
– Learning networks
(19)
Organizational
Climate
Technical,
Informational,
Personal
MacroEnvironment
Technical
Climate
23
Knowledge Management
Maintaining KM Systems
 Provide
Adequate Access
– Intranets
– Classes
 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
 Use
it or lose it
– Cook compares KMS to draining battery
 Share
knowledge
– Knowledge is individual power, not group power
 Removing
knowledge “constipation”
– Crowded closet
(13)
25
Knowledge Management
Maintaining KM Systems
 Incentives
– Financial
– Big Idea
– Pub Money
 Organizational
Sociology
– Know your audience
 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
 Internationalization
creates a need to know
how peoples in different countries to apply
knowledge management.
 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
 Social
ties -- interaction frequency, degree of
intimacy and trust
 It’s not what you know, it’s who you know.
 Business guanxi (personal relationships in
Chinese market)
 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

(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
Knowledge Management in Practice
37
Knowledge Management
PricewaterhouseCoopers
PwC: The PricewaterhouseCoopers 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
 Measurably enhance their ability to build sustainable shareholder value
 Manage Risk
 Improve quality and performance by providing services based on quality and
integrity
 PwC includes the member firms of PricewaterhouseCoopers International Ltd.,

(21)
38
Knowledge Management
LRC: Legal Research Center




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
 Reviewed the marriage between PwC and LRC,
catalog the advantages of KM in PwC law firms and
departments
 KM Study with 348 legal professionals around the
world (law departments and outside law firms)

+
=
40
Knowledge Management
PwC and LRC KM Study Results Announced





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
PwC and LRC KM Study Results Announced (cont.)


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.



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 -






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
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:
 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.
 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.
 Hoffmann-Roche, the Swiss pharmaceutical firm, has estimated that it saves over
$1 million per day due to its KM activities
 BP Amoco attributed $260 million in bottom-line savings to a KM program
(23)
45
Knowledge Management
Knowledge Management Success (Cont.)

Energy firm Schlumberger Ltd. reported an estimated 668% ROI on a $72 million
investment in KM over a period of six years

Chevron Corporation estimates that it saved an initial $150 million, plus at least
another $20 million annually by instituting a best practices program

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

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

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:



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 Trans4mation 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
 Development
of Army IM/IT and KM
 Coordination between Combatant Commands and
Joint Staff, components and agencies, etc…
 Serves as the focal point for management and
integration with IM/IT
 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
 Key
Concepts of KM
– Explicit Knowledge
– Tacit Knowledge
 Implementation,
Maintenance
 China
 KM
cases, advantages and disadvantages
 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://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN020318.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 G6, 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/issue18/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. CyberPsychology &
Behavior , 9 (3), 367-368.
(18) Moffett, S., & McAdam, 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., McAdam, 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
PricewaterhouseCoopers”, Business Wire, June 9, 2003.
(23) Braganza, A., Mollenkramer, G.J. (2002), “Anatomy of a failed knowledge management initiative: lessons from
PharmaCorp’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