Magazine Article | May 1, 1999

Managing Knowledge Within Your Company

Source: Field Technologies Magazine

Traditional document management systems only go so far in managing company information. A knowledge management solution can put all forms of information at your employees' fingertips.

Integrated Solutions, May-June 1999
What is a sport? There probably isn't a tavern in the country where patrons have not attempted to answer this question. Some will include horse racing, while others will scoff at the notion. Bowling will most likely also raise a few objections. In this case the problem lies in the question more than in the answers it draws. The question assumes that each person has the same definition of sport, which is often not the case.

The same problem occurs when trying to answer, "What is knowledge management?" The question assumes that knowledge management is a category. And, depending upon their own definitions of knowledge management, vendors can conveniently position their products in this category. Document management systems become knowledge management systems. And, document scanners are transformed into knowledge capture devices.

The problem, however, is that knowledge management is not a category or a product. "Peter Drucker is the originator of the term 'knowledge worker' and our company is very much influenced by his work. I believe he is the person that started the concept of knowledge management," says Trevor Davis, president of Hyperknowledge. "Drucker argues that knowledge is the source of all wealth. If you look at the U.S. economy in the next several decades, it will be knowledge that drives increased wealth."

According to Davis, knowledge management within an organization is any strategic initiative aimed at exploiting existing knowledge and creating new knowledge in order to gain a competitive advantage. "The most important aspect of knowledge management is to gain a competitive edge," continues Davis. His company was founded in 1992 and its U.S. headquarters is based in Woburn, MA. The company's software has been implemented by financial service, utility, transportation and communication organizations.

Defining Knowledge Management
While knowledge management may be a "strategic initiative," there are certain enabling technologies that make it possible. The first of these technologies are the Internet and intranet. Says Davis, "These technologies are crucial to knowledge management. We don't see any serious players in this space that haven't embraced these technologies. Knowledge management systems are built on the Internet or intranet."

Another enabling technology is information storage, such as document management systems. These systems allow documents to be indexed, stored and retrieved throughout an organization. "Document management is essential to knowledge management, but it is not knowledge management," adds Michael Turillo, international chief knowledge officer at KPMG. He adds that many document management companies wrongly claim to have knowledge management systems. KPMG was formed in 1987 and is a global professional services and integration company.

Advanced search-engine technology allows users to access all the knowledge within their organization and beyond. The search engines have to sift through millions of documents and database information and present the user with pertinent results. Knowledge management products incorporate all three of these core technologies.

However, true knowledge management provides a context for the information and not just voluminous data. "Knowledge is knowing what task I am trying to accomplish, why I am trying to accomplish this task, and how I should accomplish this task," explains Davis. "A knowledge management system should provide users with the answers to these three questions."

Collaboration Between Employees
The ability for employees to work collaboratively within an organization is also a vital component of knowledge management systems. Collaboration is often difficult when employees on a team are separated by cities or, in some cases, countries. The problem is not unique to large companies. Smaller companies often have international suppliers or partners that must be part of any collaborative process.

Ultimately, every user on an organization's enterprise should have access to information that should help them make strategic decisions. "In a large company with 50,000 employees, the left hand often doesn't know what the right hand is doing," comments Dan Letendre, vice president of product marketing for Open Text Corporation. "This type of company needs a central location on its intranet where employees can access data." Letendre's company was founded in 1991 and is headquartered in Waterloo, Ontario.

For example, a member of a project team would be able to access reports from a company's enterprise resource planning (ERP) system. Team members do not have be ERP users, but they may need reports generated by the ERP system. The team can then use the information to collaborate on a project to make the ERP system more effective. The recommendations can then be implemented. Similar projects in the future will also have access to all past, pertinent information as a guideline for project goals and outcomes.

Creating A Collaborative Environment
Collaboration is usually seen as employees working together toward some common goal. In most cases, this collaboration is a conscious process by each employee. Teams are created and the process begins. In this case, the creation of teams forces the collaborations. According to KPMG's Turillo, companies should strive for much more than this type of collaboration.

"Companies collaborate, but the collaboration occurs after the event is defined. The team is established and the team members begin to work together. Most companies will define this as collaboration," states Turillo. "I want to create a collaborative environment that, in and of itself, is the way we work."

The process of sharing information has always been in place. A document sent through the mail can be considered sharing information. An employee searching through desks for a file and handing it to another employee is also sharing information.

"Knowledge sharing is the ability for me to go into a file cabinet, unaided, and find the information for which I am looking. That is the 'paradigm shift' I am promoting. The shift is for individuals to have information when they need it and in the context they need it," says Turillo. "It may sound like semantics, but there is a big difference between knowledge management collaboration and simple collaboration," says Turillo.

To further illustrate his point, Turillo envisions collaboration to be a living process within a company. For example, a team of employees may collaborate on a company audit. That team may increase leading up to April 15th and decrease after the tax deadline. At a later date, some consultants might join the team. "In this environment, there is a threaded discussion that is ongoing. In today's environment, we assemble and disassemble teams every time a project is started and finished. There is no continuity," explains Turillo.

Justifying An Investment In Knowledge Management
The ability to access and share knowledge within a company certainly has benefits. But, for a company to justify the investment in a knowledge management system, the company wants a substantial return on investment (ROI). Because a knowledge management system allows employees to have information in context, this usually results in quicker and more informed decisions that can be translated into hard-dollar benefits.

For example, Open Text's Letendre says one of his company's clients is an oil and gas company which lays pipeline throughout Canada. Laying this pipeline is a massive project that requires the involvement of many people throughout the organization. One step in the project is to get regulatory approval. "Getting regulatory approval was often a source of delay because it was difficult to get input from every person that needed to be involved," explains Letendre.

A knowledge management system allowed every member of the project team to have access to information in a context that was beneficial. A workflow process was also established so members could track the progress of different parts of the project. "The project team used to use e-mail to share information, but no one knew if they were looking at the most recent information. Also, a team member might be out of town and the information flow bogged down. This caused confusion and delay," says Letendre. "A knowledge management system helped the oil and gas company save several million dollars on various projects."

Another example of improved productivity might also be seen in a company's sales department. A company with 15 salespeople might have one salesperson who is really exceptional. "That salesperson has tacit knowledge, which is difficult to articulate," comments Davis of Hyperknowledge. "But, if you could capture that knowledge and have all the salespeople using it, the productivity payoff would be significant."

This productivity increase can be demonstrated in a typical customer service center. This center has three levels of expertise. The first level is the people answering the phone calls. These people have limited expertise. Calls that cannot be answered at the first level are transferred to the second level people who have more expertise. Finally, the ultimate experts reside on the third level and make the final decision on the most difficult problems. "If you can get that level three knowledge in the level one operator, a company can show a dramatic level of improvement," adds Davis.

Get Support From The Highest Level
A knowledge management system is a fundamental change in how an organization operates. But this system also represents a major cultural change as well. Knowledge management is not just automating processes within a company, but capturing existing knowledge and creating new knowledge. Some employees may not be ready to take this step. "Some employees do not want to surrender their knowledge. It's what makes them valuable. They don't want to give it up," comments Letendre.

In order to facilitate this cultural change, Davis says organizations must buy into knowledge management at the highest levels. "A good way to determine if a knowledge management system will be effective is whether or not the chief executive buys into it. If an executive is influenced by Peter Drucker, then there is a good chance that a company can realize the benefits of a knowledge management system," says Davis. "In some companies, the knowledge management believers are at lower levels in the company. In these cases, the implementations have a tendency to struggle."

The Future Of Knowledge Management
The growth of knowledge management can best be viewed from a higher level, says KPMG's Turillo. On a day-to-day basis, it is often difficult to see the strides that knowledge management has made in organizations. However, looking at the progress of knowledge management on a quarterly basis will show more dramatic results. "You have to stand back to really see the change that is taking place," says Turillo. "And, I believe, this change is irreversible."

The ultimate goal of knowledge management is not to be a technology or a category. It is to be an invisible part of how a company operates. "If we are still talking about knowledge management as a discipline in five years, I think we will have failed," relays Turillo. "Knowledge management has to be engrained in everything an organization does. It has to cease to become an identifiable act and simply be a natural part of an organization."