Download MBA HRM 3rd Semester HRM in Knowledge Based Organizations Notes

Download MBA HRM (Human Resource Management) (Master of Business Administration) 3rd Semester HRM in Knowledge Based Organizations Notes

UNIT ? I



LIFE IN ORGANIZATIONS

People have always been central to organizations, but their strategic importance

is growing in today`s knowledge-based organizations. An organization`s success

increasingly depends on the knowledge, skills, and abilities of employees,

particularly as they help establish a set of core competencies that distinguish an

organization from its competitors. When employees` talents are valuable, rare,

difficult to imitate and organized, an organization can achieve a sustained

competitive advantage through people. Advanced technology has given rise to

reduced number of jobs that require little skill and has increased the number of

jobs that require considerable skill, thus a shift is taking place from touch labour

to knowledge work. This displaces some employees and requires that others be

retrained. In addition, information technology has influenced HRM through

human resources information systems (HRIS) that streamline the processing of

data and make employee information more readily available to managers.

Both proactive and reactive change initiatives require HR managers to work

with line managers and executives to create a vision for the future, establish an

architecture that enables change, and communicate with employees about the

processes of change. In order to contain costs, organizations have been

downsizing, outsourcing and leasing employees, and enhancing productivity.

HR`s role is to maintain the relationship between a company and its employees,

while implementing the changes. The workforce is becoming increasingly

diverse and organizations are doing more to address employee concerns and to

maximize the benefit of different kinds of employees. Demographic changes,

social and cultural differences, and changing attitudes towards work can provide

a rich source of variety for organizations. But to benefit from diversity,
managers need to recognize the potential concerns of employees and make

certain that the exchange between the organization and employees is mutually

beneficial. Through strategic planning, organizations set major objectives, and

develop comprehensive plans to achieve those objectives. Once the strategy is

set, executives must make primary resource allocation decisions, including those

pertaining to structure, processes, and human resources.

Companies such as Domino`s Pizza, Sony, Southwest Airlines, and Wal-Mart

revolutionized their industries by developing skills ? core competencies ? that

others didn`t have. These competencies helped them gain advantage over their

competitors and leverage this advantage by learning faster than others in their

industries. Underlying a firm`s core competencies is a portfolio of employee

skills and human capital. In any given organization, different skill groups can be

classified according to the degree to which they create strategic value and are

unique to the organization. Core knowledge workers. This group of employees

has firm-specific skills that are directly linked to the company`s strategy e.g.,

R&D scientists in a pharmaceutical company, computer scientists in a software

development company. These employees are typically engaged in knowledge

work that involves considerable autonomy and discretion. Companies tend to

make long-term commitments to these employees, investing in their continuous

training and development and perhaps giving them an equity stake in the

organization.

Traditional job-based employees. This group of employees has skills that are

quite valuable to a company, but not unique e.g., sales people in a department

store, truck drivers for a courier service. These employees are employed to

perform a predefined job. As it is quite possible that they could leave to go to

another firm, managers frequently make less investment in training and

development and tend to focus more on paying for short-term performance

achievements. Contract Labour. This group of employees has skills that are of
less strategic value and generally available to all firms e.g., clerical workers,

maintenance workers, staff workers in accounting and human resources.

Individuals in these jobs are increasingly hired from external agencies on a

contract basis, and the scope of their duties tends to be limited. Employment

relationships tend to be transactional, focused on rules and procedures, with very

little investment in development.

Alliance/partners. This group of individuals has skills that are unique, but not

directly related to a company`s core strategy e.g., attorneys, consultants, and

research lab scientists. Although companies perhaps cannot justify their internal

employment, given their tangible link to strategy, these individuals have skills

that are specialized and not readily available to all firms. As a consequence,

companies tend to establish longer-term alliances and partnerships with them

and nurture an ongoing relationship focused on mutual learning. Considerable

investment is made in the exchange of information and knowledge.

An increasingly vital element of strategic planning for organizations that

compete on competencies is determining if people are available, internally or

externally, to execute an organization strategy. Managers have to make tough

decisions about whom to employees internally, whom to contract externally, and

how to manage different types of employees with different skills who contribute

in different ways to the organization. Human resource planning plays an

important role in helping managers weigh the costs and benefits of using one

approach to employment versus another.

Changes in the external environment have a direct impact on the way

organizations are run and people are managed. Environmental Scanning is the

systematic monitoring of the major external forces influencing the organization.

Managers attend to a variety of external issues; however, the following six are

monitored most frequently :
Economic factors, including general and regional conditions.

Competitive trends, including new processes, services, and innovations.

Technological changes, including robotics and office automation.

Political and legislative issues, including laws and administrative rulings.

Social concerns, including child care and educational priorities.

Demographic trends, including age, composition, and literacy.

By scanning the environment for changes that are likely to affect an

organization, managers can anticipate their impact and make adjustments

proactively. In a rapidly changing environment, it is extremely dangerous to be

caught off guard. The labour-force trends illustrate the importance of monitoring

demographic changes as a part of human resource planning. Such changes can

affect the composition and performance of an organization`s workforce.

In addition to scanning the external environment, organizations such as Syntex,

Lotus Development, and Southwest Airlines are careful to also scan their

internal environments. Because these companies view their employee-oriented

cultures as critical to success, they conduct cultural audits to examine the

attitudes and activities of the workforce. Sears has found that positive employee

attitudes on ten essential factors ? including workload and treatment by

superiors ? are directly linked to customer satisfaction and revenue increases.

Cultural audits essentially involve discussions among top-level managers of how

the organization`s culture reveals itself to employees and how it can be

influenced or improved. The cultural audit may include such questions as :

How do employees spend their time?

How do they interact with each other?

Are employees empowered?
What is the predominant leadership style of managers?

How do employees advance within the organization?

By conducting in-depth interviews and making observations over a period of

time, managers are able to learn about the culture of their organization and the

attitudes of its employees. Cultural audits can be used to determine whether

there are different groups, or subcultures, within the organization that have

distinctly different views about the nature of work the quality of managers, and

so on. Any knowledge management strategy designed to improve business

performance must address three components : the work processes or activities

that create and leverage organizational knowledge; a technology infrastructure

to support knowledge capture, transfer, and use; and behavioral norms and

practices (organizational culture) that are essential to effective knowledge use.

Even though the economic incentives are becoming clearer and technological

capabilities now exist to support knowledge-based organizations, pioneers in

knowledge management are finding the behaviours supported by their existing

organizational cultures to be a major barrier to this transformation. In short, the

organizational knowledge and culture are intimately linked, and that

improvements in how a firm creates, transfers, and applies knowledge are rarely

possible without simultaneously altering the culture to support new behaviours.

CONCEPT AND CHARACTERISTICS OF KBOs

The definition of the knowledge-based organization is centered around three

attributes : its principal mission is to acquire, manipulate and deploy information

and knowledge; it strives to be a learning organization in which its members,

both individually and collectively, are continuously enhancing their capacity to

produce results and adapt to changing circumstances; and it is guided by a

commitment to organizational excellence through such pursuits as bench-

marking, best practices and the fostering of collaborative relationships among its
various stakeholders. Knowledge organizations have been characterized as

enterprises in which the key asset is knowledge. Their competitive advantage

comes from having and effectively using knowledge. Examples include the law

office, accounting firm, marketing firm, software company, most of the

government agencies, universities, the military, and significant parts of most of

the manufacturing companies, whether they make cookies or cars.

A knowledge-based organization has four characteristics which can be

summarized in terms of process, place, purpose and perspective. Process refers

to the activities within an organization, some of which are directly involved with

making a product or selling a service and others that are ancillary but no less

important. Place refers to the boundaries of the organization, which for the

purpose of sharing and creating knowledge often go beyond traditional legal

boundaries. Purpose refers to the mission and strategy of the organization ? how

it intends to profitably serve its customers. Perspective refers to the worldview

and culture that influences and constrains the decisions and actions of an

organization. Each of these elements forms a basis for evaluating the degree to

which knowledge is an integral part of the organization and the way it competes.

Executives who understand how the four elements interact will be able to start

changing their companies to take advantage of the vast intellectual assets hidden

bellow the surface.

Process : Knowledge Sharing and Creation

Most organizations are primarily focused on the concrete and observable

activities that make up what they do on a day-to-day basis. A knowledge-based

organization attends to two related processes that underlie these direct processes:

the effective application of existing knowledge and the creation of new

knowledge. The goal is fourfold: to ensure that knowledge from one part of a

company is applied to activities in other parts; to ensure that knowledge is
shared over time so that the company benefits from past experience; to make it

possible for people from various parts of the organization to find each other and

collaborate to create new knowledge; and to provide opportunities and

incentives for experimentation and learning.

Consider how a company whose process for making its main product has been

essentially unchanged for more than 100 years ? Holcim, one of the world`s

largest suppliers of cement ? took on this challenge. The company operates

more than 100 cement-manufacturing facilities, 240 quarries and 600 mixed-

concrete facilities in over 70 countries. Although it functions in a highly

decentralized manner (country managers have the authority to make many

decisions on their own), Holcim realized several years ago that the exchange of

knowledge and expertise is the glue that holds the company together. It now

explicitly regards knowledge as its key resource and learning as its key

capability.

In order to make that view operational, an internal group, Holcim Management

and Consulting (now Holcim Group Support), was reorganized in 1996 to

develop, identify, transfer and apply strategic knowledge among all Holcim`s

entities worldwide. The group reports directly to the executive committee, a

clear indication of its strategic importance. In addition to facilitating interaction

among managers worldwide, Holcim Management and Consulting is itself a

repository of knowledge, expertise and best practices that it shares and reapplies

by consulting to the company`s various units. For example, energy costs are the

most expensive part of cement production, and Holcim Management and

Consulting helped plants improve process efficiency by diffusing knowledge

about how to use cheaper and more efficient fuels. A related problem facing

Holcim has been the need to reduce carbon dioxide emissions, as part of its

strategy to be a responsible corporate citizen promoting worldwide sustainable

development.
Holcim Management and Consulting helps Holcim to document and transfer

new energy-related technologies and manufacturing methods among the

company`s plants worldwide. Company engineers and managers have, therefore,

invested effort in learning more about alterative fuels. For example, Holcim

Switzerland developed the use of waste plastic, used tyres, and dried sewerage

sludge as replacement fuels alongwith the technologies to burn them cleanly. In

addition, the company has enjoyed product innovation (possible even with

cement) as plants experimented with various admixtures to vary and improve the

properties of cement for different local market applications. Even though it

makes a simple, industrial-age product, Holcim is clearly operating as a

knowledge-based organization.

Place : Knowledge Boundaries

Knowledge creation and sharing in today`s economy are not bound by the

traditional physical and legal limits of the corporation. Companies are

increasingly realizing that knowledge is often produced and shared as a by-

product of daily interactions with customers, vendors, alliance partners and even

competitors. The knowledge-based organization, then, is a collection of people

and supporting resources that creates and applies knowledge via continued

interaction. Its boundaries are blurred, malleable and dynamic. At some point,

the knowledge-based organization stops worrying about who works for whom

and focuses instead on who needs to work with whom. For example, the field-

service technicians at Buckman Labs, an international specialty chemicals

company, spend more time on the premises of their customers than at Buckman

offices.

Similarly, when Procter & Gamble was creating a new supply chain

management process with Wal-Mart, it sent several of its information

management people to work with their counterparts at Wal-Mart`s headquarters
so that they could mutually learn how to implement their vision of better sales

management via the sharing of information. Holcim built knowledge

communities within its global organization that transcended formal boundaries;

it also made the necessary investments to learn from customers. The knowledge-

based organization recognizes that the dangers of failing to share knowledge

across traditional boundaries outweigh any potential benefits that may come

from hoarding it.

Purpose: Knowledge Strategy

Even a highly effective set of knowledge management processes does not

guarantee that an organization will perform well or better than its competitors.

Only a few years ago Polaroid, for example, had generally effective processes in

place to capture and share knowledge about products, customers, applications,

technologies and the competitive environment. The culture was conducive to

sharing and cooperation, and the company had implemented a reasonably good

information system for supporting virtual collaboration. All in all, it appeared to

be managing knowledge well. The knowledge being created and shared,

however, was entirely focused on analog film and cameras. Polaroid knew little

about digital imaging and this contributed to its eventual bankruptcy.

Companies that succeed over the long term align their knowledge management

processes with their strategy. The knowledge-based organization recognizes that

knowledge is a key strategic resource, and asks what do we need to know to

formulate and execute our desired strategy? What do we know? And what do

our competitors know? The gap between what an organization knows and needs

to know focuses attention internally, just as the strengths and weaknesses

components of a SWOT analysis does. The gap between what it knows and what

its competitors know focuses attention externally on the opportunities and
threats. Companies must seek to close those knowledge gaps, both external and

internal, faster and more effectively than their competitors.

Holcim clearly recognized the strategic nature of its knowledge. Given its

strategy to provide the best quality and most innovative cement-based products

using the most efficient, sustainable and environmentally friendly processes, it

engaged the hearts and minds of its entire organization in managing the

knowledge and learning to support that strategy.

Perspective: The Knowledge Point of View

The knowledge-based organization, regardless of whether its products are

tangible or not, holds a knowledge-oriented image of itself. That is, it takes

knowledge into account in every aspect of its operation and treats every activity

as a potentially knowledge-enhancing act. It uses knowledge and learning as its

primary criteria for evaluating how it organizes, what it makes, where it locates,

who it hires, how it relates to customers, the image it projects, and the nature of

its competition.

Buckman Labs has the knowledge perspective. The company started in 1945

manufacturing chemical microbicides ? products that would kill or control the

growth of microbes in pulp and paper manufacturing and leather treatment. Over

time, however, it realized that its products were becoming commodities and that

to stay competitive it would need to deliver knowledge-based services. To

support that strategy, Buckman implemented processes, technologies, training

and incentives to promote the development, sharing and delivery of knowledge

about how to actually apply microbicidal chemicals to solve customers`

treatment problems.

The company has continually refreshed its strategic knowledge and directs all

activity toward learning as much as possible about its customers. This approach

culminated in the decision to learn more about how to manage the chemistry of
their customers` plants than even its customers knew. In the late 1990s,

Buckman undertook to learn about customers` operations in detail, the

economics of their businesses, and their strategic direction ? a tall order for a

bunch of chemists.

To accomplish this learning, the company first implemented a business-oriented

training program tailored to the specifics of their customers` industries. It then

entered into a learning partnership with a major paper manufacturer. For a fixed

fee, Buckman became the exclusive provider of all chemicals and treatment

services the manufacturer needed. Though sales technicians were formerly

rewarded for selling as much chemical products as possible, now they were

rewarded for minimizing chemical use. They were free to use any product,

regardless of who made it, that created the most efficient and effective customer

operation. In return, Buckman gained exclusive access to the customer and thus

the opportunity to learn more about how to service that segment of the market

than any of its competitors.

Buckman now considers itself to be in the knowledge business : Chemicals are

merely the tangible tip to their knowledge iceberg. Many other companies in

recent years have made a similar transition in perspective by redefining their

fundamental mission from one based on selling traditional products and services

to one based on exploiting knowledge.

If knowledge is a raw resource, who should benefit from it? A close link

between knowledge and power has widely been recognized. For example, the

World Health Organization states that as a knowledge-based organization in an

environment where knowledge has become a raw material, serious consideration

should be given to how such knowledge is managed, disseminated and used.

Integrity and value-based leadership are recurring themes in the case of

knowledge-based organizations. Also relevant in this context is the attention
paid by the organizations to the pursuit of excellence in their work. In the

majority of cases, this involves a commitment to engage in research and

programming which is of a supervisor quality, and addresses the actual needs

and priorities of the target population.

In a May 1997 report prepared for the International Institute for Sustainable

Development, Geoffrey Oldham and Rob McLean suggested that knowledge

activities encompass five distinct dimensions : knowledge creation, knowledge

acquisition, knowledge assimilation, knowledge use, and knowledge

dissemination. Turning to issues related to knowledge creation and acquisition,

the organizations dedicate considerable resources either to the execution of

research, thereby generating new knowledge, or to scoping exercises designed to

identify and gather relevant information generated elsewhere. However, the

means by which they pursue these activities vary considerably from organization

to organization. In a large measure, this variance can be explained by differences

in funding base and mandate.

Knowledge creation is not the only challenge facing the organizations.

Knowledge assimilation, which might also be termed knowledge management,

is arguably of equal importance, since this is what allows one to exploit the

information generated, and ensure that it is accessible when and where it is

needed. For example, International Development Research Center (IDRC) acts

principally as a sponsor of research carried out by outside experts, though it also

engages in a range of information gathering activities. The latter includes the

maintenance of an extensive library collection along with the development of

information systems to document and evaluate center activities, and to preserve

a corporate memory. Deployment and use of new information technology is one

way in which organizations can effectively manage their knowledge base, and

the International Development Research Center in particular has been a world

leader in this area.
Not surprisingly, knowledge creation and acquisition is also a priority for the

World Health Organization. A particularly noteworthy example in this area is its

Evidence and Information for Policy (EIP) Cluster, a programme established in

1998 with a mission to strengthen the scientific and ethical foundations of health

policies and programmes so that they respond better to the needs of populations.

With an emphasis on building effective partnerships, the EIP cluster compiles,

analyses, and disseminates an evidence base on the major dimensions of health

and health systems. Organizational learning is an important dimension of

knowledge assimilation. In short, if an organization is to continue to generate

new knowledge, or put existing knowledge to work, its members must have an

understanding of key issues and be able to relate them to the organization`s

mandate. In the case of United Nations Development Fund for Woman

(UNIFEM), for instance, it prides itself on having put into place a feedback

process of pioneering, learning, information-sharing and advocacy.

Closely related to the issue of knowledge assimilation is knowledge use and

dissemination. While the organizations exploit their knowledge resources in a

wide variety of ways, they can nonetheless be categorized in the following

manner:

Dissemination of knowledge resources (e.g., research reports,

activity or status reports, policy statements) to a general audience

through mass media channels e.g., Internet, wide circulation

publications.

Dissemination of knowledge resources to a limited audience e.g.,

policy makers, politicians and experts through selective channels

e.g., narrow circulation journals, conferences.

Use of knowledge resources for the purposes related to advocacy or

to the development of policies, programs or projects; and
Use of knowledge resources for the purposes related to the

generation of new knowledge.

Dimensions of HRM in KBOs

Conventionally, acquisition, development, motivation and maintenance of

human resources are seen as four major dimensions of human resource

management with quality of work life, productivity and readiness for change as

outputs. In 1983, American Society for Training and Development identified

nine human resource areas, which were considered by them as spokes of the

Human Resource wheel. Each area affected the outputs which were placed in the

center of the wheel. The human resource areas identified by ASTD were :

Training and Development, Organization Development, Organization/Job

Design, Human Resource Planning, Selection and Staffing, Personnel Research

and Information Systems, Compensation/Benefits, Employee Assistance, and

Union/Labour Relations. Although line managers and HR managers need to

work together, their responsibilities are different, as are their competencies and

expertise. The dimensions of human resource management can also be

understand in terms of the major activities for which an HR manager is typically

responsible, such as Advice and Counsel, Service, Policy Formulation and

Implementation, and Employee Advocacy.

1.

Advice and Counsel : The HR manager often serves as an in-house

consultant to supervisors, managers and executives. Given their

knowledge of internal employment issues (policies, labour

agreements, past practices, and the needs of employees) as well as

their awareness of external trends (economic and employment data,

legal issues, and the like), HR managers can be an invaluable

resource for making decisions. As in-house consultants, HR

managers should be concerned with the operating goals of the
managers and supervisors. In turn, these managers must be

convinced that the HR staff is there to assist them in increasing their

productivity rather than to impose obstacles to their goals. This

requires not only the ability on the part of the HR executive to

consider problems from the viewpoint of line managers and

supervisors but also skill in communicating with the managers and

supervisors.

2.

Service : HR managers also engage in a host of service activities,

such as recruiting, selecting, testing, planning and conducting

training programs and hearing employee concerns and complaints.

Technical expertise in these areas is essential for HR managers and

forms the basis of HR program design and implementation.

3.

Policy Formulation and Implementation : HR managers generally

propose and draft new polices or policy revisions to cover recurring

problems or to prevent anticipated problems. Ordinarily, these are

proposed to the senior executives of the organization, who actually

issue the policies. HR managers may monitor performance of line

departments and other staff departments to ensure conformity with

established HR polices, procedures, and practice. Perhaps more

importantly, they are a resource to whom managers can turn for

policy interpretation.

4.

Employee Advocacy : One of the enduring roles of HR managers is to

serve as an employee advocate ? listening to the employee`s

concerns and representing their needs to managers. Effective

employee relations provides a support structure when disruptive

changes interfere with normal daily activities.


In the process of managing human resources, increasing attention is being given

to the personal needs of the participants. Increasingly, employees and the public

at large are demanding that employers demonstrate greater social responsibility

in managing their human resources. Complaints that some jobs are devitalizing

the lives and injuring the health of employees are not uncommon. Charges of

discrimination against women, minorities, the physically and mentally disabled,

and the elderly with respect to hiring, training, advancement, and compensation

are being leveled against some employees. Issues such as comparable pay for

comparable work, the high cost of health benefits, day care for children of

employees, and alternative work schedules are concerns that many employers

must address as the workforce grows more diverse. All employers are finding

that privacy and confidentiality of information about employees are serious

matters and deserve the greatest protection that can be provided.

Top management generally recognizes the contributions that the HR program

can make to the organization and thus expects HR managers to assume a broader

role in the overall organizational strategy. In view of this, HR managers need to

acquire a complementary set of competencies. HR professionals need to know

the business of their organization thoroughly. This requires an understanding of

its economic and financial capabilities so that they can join the team of

business managers. It also requires that HR professionals develop skills of

external relations focused on their customers. HR professionals are the

organization`s behavioral science experts. In the areas, such as staffing,

development, appraisal, rewards, team building and communication, HR

professionals should develop competencies that keep them abreast of changes.

HR professionals have to be able to manage change processes so that HR

activities are effectively merged with the business needs of the organization.

This involves interpersonal and problem-solving skills, as well as creativity and

innovativeness.
HR professionals must establish personal credibility in the eyes of their internal

and external customers. Credibility and trust are earned by developing personal

relationships with customers, by demonstrating the values of the firm, by

standing up for one`s own beliefs, and by being fair-minded in dealing with

others. The ability to integrate business, HR and change competencies is

essential. By helping their organizations build a sustained competitive advantage

and by learning to manage many activities well, HR professionals are becoming

full business partners. Forward-looking CEOs make certain that their top HR

executives report directly to them and help them address key issues. At lower

levels in the organization, a rapidly growing number of companies assign HR

representatives to business teams to make certain that HR issues are addressed

on the job and that HR representatives, in turn, are knowledge about business

issues rather than simply focusing on the administrative function.

NEW ROLES AND CHALLENGE FOR HRM IN KBOs

Roles of the HR Function

How is the HR function being affected by the growing importance of knowledge

capital, and why should HR managers be concerned about it. One reason is that

people-related issues are the key to knowledge capital. No organizational

function is better suited to spearhead the maximization of knowledge capital

than the HR function. Cultivating knowledge capital requires concerted action

in all areas of the HR function at once. In the context of this trend, compliance-

oriented practitioners resist change, supporting the old command-and-control

structures of the past, which only frustrate the development of knowledge capital

by creating a work environment that diminishes the value of individual

creativity and motivation. Supporters are passive, doing only what they are told.

Since line managers are not usually as knowledgeable about the formal

processes related to people issues as are HR practitioners, HR practitioners
operating from a supporter role will only continue to do what has been done in

the past.

Performance consultants are analytical, applying skills to specific situations in

which they troubleshoot problems or discover opportunities. They can create

situations that will develop individuals and groups, but their approach is often

too tactical to be felt by the organization on a strategic level. They must be

cognizant of the business issues facing the organization and the capabilities of

people to confront them. This requires more than a tactical approach. HR

leaders are proactive, taking initiative to influence others to achieve competitive

advantage through the human side of the enterprise. HR leaders are thus best

suited to encourage managers and other stakeholders to think about people as

creators of wealth rather than as expenses. HR leaders may also involve top

managers or other key stakeholders in group activities that can help them think

about how the growing importance of knowledge capital affects the HR

function, components of the organization or the organization as a whole, the

causes of those changes, their likely consequences, and HR action plans or

strategies needed to address those changes.

What Business Needs Require Change from the HR Function? To remain

competitive in the future, businesses need to find ways to make the most of

human talent and creativity. While this goal certainly requires flexible and

adaptable HR systems and processes, business trends facing organizations are at

the centre of this HR change endeavour. By understanding these trends, HR

practitioners can develop processes that enrich the knowledge capital of their

organizations.


What Changes are Needed from Each HR Functional Area? It needs to be

examined that how each HR functional area can make an impact on business

operations while dealing with the growing importance of knowledge capital.

Rewards and Recognition: People must be rewarded for cultivating knowledge

that is useful to the organization. That may mean that decision makers will need

to explore such strategies as pay-for-knowledge programs in which individuals,

and groups, are rewarded for cultivating valuable competencies of use to the

organization. In addition, non-pay-related incentives can be used to reward the

attainment and use of knowledge capital, such as promotion, title differentiation,

access to or membership in special teams or task force efforts, and nomination to

attend special development programs.

Employee Relations: Employee communications programs, vital to employee

relations, should be launched to show employees and managers alike what is

meant by knowledge capital, how it applies to them individually, why it is

important to the organization, what happens when knowledge capital is not

cultivated or developed, and how knowledge capital can be developed and

evaluated. Above all, employees must be informed that developing work-related

knowledge is key to the success of the business, and to their career security at a

time when jobs are disappearing. Employees have a self-interested and self-

directed role to play in their own development, and they should be told what that

is ----- and, when necessary, how to take proactive steps to develop themselves

for future career growth inside or outside the organization. Job security can best

be enhanced by profitability and growth. To work toward this security,

employees need information about the business environment, the industry, and

the organization`s finances for informed decision making.

Organizational Effectiveness: Organizations need to launch programs that

encourage learning and knowledge acquisition. By pursuing efforts to create
learning organizations and high-performance workplaces, decision makers can

set the right tone to support continued individual and team growth and

development. Changes in company culture do not occur overnight, so it is

important to establish a track record of experiences in the organization to show

that development and creativity do matter and are considered in pay raises,

promotions, work assignments, and other issues of importance to employees.

Organizational effectiveness is enhanced when people have targets of focus.

What a better target than effectively servicing a customer or beating the

competition? Knowledge attainment centered around such endeavours can

change a corporate culture.

Professional Development: Training and development is a key means by which

to groom individuals for the future. Training is, of course, an individualized

change effort that is designed to narrow gaps between what people know or do

and what they should know or do to be successful. Training has also been

associated more recently with efforts to generate creative solutions to difficult

problems farcing organizations. Training-related activities are likely to lead

organizational efforts to build and maintain competitive knowledge capital. HR

will be responsible for maximizing the productivity of the workforce through

initiatives that build organization community. Well-educated and well-trained

workforce will be deployed, and HR practitioners will be required to function as

consultants, not as police officers. Training can be used to build a sense of

community by facilitating cohesive performance by work teams. It can also be

used to enhance communication by providing information about the reasons to

take action and by articulating approaches to individual development.

Training can be used to show people how to become more self-directed in their

approaches to learning on their own, and to fostering the development of others

in the organization. Training can be used to direct attention to a broad array of

human performance improvement strategies that can be used to develop bench
strength, troubleshoot human performance problems, and seize human

performance improvement opportunities. Money spent on professional

development efforts has increased over the past decades. Yet, expectations by

organizations have changed concerning the return on investments of such

efforts. Professional development providers are thus having to take both an

individual and organizational view of these development efforts.

Resource and Productivity Management: Although defined differently by

various experts, HR planning is often characterized as long-term planning for

the people needed by an organization. It is perhaps the single most important

issue to consider in building knowledge capital. While HR planning has

traditionally been focused on identifying and closing current and projected gaps

in headcount, shortfalls between labour demand and supply, it can also be

focused on identifying and acting to close present or future gaps in talent,

shortfalls between present and future talent demand and supply. One way that

HR can lead the way towards building human capital is to introduce and use a

systematic approach to HR planning in the organization. Too many

organizations many needs from vacancy to vacancy. But with HR planning, an

organization`s decision makers can link corporate core competencies directly to

individual competencies and work to build them over time.

An effective HR planning process can also be useful in conducting strategic

planning for HR, bringing a systematic approach to succession planning,

integrating HR functions horizontally around meeting desired HR needs, and

providing information about current or anticipated overdrafts in human

capital. In order to tap into the knowledge capital of an organization, senior

leaders first need to know where and with whom it resides. This is the job of

HR function ? to track and identify knowledge communities and match them

with the needs of the business. This task must be done for both current and

future knowledge capital requirements. Once the task is accomplished, only
then can the HR function be deployed appropriately within the organization to

address both now and then business issues.

Recruiting and Staffing : Recruiting and selecting people are also central to

building knowledge capital. After all, the individuals chosen by the

organization affect its supply of knowledge capital, the competencies on which

it can draw to meet business objectives. HR practitioners must find ways to

achieve the following:

Recruit and select the right talent to meet pressing organizational needs.

Retain the right talent once it is available

Leverage the talent through appropriate uses of rotations, temporary and

permanent team assignments, transfers, and promotions so that the

organization`s knowledge capital is brought to bear on the most pressing

challenges.

These goals may require focusing on specific universities, competitors, or other

talent pools to attract people with the specific competencies needed to help

address business trends.

Challenges and Opportunities

In an era of globalization and rapid technological change, the prospects for

knowledge-based organizations would appear to be bright. Certainly, Internet

based communications and plummeting information processing costs provide

ample opportunities in such areas as research, networking and information

management. However, by the same taken, the organizations face challenges in

a number of areas.

How can funding affect the vision of a knowledge-based organization? Funding

availability is a case in point. Stability of funding remains a concern. Funding
that pushes institutions from crisis to financial crisis works against the

development of a strategic posture and leads to weaker rather than stronger

institutions.

How do information overload and uncertainty affect the viability of a

knowledge-based organization? With the rapid growth of Internet and computer

processing power, another challenge often facing knowledge-based

organizations is the over-abundance of information, or information of an

uncertain quality.

How does data quality affect the vitality of knowledge-based organizations?

Also relevant in this regard is the issue of data quality. That is to say, for an

organization to remain credible, it must be assured of the accuracy,

comprehensiveness and relevance of the information it is using to implement

projects or formulate policy options. For example, the Australian Indigenous

Health Info Net addresses quality assurance in two main ways. First, they have

documented procedures for all aspects of their day-to-day operations. These

procedures ensure that all materials have been subjected to quality control

checks before being added to their site. To complement their internal

procedures, they have established a network of Health Info Net Consultants,

whose functions include peer review of any substantial academic material to be

added to the site.

How does a knowledge-based organization maintain its visibility? While the

publication of such material on the Internet may be extremely useful to

academics, policy makers and other experts, its relevance is somewhat less

obvious to an individual living in a remote community without access to

adequate shelter, sewerage or health services. Accordingly, knowledge-based

organizations must grapple with the challenge of remaining relevant to their

constituencies at the risk of alienating them and losing their support. On one
hand, good leadership is critical in this regard, both in fostering constructive

relationships with community members, and in focusing organizational energies

in the ways which reflect constituents` concerns. On the other hand, feedback

mechanisms also provide a valuable means of ensuring that organizational

priorities are in harmony with community needs.

QUESTIONS FOR DISCUSSION

1.

Can different skill groups be classified in an organization? Discuss

various such groups to highlight the life in organization.

2.

What is environmental scanning? What are the external issues that

are frequently monitored by the managers? Discuss with appropriate

examples?

3.

What is cultural audit? Discuss its importance in a knowledge-based

organization.

4.

Discuss the characteristics of a knowledge-based organization in

terms of process, place, purpose and perspective.

5.

What are the dimensions of Human Resource Management in KBOs?

Discuss in detail.

6.

Discuss the roles of HR function in KBOs.

7.

Discuss the challenges faced by a knowledge-based organization.












Unit ? II

MANAGING KNOWLEDGE FOR ORGANIZATIONAL

EFFECTIVENESS

Process and Methods

Organizations face a number of important competitive challenges such as

adapting to global business, embracing technology, managing change,

responding to customers, developing intellectual capital and containing costs.

With these competitive challenges very important employee concerns, such as

managing diverse workforce, recognizing employee rights, adjusting to new

work attitudes and balancing work and family demands have emerged. Best

organizations go beyond simply balancing these sometimes, competing

demands; they create work environments that blend these concerns to

simultaneously get the most from employees, contribute to their needs, and meet

the short-term and long-term goals of the organization. For organization to be

effective, they need to identify the primary principle that support high

performance work systems. There are four powerful principles :

Shared information

Knowledge development

Performance ? reward linkage

Egalitarianism

These principles have become the building blocks for managers who want to

create high-performance work systems for organizational effectiveness.

The Principle of Shared Information : The principle of shared information is

critical for the success of empowerment and involvement initiatives in an

organization. Traditionally, employees were not given and did not ask for
information about the organization. People were hired to perform narrowly

defined jobs with clearly specified duties. Today organizations are relying on the

expertise and initiative of employees to react quickly to incipient problems and

opportunities without timely and accurate information about the business.

Employees can do little more than simply carry out order and perform their roles

in a relatively perfunctory way. They are unlikely to understand the overall

direction of the business or contribute to organizational success. On the other

hand, when employees are given timely information about business performance

plans and strategies, they are more likely to make good suggestions for

improving the business and to cooperate in major organizational changes. They

are also likely to feel more committed to new courses of action, if they have

input in the decision making. The principle of shared information typifies a shift

in organizations away from the courses of command and control towards

employee commitment. If executives do a good job of communicating with

employees, and create a culture of information sharing, employees are more

likely to work towards the achievement of goals for the organization.

The Principle of Knowledge Development: In today`s scenario number of jobs

requiring little knowledge and skill is declining while the number of jobs

requiring greater knowledge and skill is growing rapidly. As organizations

attempt to compete through people, they must invest in employee development.

This includes both selecting the best and brightest candidates available in the

labour market and providing all employees opportunities to continually hone

their talents. In the contemporary work environment employees need a broad

range of technical, problem solving and interpersonal skills to work either

individually or in teams on cutting-edge projects. Because of the speed of

change, knowledge and skills requirements must also change. Employees must

learn continuously. Stop gap training programs must not be enough. Employees
need to learn real time, on the job, using innovative new approaches to solve

novel problems.

The Principle of Performance ? Reward Linkage: In an organization people

may intentionally or unintentionally pursue outcomes that are beneficial to them

but not necessarily to the organization as a whole. Things tend to go more

smoothly when there is some way to align employee and organizational goals.

When rewards are connected to performance. Employees will naturally pursue

outcomes that are mutually beneficial to themselves and the organization.

Supervisor may not have to constantly watch to make employees do the right

thing. In fact employees may go out of their way above and beyond the call of

duty, to make certain that co-workers are getting the help they need, systems and

processes are functioning efficiently and customers are happy. Connecting

rewards to organizational performance also ensures fairness and tends to focus

on employees in the organization. Equally important, performance based

rewards ensure that employees share in the gains that result from any

performance improvement.

The Principle of Egalitarianism

Status and power differences tend to separate people and magnify whatever

disparities exist between them. The US versus them battles that have

traditionally been there between managers, employees and labour unions have to

be replaced by more cooperative approaches for managing work. More

egalitarian work environments eliminate status and power differences and in the

process, increase collaboration and teamwork. When this happens, productively

can improve if people who once worked in isolation begni to work together.

Moving power downward in organizations that is, empowering employees

frequently requires structural changes. Managers often use employee surveys,

suggestion systems, quality circles, employee involvement groups that work in
parallel with existing organizational structure. In addition work flow can be

redesigned to give employees more control and influence over decision making.

Job enlargement, enrichment and self managing work teams are typical methods

for increasing the power. Employees can influence decisions and make

suggestions for change. With decreasing power distances, employees can

become more involved in their work, their quality of work life is simultaneously

increased and organizational performance is improved. One cannot claim that

there is a fool proof list of best practices that can be implemented by every

organization for every work situation, yet there are clean trends in work design,

HR practices, leadership role and information technologies that can increase

organizational effectiveness.

Work-Flow Design and Teamwork: Total Quality Management (TQM) and

reengineering have driven many organization to redesign their work-flow.

Instead of separating jobs into discrete units, most experts now advise

managers to focus on the key business process that derive customer value

and then create teams that are responsible for those processes. Federal

Express, for example, redesigned its delivery process to give truck drivers

responsibility for scheduling their own routes and for making necessary

changes quickly. Because the drivers had detailed knowledge of customers

and routes, Federal Express managers empowered them to inform existing

customers of new products and service. In doing so, drivers also filled a type

of sales representative role for the company. In addition, FedEx drivers also

worked together as a team to identify bottlenecks and solve problems of

slow delivery. To facilitate this, advanced communications equipment was

installed in the delivery trucks to help teams of drivers balance routes among

those with larger or lighter loads.

Complementary Human Resource Policies and Practices: work redesign,

in itself, does not constitute a high-performance work system. Other
supportive elements of HRM are necessary to achieve high performance.

Several studies suggest that both performance and satisfaction are much

higher when organizations combine their changes in work-flow design with

HR practices that encourage skill development and employee involvement.

By selecting skilled individuals with the ability to learn continuously and

work cooperatively, organizations are likely to make up for the time and

expense they invest in selection. Talented employees come up to speed more

quickly and take less time to develop. Organizations that do not adhere to

this are often seen at the risk of taking wrong people and spending more on

training and/or out placement, severance and recruitment and replacement.

Emphasis on Teamwork : involvement and continuous improvement

requires that employees develop a broader understanding of work processes

performed by others around them rather than rely on first knowing their own

jobs. To accomplish this, organizations increasingly use cross-training, that

is the training of employees in jobs in areas closely related to their own.

Another Important factor is the Compensation Package : Many

organizations experiment with alternative compensation plans. In order to

link pay and performance, high-performance work systems often include

some type of employee incentives. Organizational incentives such as gain

sharing, profit sharing, and employee stock ownership plans focus employee

efforts on outcomes that are beneficial to both themselves and the

organization as a whole. Some organizations also incorporate skill, based

pay plans. By paying employees on the basis of the number of different job

skills they hope to create both a broader skill base among employees and a

more flexible pool of people to rotate among interrelated jobs. Both of these

qualities are beneficial for organizational effectiveness and may justify the

added expense in compensation.
Management Processes and Leadership : With fever layers of management

and a focus on team based organization, the role of managers and

supervisors is substantially different in a environment of knowledge based

organizations. Managers and supervisors are seen more as coaches,

facilitators and integrators of team efforts. Rather than imposing their

demands on employees and closely watching to make certain that the

workers comply, managers share responsibility for decision making with

employees. Typically the team manager is replaced by the term team

leader`. And in growing number of cases leadership is shared among team

members.

In the literature of knowledge management, four components of knowledge

management architecture have been described. The analysis, plans and actions

are usually formulated in terms of the four basic operations of knowledge that

can be found in organizations` development, distribution, consolidation and

combination. The four basic knowledge processes are :



Developing Knowledge : Companies survive by the continuous

deployment of new knowledge based on creative ideas, the analysis of

failures, daily experiences and work in R&D departments. Corporate

memories can support these processes by recording failures and

successes.



Consolidating Knowledge : Knowledge must be safeguarded against loss

due to different cause (e.g., people retiring, documents that cannot be

accessed any more, etc). Consolidation could be supported by, for

instance, corporate memories, knowledge transfer programmes etc. The

knowledge, thus stored, must be available at the right time and place.



Distributing Knowledge : Knowledge must be actively distributed to

those who can make use of it. The turnaround speed of knowledge is
becoming crucial for the competitiveness of companies. To support this

process, corporate memories need a facility for deciding who should be

informed about a particular new piece of knowledge. Actions to improve

knowledge distribution include the installation of help desks and use of

intranets.



Combining Available Knowledge : An organization can only perform at

its best if all available knowledge areas are combined in its new

products. If an organization is unable to combine the knowledge

available, it will miss opportunities and eventually lose market share.

Products and services are increasingly being developed by multi-

disciplinary teams. Corporate memories may facilitate this by making it

easier to access knowledge management system in knowledge based

organization should involve the continuous streamlining of the above

four basic knowledge processes to improve the organization learning

capability.

KNOWLEDGE

KNOWLEDGE

GOALS

ASSESSMENT

KNOWLEDGE

KNOWLEDGE

IDENTIFICATION

RETENTION

KNOWLEDGE

KNOWLEDGE

ACQUISITION

UTILIZATION

KNOWLEDGE

KNOWLEDGE

DEVELOPMENT

DISTRIBUTION



Figure 1. Knowledge Management Framework
Source : Mohan Tanniru and Tom Lauer; Knowledge Audit and Knowledge

Management System; Infovision; New Dehli, Tata Infotech Limited; January

2002; pp 2-3.

Supportive Information Technology : Technologies of various kinds create an

infrastructure for communicating and sharing information vital to business

performance. There are the information needs for business plans and goals, unit

and corporate operating results, incipient problems and opportunities and

competitor`s performance.

Careful planning helps to make certain that the processes fit together and are

linked with the overall strategic goals of the organization. Horizontal fit occurs

when all the internal elements of the work system complement and reinforce one

another. For example, a first rate selection system may be of no use if it is not

working in conjunction with training and development activities. If a new

compensation program reinforces behaviours that are directly opposed to the

goals laid out in performance planning, the two components would be working

at cross-roads. Horizontal fit means testing to make certain that all the HR

practices, work designs, management processes and technologies complement

one another. The synergy achieved through overlapping work and human

resource practices is at the heart of what makes organization system effective.

To achieve vertical fit the work system must support the organization`s goals

and strategies. This has to begin with an analysis and discussion of competitive

challenges, organizational values and the concern of employees and results in a

statement of the strategies being pursued by the organization. Efforts to achieve

vertical fit help focus the design of performance work systems on strategic

priorities. Objectives such as cost containment, quality enhancement, customer

services and speed to market has a direct impact what is expected of employees

and the skills they need to be successful. Words such as involvement, flexibility,
efficiency, problem solving and teamwork are not just buzzwords. They get

translated directly from the strategic requirements of today`s organizations.

However, for all their potential, implementing is not an easy task. The systems

are complex and they require a good deal of close partnering among executives,

like managers, HR professionals, union representatives and employees.

Ironically, it is the very complexity that leads to competitive advantage.

INTELLECTUAL CAPITAL AND LEARNING ORGANIZATION

Intellectual Capital

Driven by changing technology, the increasing globalization of business,

increasing speed in market change, continuing cost containment and increasing

rate and magnitude of change itself, the need for intellectual capital is a key

trend facing businesses. The competitive environment requires that companies

levrage the knowledge and expertise of their employees to create and sustain

competitive advantage. The business world is moving too fast to rely on the

traditional command and control management style. Human creativity and talent

has to be realized to have quantum break through in innovation, productivity,

product and service quality and customer satisfaction.

Intellectual capital means the collective experience of an organization

workforce. It is the sum of information and linking generated by the human

resources in the organization. It includes the collective experience of an

organization workforce called institutional memory (what people remember

about what the organization has done in the past); the current mix of know-how

available to the organization, known as the talent pool (who is available to meet

the organization`s current challenges); and the future prospects of the

organization`s workforce to come up with innovative solutions to problems,

known as creativity (how well people in the organization are positioned to come

up with break through ideas to address past, present or future problems faced by
the organization. According to Peter Drucker (1997) knowledge capital is

important since it is different from all other kinds of resources. It constantly

makes itself obsolete, with the result that today`s advanced knowledge is

tomorrow`s ignorance and knowledge that matters is subject to rapid and abrupt

shifts from pharmacology to genetics in the health care industry for example,

and from PCs to the Internet in the computer industry. There can be little doubt

that knowledge capital, more than financial capital is growing in importance

(Bondreau and Ramstad, 1989). There are three major consequences that stem

from the growing importance of intellectual capital

The need to distinguish between technical and management compliancy

The increasing business and worker mobility

Increasing need for training

Need to Distinguish Between Technical and Management Competency

Successful manager must now possess several capabilities : technical expertise,

understanding of the dynamics shaping the market environment, ability to build

relationships inside and outside the company and ability to identify new

opportunities to enhance the company`s offerings (Vicene and Fulmen, 1996). If

companies hope to rely on knowledge workers to create competitive advantage,

then the decisions those workers make must be consistent with the company`s

values and purpose. Otherwise, these empowered employees will not make

decisions leading to company success. The challenges confronting executives

then, is to communicate the company`s values and purpose underlined. In

addition executives must hire and retain employees who demonstrate the ability

and willingness to act within the company`s values system. Only technical

proficiency is not sufficient to generate a good employee.
Increasing Business and Worker Mobility

Business goes where skills and knowledge are available, the new capitalism.

The decisive factor for industries in the developed world will be the productivity

of knowledge and knowledge workers because organization will be competing

based on knowledge and not on capital or technology. Because knowledge

workers are extremely mobile and the knowledge needs of an organization will

change rapidly, an increasing number of the most valuable people will identify

more with their own knowledge rather than with the organization. Many of these

people will not be employees of the organization but will serve as contractors,

consultants, experts and joint venture partners and the organizations are to be

defined for a specific task, time, place and culture and therefore, management of

knowledge resources will become the most important area of focus and

consequently management will have to extend beyond enterprises.

Increasing Need for Training

Another consequence of the trend toward the growing importance of knowledge

capital is an increasing, incessant need to educate workers. But education in a

business environment that prizes knowledge capital takes on new dimensions

that go beyond what training has meant in the past. Employees at all levels must

be educated to understand the market environment, the company`s strategy, and

their role in influencing the organization`s financial performance. Employee

education and training will become a forum to create broader perspectives and to

give employees a broader perspective in which to operate. The importance of

training in developing knowledge employees is underscored by the dramatic

increases in expenditures linked to all forms of training. In the midst of ever

increasing dynamics, people are required to do more, do it faster and do it with

less-resources. It is imperative for employees at all levels to possess a broad,

general management perspective and the ability to think strategically. Therefore,
companies are using education to derive strategic initiatives. Custom?designed

programming affords tailoring to the needs of the organization. Companies are

increasingly demanding immediate applicability resulting in the growth of

action learning and on the job techniques, any where, anytime asynchronous

distance education and less time away from the job for training and education

while organization understands the need to educate the workforce to enhance

knowledge capital. Many organizations want to ensure that they are getting a

quick nature on training investments.

KNOWLEDGE AND ROLE RELATED ISSUE

The greatest opportunity resulting from the growing importance of knowledge

capital is the possibility that organization can seize competitive advantage by

finding ways to leverage and exploit worker`s knowledge. Those organization

which are best able to collect market intelligence, harness and unleash worker

creativity, translate startingly innovative ideas into valuable product and service

offerings and get these products and services quickly to dynamic market do

definitely succeed. Organizations that cannot meet these challenges and cling to

the bureaucratic, controlling, un-imaginative and (for employees) frustrating

approach of the past will fail and go bankrupt or will be merged with other,

more successful firms.

Today, business Organizations face a number of issues relating to the effective

sourcing, storage and dissemination of knowledge. According to Shermon

(2002), these issues include.



Loss of knowledge as job requirements change rapidly and personnel

move across department. Knowledge moves with such personnel and is

not captured at a control place for future use.



Lack of organizational culture for sharing of knowledge employees are

often reluctant to share information with in the organization Why
should I part with my knowledge? Knowledge gives me power. Clearly,

the mindset of employees need to undergo a significant change towards

knowledge management.



Absence of adequate knowledge systems that capture and store tacit

knowledge residing in the minds of personnel (having technical/scientific

or other expert knowledge. For example, when technical service

personnel do not file reports after field visits, the next team that goes out

for the same work has to start afresh and reinvent the wheel.



Absence of an effective learning organizational culture is another issue.

Many organizations have inadequate filing and database management

system. There is a need to setup common knowledge domains (e.g.,

power point presentations, preliminary questions, training materials,

suggestion scheme inputs, computer programmers, library research

results, patents and relative publications, internal publications etc. This

also includes establishing effective content management and knowledge

delivery systems.



Inadequate to and fro dissemination of knowledge between the

knowledge center and other key stakeholders including manufacturing,

logistics and marketing divisions, institutional customers, academic

institutions, quality standard institutions and equipment builders.



Developing and sharing best practices across various centers an well as

access to external best practices and continuously evaluating and

upgrading best practices.



Searching for knowledge resources, organization need to establish

mechanisms for tapping internal and external resources (including
personal search) and developing communities of practice setting up

technology bulletin boards and identification of experts.

Ragnekar (2001) has identified the following challenge for the implementation

of knowledge management systems in organizations



Motivating employees to search, accept and adopt best industry practices



Developing metrics towards appraising the effectiveness of a knowledge

management programme and measuring its results



Motivating employees to share knowledge



Identifying and representing the organization`s existing knowledge.



Lack of common understanding of the company`s business model and

strategic drivers.



Changing the bureaucratic culture and organization structure.

Learning Orgnaizations

Peter Senge (1990) introduced the notion of the learning organization, which has

become the ideal for companies desiring to compete in the age of knowledge

capital. Senge has defined learning organizations as those whose people

continually expand their capacity to create the results they truly desire, where

new and expansive patterns of thinking are nurtured, where collective aspiration

is set free and where people are continually learning how to learn together. The

organizations that truly excel in the future will be the organizations that discover

how to tap people`s commitment and capacity to learn at all levels in an

organization (Senge, 1990). Learning organizations are typified in several ways.

First, personal mastery forms the spritual foundation of the learning

organization. Individuals become committed to life-long learning, continually

clarifying personal vision and focusing energy. Personal mastery is important to
organizations because of the reciprocal commitment between the organization

and the individual. Second, building shared vision is essential. It is the common

sense to identify and view future that motivates the individuals in the

organization. Third, team learning occurs when the collective results and

learning of the team far exceed what could have been achieved individually.

Fourth, mental models are explicitly articulated and constantly analyzed. Mental

models are deeply ingrained assumptions, generalizations, or ever pictures or

images that influence how we understand the world and how to take action. By

recognizing, scrutinizing and challenge the organization`s view of what can and

cannot be done, management teams can collectively change their view of the

world and engage in institutional learning. Finally, systems thinking integrates

the other four disciplines. By taking a systems view, organizations can focus on

the interrelationships of all functions, activities and individuals in an

organization. Systems thinking is essential for building a whole that exceeds that

sum of its parts to build a system which can capture, utilize and leverage

external information in a way that constantly directs the experiences toward

improving organizational performance. Towards that end, it is essential to

establish the following :

A Sense of Purpose : a clearly articulated, shared view of the future

direction of the organization.

Information Flows : a systematic method to capture and disseminate

knowledge and experience throughout the company to provide real time

information to those who need it.

Decision Processes : Processes for making decisions that question

previous assumptions about the business and encourage those involved

to move beyond the status quo.
Communication : An organizational communication style that

encourages the sharing of knowledge, innovation and calculated risk

taking and catalyzes employees around the common purpose.

Culture : Once barriers to learning have been removed, a culture is

encouraged were each individual continually learns and facilitates the

growth of the organization.

Knowledge capital may not have precisely the same definition in every

organization, every division, every department, every function or every work

unit. The key to understanding knowledge capital is understanding what

makes an organization competitive that is its core competence and the

collective knowledge, talent and marketability of the people working in the

organization. So the definition of knowledge capital varies by the nature of

the business and the collective knowledge, experience and creativity of the

individuals who make the business operate.

Business Strategy

Knowledge Management Strategoy

Culture

Organization

Infrastructure

Intellectual

and

Development

and

Assets

People

Process

Facilities

Figure 2. Knowledge Management Strategy


Source : Angela Abell and Nigel Oxbrow, 1999, People Who Make Knowledge

Management Work.

Action Plans or Strategies for Growing Importance of Knowledge Capital



Prepare for the Realities and Need to Educate the Workforce :

Employees should be shown how each individual`s efforts impacts

corporate success. Employees should also be given tools to support

appropriate decision making and they should be rewarded in ways that

are matched to desired organizational results. According to Peter

Drucker (1992) because of the vastly expanding corpus of knowledge it

is imperative that member learn how to learn.

See People as a Competitive Advantage and Invest : Asset Leadership

should be encouraged at all levels. Leaders must fulfill a role of creating

a learning organization that stimulates and challenges people by

providing strategic directives, encouraging learning and facilitating the

transfer of experience. Leaders can determine that learning takes place

by the questions they ask and by the approaches they use. Leaders must

actively participate in capturing and transferring learning inside the

organization.

Look at Long-term Plans for the Workforce : There has to be a long term

planning for the workforce skills and talents needed by the organization.

Planning for talent is different from planning for production. It requires

careful consideration of the competencies required at each level and in

each function of the organization. It also requires state-of-the art

approaches to succession planning that go beyond the simple

replacement plans of the past or even the talent pools of the present to
build competitive bench strength throughout the organization over the

long term (Rothwell, 1994). That is, in fact, a powerful way for the HR

function to contribute to developing knowledge capital for an

organization (Kelley, 1997).

Support Ways to Deploy Knowledge Assets : Organization`s strategic

planning process should be revamped so that it encourages creativity and

information sharing within and across functions. The strategic planning

process should be used to reexamine the organization acting in a

dynamic environment and create a dialogue with the company`s leaders

and employees so that people are constantly thinking about what they

should do and how it would affect the organization in a changing

environment.

Determine Skills and Competencies of the Workforce (Skills Inventory) :

The focus on identifying and developing leadership as well as technical

competencies should be given. These leadership competency models

clarify how the organizations expects decisions to be made and how

individuals should demonstrate leadership. These models can also be

used during selection and promotional processes to determine what

characteristics and behaviours indicate that an individual is likely to be

successful in any leadership position.

Revisit Matrix Management : By using matrix management,

organizations can avoid the turf battles that can stem from more

traditional

command-and-control

structures.

Moreover,

matrix

management is well suited to application in setting where many

temporary project teams come together and work quickly to address

problems tapping the talent of many specialists. Another benefit of

matrix management is that it gives employees exposure to differing
management styles, which can help to develop them for dealing with the

future challenge they face by seeing the effects of those styles in action.

Develop Teams : Another action to build on the growing importance on

knowledge capital is to develop teams, defined as cohesive groups

assembled to address a problem, manager a process compare steps in a

process, or work to improve productivity. Teams may be temporary or

permanent; they may be formed form individuals doing the same work

(functional teams) or different work (cross-functional teams); they may

be led by one or more people (directed teams) or by team members (self-

directed teams). A key advantage of most teams, however, is that they

help organizations and individuals depart from traditional and

bureaucratic, motions how work is organized, who is responsible for

doing it and how people work together to achieve common goals and

carry out similar activities.

Develop Reward Systems for Sharing Information : Ways should be

developed for rewarding people for sharing information. The balanced

scorecard is one way that organizations have been attempting to do that.

This approach is based on the philosophy that effective measurement is

an integral part of the management process, the balanced score card

provides a framework to translate a company`s strategic objectives into

performance measures. Four critical areas of employee and

organizational performance are measured : financial results, performance

for customers, internal processes and innovation and growth. By using

internal and external measures, these four areas discourage managers and

employees alike from making unfavourable trade-offs among critical

success factors (Kaplan and Norton, 1993). The balanced score card

facilitates rewards for information sharing because it measures success in
each area. Within each area, relevant knowledge that must be shared can

be identified, measured and appropriately rewarded.

Developing Strategies for Building Knowledge Capital Experiences and

Assignments in Succession Planning : Development experiences are

planned to build individual competencies and can be linked to the

competencies required for success of the organization with a strategy.

Peter Drucka (1992) emphasized that are way of educating people is to

view the whole, of course, is through work is cross-functional task

forces. The real challenge lies in the building on experience and leverage

knowledge quickly and widely throughout the organization.

The role of HR function goes well beyond value recognition. For knowledge

capital to add value to organizations, key people should be identified, and made

to transfer the information to others, use it in HR strategic planning processes

and to spark innovation and creativity among the workforce.

Use and leverage

knowledge

To act intelligently for

success and viability

Deploy knowledge

Create new knowledge:

Learn, Innovate and

Research

To improve

processes,

products and

Using prior knowledge

services

and imports

Organize and

Capture and store

transform knowledge

knowledge

To re-use and build

To make it broadly

upon it, and to

available and to

leverage it in other

embed it

ways



Figure 3. The Knowledge Life Cycle
Source : Knowledge Research Institute, Quoted in Business Today, May 7-21,

1999, p. 86.

PERFORMANCE APPRAISAL

Knowledge based organizations have to be adept at engaging their workforce to

achieve goals that benefit the organization as well as the individuals. In a

continuing effort to monitor the pulse of the market place, more organizations

are trying operational yard sticks to the traditional financial gauges. It is a

common view among managers that staff will perform better if they understand

the contribution that their work makes to meeting the written objectives and

goals of the organization. It follows, therefore, that anything that makes this

connection cleaner to employees should enhance performance. This insight

encourages organizations to publish documents that show through the medium

of a programme structure, how all the myriad jobs undertaken contributed to

meeting the organization`s objectives. Feedback is as important as

understanding the significance and contribution of one`s work. Many managers

believe that feedback should be based on measurement (Watson, 1994(a)) and

consequently much of the effort under the heading of performance management

is used to develop system for measuring performance. Most measurement

methods are based on a systems model that attempts to measure the input to an

organization, the uses to which those resources are put and the services and

benefits that arise from that activity. Performance measures only have value, as

information rather than data, if they are constructed as ratio that put one piece of

statistical data into the context of another. There are a number of issues that

arise out of the use of performance measure. For instance, there are four basic

types of processes that may require differing emphasis in the measures

Operational

Developmental
Managerial

Support

Each measure has to have a reasonable standard of performance. The individual

measure must directly support and align with the next higher level of measures

well aligned with the objectives and the ultimate strategic goals. Measures

provide focus, quantify objectives and set standards. Objectives have to be

quantified by developing measures to adequately express each dimension.

Detailed measures are combined and can be summarized on dimensions of

higher level objectives.

Management in partnership with the workforce, must find opportunities for

development, empowerment and performance that meet both organizational and

personal interests and objectives. Management must provide opportunities for all

employees to develop skills, experience and knowledge that can improve their

performance and increase their capabilities. Without developmental knowledge

and experiences, performance will be disappointing. In addition to

developmental opportunities, management must provide opportunities for

employees to demonstrate, practice, perform, learn and improve their

performance and capabilities. Monitor and assess measures provide for both

internal and independent monitoring and assessment. Measure of performance

should be monitored by external groups with interests in the outcomes, or

groups that are at least impartial. For example customers, peer groups, senior

management are likely candidates for monitoring. This is what is called 360?

appraisal.

The intention of 360? appraisal is to give a broader and more objective

assessment of people`s competence, although from another angle these systems

must multiply the biases and distortions of judgement to which all appraisal is

proof. Stewart (1998) pointed out that much assessment procedure in
organizations accepts a logical fallacy that the sum of many subjective

judgements is an objective one. Managers are often willing to accept multi-rate

appraisal within certain constraints. They accept its use for developmental

purposes, but are less willing to see it to be used as a basis for judgement

concerning pay, performance or promotion. Multirater feedback is often only

used when a manager has, in different cases, four, five or eight people reporting

to them. With small numbers it may be difficult to maintain the raters`

anonymity and the judgements made be sweetened to avoid any danger of

reprisals. In a fully 360? system, there is also a problem of the weightage to be

given to the various perspectives; should the views of subordinates have the

same value as those of senior colleagues and how seriously should the

assessment of customers or clients be taken. It can be argued that upward

appraisal (if not the full 360?) is an appropriate balancing of the power relations

between management and non-management staff.

It is essential to measure what you reward and reward what you measure.

Otherwise, no strong motivational effect will be created. If new measures are

needed, or if existing measures need modification, create fix them as soon as

possible. Rewards should take many forms, including money, recognition time

off, empowerment, work selection, advancement and development. And rewards

should celebrate successes, as well as desired behaviours such as collaborating,

experimenting, risk-taking and learning. One interesting aspect is that results

and outcomes are the objectives being managed, not processes. First by

emphasizing outcomes that is product, services and financials, the organization

focuses on meeting customer needs and business needs, not internal functional

or political needs. Second it gives managers of each organizational unit the

flexibility to organize the processes and enabling business system components to

best fit their local needs and personal management style, but holds them

accountable for meeting the outcomes. Third, the work force is primarily
rewarded for results, not for internals. What is most important thing you can and

must do to change the existing culture and mindsets so that they are receptive

supportive and committed to the precepts of the knowledge organization?

Motivate everyone by providing equal opportunities and development, as well as

just appraisal and rewards.

Management must measure and reward the performance, behavours and

attitudes that are needed and desired. It is essential to measure what you reward

and reward what you measure. Kaplan and Norton`s Balanced Scorecard

approach both measures and rewards. This approach is then combined with core

values of providing good values to the customer, servicing the customer, high

performance, leading with expertise, innovation and sharing and cooperating.

Therefore following should be rewarded :

Customer satisfaction

High performance

Personal knowledge and expertise

Team work and sharing of expertise and knowledge

Creating new and extending existing knowledge and expertise

Using and applying the knowledge and expertise in the knowledge

repository

Proactive problem solving and problem prevention

The balance score and approach has following basic measurement dimensions:

1.

Customer

Value (Product, Service, Price)

Satisfaction

2.

Financial
Expenses

Income

Net Earnings

Net Worth

3.

Process

Quality

Time

Cost

Capacity

Flexibility/Adaptability

4.

Workforce (added by many organizations)

Development

Empowerment

Motivation

Collaboration, Sharing, Team Work

5.

Learning

Core Capability

Expertise

Knowledge

Innovation

CONCLUSION

The knowledge based organizations will have to use integrated approach in

doing business. Through the use of employee knowledge profits, they will

assemble to best internal, multidisciplinary teams to handle their business

transactions and client engagements. They will tap into their knowledge

repositions and global case bases to learn how similar assignments were handled

and solved. They will use their company intranets and knowledge management

exchange tools to access, store and retrieve important information, knowledge
and heuristics relating to their situation or business activity. Expert systems also

will play a major role in providing an active advisory component to the

organization`s knowledge repositories and corporate memory. Integrated

performance support systems supported by knowledge repositories can turn out

to be the break through concepts needed to implement this integrated approach.

Organizations need to cure their corporate amnesia in order to maintain their

competitive edge. Organizations will continue to merge, reengineer, downsize,

and flatten. As a result, a turnover of employees will be created which could

result in a brain drai effect. To overcome this potential problem, knowledge

repositories must be created, and maintained to capture the expertise before

people leave. To cope up with these trends, future organizations may well need

to be more focused and specialized in their business strategies, relying on

alliances and partnerships to produce products and deliver services that would

have been previously performed internally. According to Robert Dunham of

Enterprise Design, the power of incorporating action into our interpretation of

knowledge is that it puts the focus on the actions to be produced, not just on

understanding or information that requires another step to get to action.

Understanding and information are still aspects of knowledge, but they are no

longer the end product.

Organizations need to be proactive, and put knowledge into action. Their actions

should produce value for customers. The only thing that gives an organization a

competitive edge, the only thing that is sustainable is what it knows, how it uses

what it knows and how fast it can know something new. This knowledge

advantage will be a major competitive advantage for the organization in years to

come.

According to Brook Manville, Director of Knowledge Management at

McKinsey and Company, and Nathaniel Foote, McKinsey`s Director of

Knowledge and Practice Development.


Knowledge ? based strategies begin with strategy, not knowledge. A

company has to know the kind of value if intends to provide and to whom.

Only then it can think of its knowledge resources in ways that make a

difference.



Knowledge-based strategies aren`t strategies unless you can link them to

traditional measures of performance. If knowledge can`t be connected to

measurable improvement in performance, including improvements on the

bottom line then the knowledge revolution will be short lived.



Executing a knowledge-based strategy is not about managing knowledge,

it is about nurturing people with knowledge. Also, people will not

willingly share it with coworkers if their workplace culture does not

support learning, cooperation and openness.



Organizations leverage knowledge through net works of people who

collaborate.



People networks leverage knowledge, through organization pull rather than

centralized information push.

Above all organizations need to continue developing their organizational

intelligence. Organizational intelligence is an organization`s capability to

process, interpret, encode, manipulate and access information in a purposeful

goal directed manner so that it can increase its adaptive potential in the

environment in which it operates (Glynn, 1996).

QUESTIONS FOR DISCUSSION

1.

What is organizational effectiveness? How can high performance

work systems improve organizational effectiveness?
2.

Discuss the various principles underlying high performance work

systems.

3.

Discuss the various components of knowledge management

architecture. How can they contribute to the organizational

effectiveness?

4.

What is intellectual capital? Discuss its growing importance in

changing business scenario.

5.

What is performance appraisal. How can it be made effective in a

KBO.

6.

Discuss various strategies used for the growing importance of

knowledge management.

7.

Discuss various issues relating to the knowledge management in

organizations.

SUGGESTED READINGS

1.

Drucker, P. (1992). Managing For the Future : The 1990s and

Beyond. New York : Dutton.

2.

Drucker, P. (1995). Managing in a Time of Great Change. New York :

Dutton.

3.

Kellay, B. (1997). King Makers. Human Resource Executive, 11(2).

4.

Rothewell, W. J. (1994). Effective Succession Planning : Ensuring

Leadership Continuity and Building Talent From Within. New York

: AMACOM.

5.

Rothwell, Willian J.; Prescott Robert K. and Taylor, Masia, W. (2005).

Strategic Human Resource Leader. Mumbai : Jaico.
6.

Kaplan, R. and Norton, D. (1993). Putting the Balance Score Card to

Work. Harvard Business Review.

7.

Glynn, M.A. (1996). Innovative Genies : A Framework for Relating

Individual and Organizational Intelligences to Innovation. Academy of

Management Review, 21(4).

8.

Liebowitz, Jay and Beckman, Tom (1998). Knowledge Organizations

What Every Manager Should Know. New York : St. Lucie Press.



Unit III

KNOWING WHAT THERE IS TO KNOW

The world is changing fast and the world of business is changing faster. In the

new millennium, business corporations will have to deal with entirely new

challenges to meet customer demands, move from competition to collaborative

reconfiguration, dovetail supplier and subcontractor processes to the corporate

goals and empower employees to be able to meet and surpass customer

expectations.



The challenge of meeting higher customer expectations is not something that has

emerged suddenly. This evolution has been happening over the last 30 years,

accelerated in this last decade because of rapid expectation pulls, like the impact

of the information explosion and entry of global brands into all international

markets. This revolution has been further fortified by the push of new

technologies like pervasive Computing and the Internet, which have allowed the

promise of Net-Centric Computing to extend into the work and life styles of the

next generation of prospective buyers in the world`s new economics.




In the relentless competitive search for new business, the customer today

is seen by breathless marketers as a fickle and mercenary shopper, who respects

no brand, has no loyalty and demands higher value for money with every

transaction. They also expect new products and services to be available every

day. This has brought in the concept of the market facing enterprise, where

every process and activity within the organization is pointed towards increasing

customer value. Business process re-engineering, which was once seen as a

euphemism for downsizing, has taken its rightful place as a tool for simplifying

customer interaction with the organization. Information Technology has begun

to pervade all activities within and beyond the physical boundaries of the firm

and the focus of Total Quality Management initiatives and benchmarking

initiatives have all become oriented to the stated and implied needs of

customers.



This has resulted in changes in the expectations and profile of employees

too, who have to become customer rather than task focused, exhibit high

capabilities in the use of technology to maximize their own productivity and

significantly cut down learning times for any new task or role.



New paradigms are also emerging in the organization`s relationship with

its suppliers and subcontractors. They are now seen as key partners in the new

virtual corporation, providing the ability for the entire supply chain to be fine

tuned towards changing market needs.



Take the case of the transnational European Insurance Corporation. In

early 1998, it realized that its profit margins were being eroded by two factors.

First, the inability to command the right price for its services, because of

inadequate knowledge of customer expectations and competitive scenarios; and

second, repeated failure of attempts to train new employees well enough and fast
enough to respond to customer needs for information and new services. This

corporation, like many others in the service delivery business today is faced with

three key challenges.

1. How to change its method of attracting customers and servicing their

needs in the new world of Internet and Electronic Commerce.

2. How to transform its processes and implement Information

Technology Enablement to build the market facing enterprise.

3. How to re-engineer the mindsets of its employees and enable

individual and corporate learning to happen in an institutionalized

manner.

The challenges themselves are not new and in an organization with a

long and successful history of delivering customer services all over the world,

there is no doubt that enough capability exists to address each challenge with the

collective wisdom of generations of managers and leaders, and emerge

successful. But in this statement of the solution lie the problems that face,

schools, universities many organizations and even governments. These are the

problems of identifying the sources of knowledge that exist within the

organization. These are issues of finding the correct method of sharing and

disseminating knowledge across the enterprise and to transform the customer

satisfaction capabilities of each and every member of the organization through

timely availability and use of the collective knowledge base.

This is the dilemma that has moved the concept of knowledge from the

conceptual third stage in a continuum of data-information-knowledge-wisdom

into an addressable and important component of an organization`s customer

satisfaction arsenal. The realization that knowledge can be sourced, stored,

disseminated and used has today spawned multiple research projects, led to the

development of a number of tools, become part of the agenda of over ninety
percent of the global corporations and has even taken knowledge management

to the very peak of the present day Information Technology Hype Cycle. The

nascent state-of-the-art and science of KM can be gauged from the fact that less

than half a dozen enlightening books exist on the subject today ? we hope this

book will add to that body of knowledge. But the interest in the subject is

evident from the scramble of consultants building knowledge management

practices, the gaggle of information technology tools and products that are being

rechristened as knowledge management, and of course the numbers of

information management strategists and researchers of the 1980`s and early

1990`s who now claim to have over a decade of expertise in knowledge

management as their claim to fame.

UNDERSTANDING THE IMPORTANCE OF KNOWLEDGE



Before delving into the esoteric and still fuzzy art and science of

knowledge management, let us understand the term knowledge itself in an

organizational context. The difference between the ordinary and the

extraordinary handling of any task, process or interaction ? between employees,

with customers or with any other stakeholder of the firm ? has always been the

explicit and tacit usage of knowledge by the person guiding the transaction.

This knowledge has often been confused with information and sometimes with

wisdom because of the somewhat blurred boundaries that exist between the

three. While we shall analyse these differences in detail in a later chapter, it is

important to understand that information is nothing but the result of the

processing of large amounts of data that are created during the regular

operations of any organization. This information in the form of Management

Information Systems, Decision Support Systems or just through the picking up

of a telephone, is available to all who are authorized to access it. When the

component of experience in handling similar situations is added, including the

ability to use images, text and transactional intelligence for taking more enriched
decisions, true knowledge is brought to bear on every transaction. The

continuous practice of the art of using knowledge can add to the collective

capability of the individual, a workgroup and a function and can eventually

become the collective wisdom of the organization.



The application of knowledge and the practice of knowledge

management as a precise science can create wonderful results in any

organizational context. The work of every employee can become richer through

access to Best Practices at any stage of a business process or customer project,

the suppliers and subcontractors to the organization can become part of a close

working group where early involvement is possible in all the business thinking,

particularly in the highly competitive business situations. Customers can be

delighted with every transaction, becoming richer and more productive. Thus,

the transition form being an aorganizatin that is invwardly focused to becoming

a true market facing enterprise can be achieved. Most important, in the current

environment of value addition measurement at all a levels, and shareholder

value creation, the conscious capture, storage and archiving of knowledge can

lead to the creation of invaluable intellectual property that has both practical and

long term strategic value for the organization.



Managing knowledge is becoming a business imperative for those

corporations who want to protect their present market share, build future

opportunity share and stay ahead of competition. Knowledge will also be the

key driver for those firms who are keen to innovate and change the rules of the

game. It is no secret that many consumer electronics firms already have two or

three future models ready even as they are introducing today`s model into the

marketplace. This ability to create the future rather than try to predict it

accurately has often been the result of knowledge about the present and future

customer needs that preempt the customer`s own ability to visualize the future.

And in large organizations, this is best done not by seeking external help, but by
using the explicit and tacit knowledge of the entire employee and partner

community. To quote the CEO of Hewlett Packard, one of the world`s most

successful corporations, Successful companies of the 21st century will be those

who do the best job of capturing, storing, and leveraging what their employees

know.



In business corporations, effective and timely usage of knowledge can

also result in the reduction of cycle time and assist in the business process re-

engineering and organizational delayering process.



The ability to enable academics, students, bureaucrats or citizens to

quickly identify and resolve problems will be the key to successfully managed

institutions and E-Governance in the new millennium. The benefits of applying

knowledge are truly universal and are imperative for success in the new

millennium.

THE TECHNOLOGY PUSH FOR KNOWLEDGE MANAGEMENT



The concept of knowledge itself is not new, because theneed and

importance of knowledge has been the basis for the development of various

cultures, philosophies and religions. What has really made it possible for people

and even organizatins today to even contemplate harnessing knowledge energies

for better management has been the rapid evolution in technology that we have

seen over the last decades.



The role of technology, particularly information technology in defining

and reviatalizing corporate strategy has evolved over the last forty years or so.

In the 1960s and 70s, computers were confined to glass cabins and sometimes

as departmental number crunches. Information strategy was always seen as

something that would come in after the corporate strategy had been defined. It

was only with the introduction of the personal computer in the early 1980s and

the subsequent spread of the networking phenomenon that changed the role of
information technology from being a passive consequence of corporate strategy

to a pre-requisite to the development of strategy.



The pull factors exerted on the corporation by its external environment

are compounded by the push given by rapid advances in information technology,

particularly in the area of intro-organization and inter-organization

communications.



This push, largely driven by the rapid proliferation of the Internet and the

usage of associated Internet technologies within corporations in the form of

intranets and extranets has resulted in the emergence new paradigms of business.

A case in point is amazon.com, the virtual bookstore that has caught the fancy of

shoppers and stock market analysts alike and zoomed to a revenue run rate of a

billion dollars and a market capitalization many times that, this company has

proved that the traditional model of business is slowly but surely giving way to

new methods of planning and developing business opportunities that will change

the face of marketing strategy in the new millennium.



Other significant players are also beginning to generate significant

revenues in the other three segments. FedEx, Cisco and Intel are reporting

multi-billion dollar business-to-business transactions. Another popular internet

startup, eBay, has brought the concept of the Virtual Auction to the consumer-

to-consumer space. Pioneers like priceline.com are turning the entire marketing

paradigm on its head. It has made consumer-to-business transactions the new

way of booking airline tickets, hotel rooms and soon, every form of service

where the customer is keen to name his price rather than ask for discounts. All

these phenomena are changing the every organizations deal with customers and

even customer expectations from organizations.



While E-Commerce is one visible usage of the Internet phenomenon,

another internal innovation that is happening in many business corporations
worldwide is that of knowledge management. The ability that the Internet

provides to seamlessly integrate the business processes of organizations with

activities spread all over the globe is encouraging organizations to look at

knowledge capture, archival, dissemination and usage as the logical method of

improving customer response through institutionalized and technology-enabled

processes. Through the deployment of data and knowledge capture, storage and

mining tools on knowledge networks, the objective seems to be to capture every

form of explicit and tacit information and knowledge and build ongoing

corporate learning.



The Corporate Portal is the logical culmination of technological

advances in the areas of knowledge archival and dissemination, the internet,

intranets and extranets and managerial innovations in the areas of shared

learning and corporate experience building. In its early deployment in many

organizations, the corporate portal is nothing more than a customized computing

front-end for each and every employee in an organization which permits a

customized user interface with the large storehouse of data, information and

knowledge that exists in departmental, corporate and industry databases and data

warehouses. It combines many evolutions like the electronic mail, GroupWare

computing capabilities, personalized information retrieval and collaborative

working with the new science of knowledge networks which enables the

conversion, storage and on-tap availability of erstwhile tacit knowledge in

explicit and accessible formats.



The early beginnings of the corporate portal actually happened in the

business to consumer space. This caught the fascination of consumers and the

global investor community alike, sending many Internet stocks into stratospheric

levels. Front runners like Yahoo were the early pioneers in moving from

generic portals, which provided a launching apad for surfers and information

seekers alike, to customized individual access points like My Yahoo, one of
today`s most popular personalized internet services. The reason why more and

more consumers find this concept fascinating is that it avoids the clutter of

searching through multiple web sites for information, education and

entertainment, that is most commonly accessed by creating a template for

capturing only those information elements from the internet that one is actually

interested in. This is enabling the concept of the customized newspaper,

selecting scanning of high interest web sites and pull-based access of

information on new products and services. In the consumer segment, the

personal portal is already sounding alarm bells for traditional marketers who

have been used to traditional push forms of advertising and product promotion.

The formation of virtual communities consisting of groups of internet users with

similar interests across countries and continents is being accelerated by this new

portal concept.



The corporate portal will go one step further in integrating the work style

of every individual into the information strategy of the organization. With the

current trend in the US and Europe towards telecommuting and hot desking, an

employee can start working anywhere in the world by sitting at a computer in

any airport or hotel or business center or even at home and getting his individual

working environment conjured up in seconds to enable him to commerce work.

With many of the world`s leading technology firms including Microsoft, Oracle

and IBM as well as some of the most innovative Silicon Valley startups putting

billions of dollars of investment monies into new tools and technologies for Net-

centric hardware, software and communications capabilities, the next few years

may change the entire paradigm of the business corporation.

FROM ART TO SCIENCE : KNOWLEDGE MANAGEMENT



A knowledge management initiative is best taken up if an organization

finds value in building an institutional memory or a comprehensive knowledge
base for the firm to enable better application, sharing and managing of

knowledge across the various entities within and outside the organization.



Let us revisit the case of the European Insurance Corporation that was

mentioned earlier in this chapter. The size of the knowledge challenge can be

estimated by the parameters of its operation ? a network of nearly two million

customers with over tow thousand new enrolments every week. Call center

operators are inundated with nearly 10,000 calls every day ranging from simple

policy queries to membership changes and a host of unexpected demands for

information from pleasant as well as irate customers. With an annual volume of

over 30,000 insurance claims and payouts in excess of a million-and ?a-half

pounds, any improvement in the efficiency of the operation could have a

significant impact on the customer satisfaction levels as well as the overall

profitability of the enterprise.



Compounding the problem for the organization was the fact that one of

the toughest categories of people to hire, train and retain in the call center

employee. With call centers becoming one of the most popular customer

servicing mechanisms across Europe and the USA, attrition level of employees

is very high with the result that the company was spending enormous time and

effort on training and retraining its employees on an ongoing basis.



The European Corporation set for itself one major objectives as its

knowledge management initiative-to achieve a five percent improvement in

claims processing accuracy with a resultant ten percent improvement in overall

profitability, which would be possible since both underpayment and

overpayment of claims was resulting in major cash losses through waste on one

hand and expensive law suits on the other. Three strategies became the focus

for achieving these goals.
Get new employees trained on all aspects of Call Center operation in the

shortest possible time with new technologies applied for pre-requisite,

skills and reinforcement/remedial learning. This would eliminate the

need for expensive and time-consuming classroom based training of new

recruits and refresher training for existing employees.

Have knowledge available on tap about company policies, frequently

asked questions and explicit and tacit customer knowledge.

Improve quality of customer response as well as capability to process

customer claims efficiently and accurately on an ongoing basis.

The eventual outcome for the knowledge management initiative had

been defined in clear business terms and the strategies clearly defined before the

technologists were put on the job. Very often, knowledge management

initiatives fail simply because the reasons for embarking on the project are not

clear and the critical strategic issues are not identified. Today, this company is

on the verge of achieving its objectives of just-in-time training, claims

processing accuracy and customer satisfaction and will soon see a knowledge

workstation with a customized enterprise knowledge portal on the worktable of

every knowledge worker.



But it takes a lot to get there and the organization will have to grapple

with a range of technological and behavioural challenges before it sees full

success. Many of these are presented and analyzed in detail in subsequent parts

of this book.



Knowledge management has enabled many organizations of worldwide

repute to comprehensively change their approach and service delivery

capability, both towards their internal employee community and towards

external stakeholders. Many large European and American banks are focusing
on the task of building and institutionalizing organizational memory.

Knowledge is being built about vital processes and practices. Models are being

developed to describe tasks, processes and customer relationship functions that

employees are engaged in with detailed objectives and best practices that are

oriented towards achieving them.



Chase Manhattan Bank has developed a comprehensive relationship

management system by using the visual basic programming environment

wherein bank employees have complete customer knowledge available on tap,

including information on loan histories, deposits, investments and other explicit

and tacit knowledge that facilitates better customer relationships.



In the oil industry, Chevron has been successful in deploying a

comprehensive knowledge management framework. It uses Lotus Notes in a

comprehensive Group Ware solution that is deployed on a corporate intranet.

This establishes communities of best practice and enables sharing of best

practices across the company. The company holds regular internal conferences

for best practices exchange and provides access to corporate and industry news,

human resources information, financial and library services on the same

knowledge network. A variety of on-line training courses enrich the information

and knowledge available on this network.



Dow Chemicals has a comprehensive intellectual asset management

system. It includes the management of know how, copyrights, patents,

trademarks and trade secrets. Pharmaceutical giants like Glaxo and Welcome

are setting up intranet-based executive information systems which enable

knowledge sharing on people, key business activities and best practices. It

enables internal and external benchmarking on an ongoing basis. Various

financial institutions like bankers trust are deploying collaborative computing

technologies to enable sharing of knowledge of financial markets between
employees to create in-house knowledge bases that catalogue and share the

knowledge acquired in various parts of the firm. They also plan to extend the

in-house knowledge base to key customers, which will not only increase

customer satisfaction but also minimize the time that would need to be spent on

actual one-to-one interaction with the customer in any transaction.



The real difficulty in implementing knowledge networks is the ongoing

intellectual effort that will be required to ensure that real benefits accrue to the

organization. The cost itself may be only of an incremental nature, since

corporate intranets are now a common feature in many companies. It is only the

software that will need to be procured and implemented to get the knowledge

network functional. One major challenge to implementing knowledge

management successfully is the tendency for many corporate chieftains and even

functional heads to disbelieve the notion that it is really possible to capture,

store, analyse and disseminate knowledge for shared usage. Until this

realization sinks in and CEOs take the first few steps to establishing a

knowledge performance index for the critical and repetitive activities of the

organization, knowledge management will remain a topic for magazine articles

and intellectual seminars.



However, the business environment demands it, technologies are

enabling it and effective knowledge management will be the difference between

the winners and the also-rans in the corporate world of the new millennium.

Implementing KM in your Organization



At the end of a talk by a leading international speaker at a recent seminar

on knowledge management, there was some unexpected feedback from a rather

agitated gentleman in the audience. Surprising because, the session by any

yardstick had been an interesting one and gave some useful insights on the

subject. The cause of his concern, however, was the fact that the world already
knew that knowledge management is a clear business imperative. However,

most thinkers on the subject resort to talking about rather abstruse theories and

broad generalizations and tend to take umbrage under the assertion that specific

answers have to be figured out by each organization. How does one ensure that

knowledge management is seen as anal pervasive way of life rather than a pilot

project that lost its luster after an overdose of hype and unrealistic expectations?

What is required is an unambiguous action plan, clear guidelines on what is to

be doen, how, when and by whom. Mere pontifications are no longer enough.

Hard-nosed businessmen would rather depend on a scientific approach to

success than leave it to the probable brilliance of a few believers who practice

knowledge management as an art form.



Aspiring practitioners of knowledge management primarily have two

major questions:

How can knowledge management be interwoven into the organizations`s

mainstream activities and functions rather than be looked upon as a

discrete experiment.

For an organization to embark on a sustainable and successful

knowledge management program, is there a clear implementation

methodology that can be followed.

Both these are very real concerns. For KM to get institutionalized it

requires not only organizational conviction but clear processes and

methodologies for achieving the same. However strong the intuitive conviction

about an initiative may be, its longevity can be ensured only by :

(a) a clear correlation to business objectives and strategies.

(b) Identification of quantifiable milestones and outcomes towards the

achievement of these objectives.
There are any number of examples where knowledge solutions have been

implemented without any questions asked because the CEOs saw it as an

absolute necessity. The ability to derive an organization`s knowledge strategy

out of its business strategy lends clarity to this intuitive conviction, enables a

sounder approach for prioritizing various activities of knowledge acquisition and

provides for setting up of processes and metrics to enable an ROI justification.



Knowledge management and more specifically knowledge sharing is

extremely depenent on the organizational ethos. However, implementation

cannot be an open ended exercise whose fate is determined by the employees.

For any initiative to get institutionalized it need to be supported by clearly

defined processes, individual responsibilities and technological enablers.

While it is not our instent to over-simplify the issue by purporting to provide a

solution to the last teail, our experience in various KM engagements leads us to

believe that it is indeed possible to arrive at a well-defined approach to go about

such initiatives. It is both feasible and beneficial to clearly link knowledge

management with business strategy and planning. That way one can associate

some quantifiable outcomes from KM towards achieving business objectives

rather than merely seeing it as a desirable initiative. Moreover, while KM as a

subject has reahed nowhere near the maturity of, say defining a software

engineering process (for perhaps the simple reason that it is to do more with

people than with software) it is possible to chalk out a clear implementation

methodology. Hopefully, what has been shared here will give on (of many)

possible approaches that could translate into a clear plan of action of the

organization.

LINKING KNOWLEDGE STARTEGY TO BUSINESS STRATEGY.



In chapter 5 we examined the process of identifying KM solutions from

the business strategy perspective as one of the possible approaches. This can be
viewed as the top down approach to knowledge initiative. There are

organizations that have started knowledge initiatives in areas that seemed to be

the obvious choices are possibly represented only the low hanging fruit. This has

the obvious advantage of being able to embark on a KM project without much of

a premble and time lag and also ensure an initial success. However, the not so

obvious disadvantage of this approach is the difficulty in identifying similar

projects, prioritizing them and ensuring that they can be retrofitted into some

kind of a cohesive knowledge strategy in future. The initial project has the

distinct possibility of being a lone initiative, albeit being a much-acclaimed and

talked about one. It does not necessarily snowball into an organization-wide

phenomenon that can yield business benefits, on reaching a certain critical mass.

The top down approach on the other hand ensures that there is a clearly defined

knowledge strategy in place. Pilots can then be chosen and projects can be

chosen and projects can be prioritized based on various techno-cultural issues.

It ensures that there are some clearly defined goals in the knowledge domain

that are not lost sight of irrespective of initial successes or failures. In fact, the

feedback from such initiatives can become valuable inputs for refining business

strategies.

THE K-GAP ANALYZER AS A TOOL



An organization needs to be able to identify what are the knowledge

assets required to meet its business strategy. Obviously, the business strategy

would be dictated by an organization`s core competence. ,[s has been elucidated

by Hamel and Prahalad1 in their path-breaking work, core competence has to be

looked at in the context of building competitive advantage. This means that

business strategy has to be based not merely on current activities and existing

knowledge assets, but on the way the organization can build on its current core

competence towards achieving competitive advantage. This in turn would

decide what would be the knowledge assets that need to be acquired.


Business strategy has got to be broken down into a comprehensive list of

key business drivers, with milestones and time linmes for each business activity.

For each KBD, the complete set of knowledge assets (K-sets) required to

achieve that KBD need to be identified. This forms the starting pint for

evolving an organization-wide knowledge strategy.



It is in this context that the use of a tool christened the K-Gap Analyzer

is likely to be of immense help. This is a deceptively simple tool which when

used iteratively has multiple utilities. Some of the processes it aids are:

Building the knowledge strategy

Aiding a K-Need analysis

Evolving a learning strategy as a well integrated subset of the knowledge

strategy

Synchronizing a top down knowledge strategy with a bottom up skills

acquisition plan

Providing a basis for a quantitative analysis of investments in knowledge

acquisition versus realization of business objectives

We will examine each one of these facets as we go along. But right now

we will see how this tool can be used in the context of business strategy. Once

the knowledge sets for each business function have been arrived at, the next step

would be to perform an As-Is Analysis. This entails pegging the current

knowledge levels of the organization as high, medium or low. While some

organizations might like to do this exercise based on the collective judgement of

their key personnel, the K-Gap Analyser, when used in the K-Need analysis

phase, helps to yield some quantifiable results by breaking down each activity

into sub-activities and cumulating the knowledge scores.




Simultaneously, one needs to arrive at a similar rating for key

competitors that is based on market intelligence reports and expert judgement.

By plotting the organization`s skill levels against those of the competitors, it

gives a quick pictorial summary of:

Where the organization currently stands

What kind of skill acquisition plans need to be contemplated

What are the requisite timeframes, based on the knowledge gap between

the organization and its key competitors.



It also serves as a reality check` to figure out whether the business

strategy is indeed feasible, given the current knowledge base of the organization

and how far and how quickly it has to go.





An analysis of the nature and extent of the knowledge gap can enable top

management to take certain strategic decisions, depending on whether the gap

can be bridged through incremental knowledge acquisition or requires quicker,

more comprehensive strategies through tie-ups, mergers or acquisitions. A
classic case in point was the example discussed in Chapter 2, where a

knowledge gap analysis clearly revealed the existing holes in the overall product

offering from Lotus Learning Space, prompting a tie-up with Macromedia.

THE FOUR PHASE KM METHODOLOGY



We have described here a four-phase methodology for KM projects,

Obviously this methodology does assume a certain chronology of processes in

implementing KM solutions. A number of KM initiatives have succeeded

without adhering to well defined methodologies or processes. It is equally true,

though, that these organizations have been unable to answer the What next?

question that crops up immediately after implementing the first project. While

quick initiatives are certainly worth encouraging simultaneously, following a

more systematic and rigorous methodology for evolving a knowledge strategy

ensures that there is a sense of direction in the overall approach, this also

aoolws the retrofitting of the gains and learning from the first few projects into

the future course of action.

The four phases are as follows:

1. K-Need Identification

2. K-Acquisition Framework

3. K-Net Design

4. K-Net Implementation

K-Need Identification



At the business strategy level one can look at broad groups of knowledge

categories or K-Sets for being able to take some strategy decisions. However, in

the K-Need Identification and Analysis phase, a more rigorous analysis is called

for. The K-Gap analyzer comes in handy during this phase too.


The underlying principle behind a knowledge strategy is that an

organization needs to know how the presence or absence of specific knowledge

entities is affecting its overall business. Towards this end the following

correlations have to be established:

1. Translate Business Strategy to KBDs.

2. Identify those KBDs that pertain to new areas of operation. For these, a

fresh analysis of knowledge requirements needs to be done. For current

areas, an as-is analysis as described below, needs to be done.

3. Translate each KBD into Key Business Processes (KBP). This assumes

that the organization has already gone through an exercise of optimizing

its business processes. It is best to do it at this stage if it has not been

done. This will prevent the organization from investing its time and

resources to supplement knowledge levels for activities that might be

redundant.

4. For each KBP, identify all the activities involved.

5. Depending on the size and complexity of the organization, each activity

might have to be broken down into several levels.

6. Each activity (or sub-activity) would be executed by one or more

individuals. In the need identification` phase, each employee will need

to establish this reference in terms of linking his activity to the

corresponding KBP and KBD, besides the regular process of identifying

the department or project that they are working in. This exercise by

itself will help to identify redundancies within the system. It aso, in a

subtle way, gives each employee a sense of participation and

responsibility towards the overall business endeavor.
7. The employee then identifies their knowledge needs to perform their

specific activity. These are listed as a comprehensive list of knowledge

entities and are highly specific to the nature of the task being performed.

Examples of such entities could be the previous marketing proposals for

a marketing executive, manpower resource availability for a project

manager, patient referrals for a sales person in a pharmaceutical

company or Java application development skills for a programmer.

8. Once the knowledge entities` are identified, the employee would have to

rate each of them on a scale of low, medium or high along two

dimensions. These two dimensions are the knowledge level required for

executing that particular job and the knowledge level currently available.

The knowledge entity would get a score of 1,2 or 3 (for low, high and

medium respectively) and of course a score of 0 if it is non-existent.

Hence the required knowledge score` as well as the current knowledge

score` can be arrived at. It needs to be understood that the current

knowledge score should connote the knowledge immediately available

so that is also reflects the time lag, if any, to obtain it and the ease or

difficulty in being able to access it on time. For instance, access to

previous proposals of a similar type would constitute a knowledge

element of a high rating for a marketing executive in their ability to put

together high quality proposals quickly. If they find that a similar

proposal was made elsewhere in the organization, but it takes a

considerable amount of effort to contact the right people and access the

content, then obviously the current knowledge availability (or rather

accessibility) to the marketing executive is low. It is important to

understand that a good knowledge strategy has to take cognizance of

both availability and dissemination of knowledge assets. Depending on

the nature of the organization, a facility can be provided for employees`
assessments of their knowledge scores, to be refined by their superior

who is likely to have a more holistic understanding of organizational

activities.

This seems like an involved and complex procedure that would take up a

lot of time and effort. Actually, this is not so. If the K-Gap Analyzer is

available as an automated tool on the company`s intranet, it would take each

employee barely 15 minutes to file the required details on-line, once the

organization level details of business strategy, objectives and processes are

worked out as an initial, one-time effort. The gap analyzer is then capable of

analyzing these inputs and scores at multiple levels of consolidation to yield

some extremely useful insights. Let us look at some of them.



The total knowledge score can be computed as :







Total Knowledge Score = K

i

j

ij

Which gives the total knowledge scores of all knowledge entities K (i = 1 to m)

i

across all organizational activities (j = 1 to n).



The differences between the knowledge score required and the current

knowledge score gives the extent of the knowledge gap. The number of

knowledge entities, when clubbed into homogenous knowledge sets, is

indicative of the range or diversity of skill sets required.



On another dimension when scores of a single K-set are cumulated

across activities, processes or projects, it gives the relative score (compared to

other K-sets) of both the criticality and extent of the K-gap. Since the scores are

consolidated from individual assessment, if more people experience a

knowledge gap, it correspondingly increases the overall knowledge gap in the

organization, thereby automatically prioritizing itself. This acts as a facilitator

for prioritizing various knowledge initiatives on the basis of the actual need. Of


course there would be other issues like cultural and technological factors and

overall business priorities that might influence the final decision.





The knowledge gap analyzer can be used to consolidate scores at either a

project or departmental level to be able to find patterns of knowledge

distribution and adequacy.



Depending on the criticality of the knowledge gap, decisions can be

taken regarding what kind of investments would be justified for knowledge

initiatives. If figures of opportunity costs because of delayed availability or

non-availability of knowledge or skills are also captured when employees fill the

K-Gap analysis forms, it greatly helps in an ROI analysis at a later date.



The K-Gap Analyzer therefore prepares the ground for identifying areas

in which KM initiatives need to be undertaken. These probable KM projects can

then be prioritized depending on overall business needs, technical feasibility,

costs, expected benefits, required timelines, visibility and current work group

culture. Even if all other parameters strongly drive the need for a knowledge
initiative, the current organizational culture could very often tilt the balance in a

feasibility exercise of this kind. If the knowledge is more tacit than explicit in

nature, and the current organizational climate is just not conducive to knowledge

sharing, it might be well worth postponing the KM project until such time that a

comprehensive Change Management initiative can be undertaken to create an

environment that can sustain a knowledge sharing culture.



However, it needs to be kept in mind that most of the early KM projects

in any organization are bound to entail change management issues. This phase

would be the right time to create the Change Vision`. Behavioral changes

especially in an organizational context cannot be expected to happen overnight.

The process has to start right at the beginning of the project so that by the time

the technical solution is ready for a rollout, significant progress has also been

made to create the right culture for implementation. Towards this end, at this

stage the change management agents` either by way of external consultants or

internal leadership or both have to be identified.

K-Acquisition Framework



Once the knowledge gaps have been established and the KM project(s)

identified, the next step is to figure out how and from where these knowledge

components have to be acquired and disseminated. The following need to be

achieved at this stage:

Knowledge codification

Identification of sources for acquiring these knowledge inputs

Creation of knowledge maps by linking source and destination for

knowledge elements

The starting point for this is knowledge codification` as discussed in

Chapter2. Our experience has been that knowledge codification in virtually
every context has been simplified if we keep the Dual Knowledge Solution

Model in mind. Broadly speaking, the Transformation model deals with explicit

knowledge while the Independent model attempts to find solutions to sharing of

tacit knowledge. Detailed classification of knowledge is something that can be

determined by each organization depending on what typology it is most

comfortable with and suits the needs of the organization best. For each K-Set or

K-Entity, the source for acquisition can broadly be classified as under:

I to K Transformation Category



- from structured databases



- from information repositories ? both text and multimedia (existing)



- from information repositories ? existing but non-digitized

Independent Knowledge Category

- skill enhancement programs (training)

- external resources (people/organizations/sites)

- internal expertise (people / products)

For creation of knowledge maps, a knowledge need as represented by a

K-Set or a K-Entity has to be associated with corresponding knowledge objects

(K-object) which are going to be the knowledge source for acquiring that piece

of knowledge. A K-Object could be an individual (expert), book, document, e-

mail, manual, web content, website address, project reports or any multimedia

content. So, in our example of the marketing executive, the K-entity would be

previous proposals` and the K-Object to provide him with those inputs could be

say a list of Word or PowerPoint files available at a certain remote server or

even the names of his counterparts working elsewhere in the same organization

with details of their clients.




Having identified the sources for K-Objects, the probable destinations

would also need to be identified to complete the K-Map at a conceptual level.

(Creating K-Maps ar the time of implementation has other aspects to it as well,

like providing an on-line guide, a complete catalogue of K-Objects customized

for every knowledge worker, a navigation aid and so on). The K-Acquisition

Framework phase thus provides the blueprint for identifying, capturing and

tagging all the required sources of knowledge. Simultaneously, the blueprint for

managing the soft or behavioral issues should also be in place. A clear action

plan has to be drawn up by the change agents.

K-Net Design



The stage is know set for the technical design of the KM solution. The

following activities are done in this phase:

Identification of the KM application portfolio

Selection of appropriate technology for implementing the solutions

Specifying the infrastructure requirements in terms of hardware, network

and software

Choice of the appropriate KM tool or framework, should any be required

Detaining the technical specifications for the KM solution

One of the advantages of viewing KM projects through the Dual Model

approach is that it lends itself to an easy delineation of the software application

portfolio that needs to be developed for the KM project. Once the knowledge

sources for the required knowledge sets are classified under the two models, as

we saw in the acquisition phase, it becomes simple to identify the application

layer. A representative sample is illustrated here:


K-Solution

K-Sets

K-Sources

Application Layer

Model

Transformation

(As

Structured

Datamining/knowledge

identified in

Model

databases

extraction applications

the

Need



Analysis



Interface and gateways

phase)

to bedrock systems





Text

mining

and



Existing

information

retrieval applications



repositiories

Workflow

and





messaging applications



Non-digitized

Document capture and

management,

search



sources

and

retrieval





applications



Skill

Web-based

training

enhancement

solutions with Learning

Independent

programs

Management Systems

Model





External

Yellow

paging

resources

applications

-People/

Web

crawler

and

organizations

broadcast applications

-Web sites





Communities

of

Internal

Practice (using expert

expertise

locators, collaboration,
virtual

work

space

- People

applications)



Best Practice Sharing



(using

knowledge

repositories

and

-

products/

Discussion Group based

processes

applications)




The application portfolio would determine what technologies are to be

used as discussed in detail in Chapter 4. This analysis also makes it relatively

simpler to determine the associated technology costs of developing these

applications. Depending on the relative criticality of these knowledge

components or sets, it could even be decided to start with certain simple`

applications within a KM project. For instance, technologically speaking,

setting up some collaborative frameworks would be relatively easier and less

expensive compared to an extensive data warehousing/mining application. A

quick cost benefit analysis usually helps to take certain operational decisions.

Simultaneously, one would have to determine the infrastructure requirement in

terms of the network connectivity, bandwidth requirements, servers, etc. based

on data and content volumes, the number of employees and their geographic

spread. Of course, more often than not, companies might already have an

intranet infrastructure which means there would be no incremental investments

excepting perhaps for additional servers and some upgrades, besides purchase of

commodity software.



If the application portfolio consists of solutions to be developed in the

Independent model category, then it might warrant a choice of either a KM tool

or a WBT tool or both. We have already discussed, the approach that can be

followed for making an informed decision on these issues, with the help of

consulting aids like a Tool Retrieval Engine.



At this stage the detailed functionality and technical specifications of the

proposed solution would need to be worked out. Processes and procedures for

knowledge capture, storage, dissemination, retrieval, updation and archiving

have to be clearly spelt out. In KM projects, it definitely helps to use the

Prototyping and Rapid Application Development methodologies adhering to
standards like UML that ensure a constant interaction between the developers

and knowledge workers. This is important to ensure buy-in by knowledge

workers at an early stage by providing GUIs that are intuitive and users are most

comfortable with. Where knowledge or skill enhancement through on-line

training is concerned, this too needs to be elaborated out in terms of both

features and content. It is important to customize content as closely as possible

to the knowledge worker`s requirement. Interestingly, the K-Gap Analyzer,

because of its innate ability to be used at any level of detail, can actually be used

to even structure the contents of a learning session. Fig. shows how learning

objectives can be prioritized and structured based on an actual analysis of

specific skill gaps.



This diagram depicting the use of the gap analyzer shoes that merely

because a project team is working on an E-Commerce project, it is not right to

come to the conclusion that putting the entire team through a standard training

program will suffice. Although a standard training program on E-Commerce

may have all the components enumerated above, a particular project team might

require specific content to be sourced and provided as dictated by the K-Gap. In

this example for instance the project does not require much skills based on

TCP/IP concepts. So it does not have to be a part of the learning objectives.

While the project does require javascript and HTML skills, the current skill

levels are more than adequate. Hence the course can be structured in such a way

that it lays additional emphasis on issues like firewall and security, OOAD and

EJB and perhaps gives the latest updates on topics like VRML and Active X.

This analysis can be done either at a group level, based on the cumulative scores

of the entire project team versus the overall skill requirements, in case a regular

instructor-led training program is being contemplated; or it could be done at the

individual project member level in case the personalized web-based learning
systems are available. This is a very strong mechanism of ensuring that the

inputs being given are exactly tailored to project requirements.



Training therefore could be an important dimension in the overall K-

acquisition process. However, it still has to be viewed as a subset of a larger

knowledge initiative for an organization. This issue needs to be clearly

understood. For, in our interactions with people about to launch KM projects,

we have very frequently encountered concerns about whether a K-Need

identification process does not turn out to be a mere Training Need Analysis

which their human resource department is already carrying out anyway. The K-

Gap analyzer clearly establishes the linkages between learning programs and the

overall knowledge strategy in both conceptual and quantitative terms.



By the end of this phase, therefore, all components of the knowledge

solutin would be worked out to the last detail. The technical solution for the

knowledge initiative would have been completely developed and tested, and the

necessary infrastructure (hardware, software, network, etc.) for the eventual

implementation would have to be in place. Equally important is the change

management initiative, which needs to be well underway. Top management

along with the change agents need to ensure that employee buy-in is ensured at

an early stage (at around the time that the technical solution is being rolled out).

Creating a positive environment of preparedness and eagerness among the

prospective knowledge workers to be a part of the knowledge sharing activity is

an extremely vital ingredient to a successful KM implementation.

K-Net Implementation



This is perhaps the most critical phase of any KM project. It is perhaps a

misnomer to call it a phase, thereby suggesting that it has a start and end point.

Unlike in most other projects, where KM is concerned, implementation has to
lead to internalization and assimilation of the knowledge processes as part of the

mainstream activities.



The activities and processes thus far are fairly simple to execute, but it is

during implementation that the best skills of all people concerned have to come

to the fore. The infrastructure is in place, the technical solution has been

developed and validated, what is left to achieve is the buy-in from people. It is

precisely this heavy dependence on people that gives a larger-than-life

implication to a KM project. If it has the power and backing of all the people

behind it, a KM implementation can lead to benefits that are most often much

larger than what was contemplated at the outset. There are tangible and

intangible spin-offs that are seldom foreseen at the beginning of the exercise.

On the other hand non-acceptance by the people can make such projects an

unmitigated disaster as well. Unlike software projects, success does not depend

merely on clearly quantifiable and measurable parameters like how technically

robust the solution is, whether it has been adequately tested and meets the

performance requirements. It depends on that highly subjective and

unpredictable parameter called people involvement`. As Davenport2 has said

while talking about Information Ecology, the right balance of IT and cultural

factors is necessary: From where I sit, successful knowledge management

always occurs through a combination of technological and behavioural change.



It is the subjectivity on account of the people and culture component that

makes it difficult to come up with standard solutions for KM implementations.

People and culture specific issues make it difficult to make generalizations even

within a single organization, leave alone evolving solutions that could be applied

uniformly across organizations. It is here that an organization has to rely

heavily on the ingenuity of its own people rather than leave it to external

consultants who at best might have a partial knowledge of the practical realities

within an organizational set-up. External change agents or consultants can be
used to give an initial impetus to the change management initiative. However,

these need to be sustained. The only mechanism for doing this is for the

organization to internalize the process and provide tangible recognition for

knowledge sharing efforts. Formal mechanisms like story telling are also being

increasingly used to spread awareness and share successes for institutionalizing

KM. Story telling asn an enabler has some very strong protagonists to the extent

where there are several story telling communities over the Net.



There are certain activities that are necessary precursors to most

knowledge solution implementations. Some of these are:

1. Content Population and Organization: The repositories will need to

be populated with the requisite content. In the Transformation Model,

the underlying databases or data warehouses would already be available.

These would have to be appropriately interfaced with the overall solution

and possibly other sources of more unstructured date. If content is either

dispersed or non-digitized, these need to be classified, organized and

supplemented with necessary metadata structures for easy retrieval.

Check-in, checkout procedures need to be followed for constant updates

on the repositories.

2. Cataloguing of knowledge Objects: In the knowledge acquisition

phase, the sources of knowledge and the related knowledge objects

would have been identified. Now is the time to actually catalog these

objects, arrive at a codification scheme that is often dictated by the

nature of knowledge objects in each organization and store the details.

The automated knowledge map then uses these indexes to create an on-

line route map for knowledge workers to locate these knowledge objects

easily.
3. Identifying the Knowledge Workers: The content access would be

determined by several layers of security as required in the context of

each organizational activity. Generally there would be access rights at

organizational, work group and knowledge worker levels. Therefore,

each knowledge worker would have to identify herself into the system

and specify the work group or special interest groups that she might

belong to. In a knowledge organization, it would be important to

remember that the system should enable as much free flow of knowledge

and content as possible, unless they deal with sensitive information. The

underlying philosophy of the knowledge network should always be kept

in mind while configuring roles and this is to enable greater interaction

and knowledge sharing. Therefore, classifying knowledge workers

should be looked at in terms of being able to provide personalized and

relevant information, rather than a mechanism that puts artificial

boundaries to knowledge dissemination and assimilation.

4. Setting up the Expertise Database: This is an important activity for

being able to locate the right people at the right time. In most cases the

use of an automated tool for K-Gap analysis, automatically provides the

skills inventory of the employees and helps to populate the expertise

database. However, this basic layer needs to be supplemented with

additional information on the availability of expertise that might be

external to the organization, yet accessible to it through its network of

consultants or business partners. In addition it is important to

substantiate a perceived level of expertise in people (either through self-

assessment or by the assessment of the superior) by more quantifiable

mechanisms. Intel (which was rated second worldwide in MAKE`99-

Most Admired Knowledge Enterprise) for instance, has been exploring

ways of identifying experts through an analysis of e-mails. In Aptech,
on the other hand, we have had a fair measure of success in identifying

capabilities even among the more reticent employees by their

contribution in solving problems addressed to the Helpdesk.

5. Processes, Roles and Responsibilities: In our consulting engagements,

we have often perceived a strange dichotomy when it has come to

defining mechanisms and roles in a knowledge solution. On the one

hand is the though that any kind of rigidity in a system could discourage

spontaneity and creativity, two very fundamental pre-requisites for

sustaining a knowledge culture. On the other hand is the harsh though

undeniable reality that everybody`s responsibility` is nobody`s

responsibility`. We believe that defining at least some fundamental

processes, roles and responsibilities area virtual pre-requisite for being

able to effectively institutionalize a system. However, while doing so, it

is extremely important for all those who are involved in the exercise to

remember the guiding principle that these are meant to be used as

enablers rather than a set of rules. For instance, there should be

guidelines that are clearly spelt out for checking documents in and out of

the knowledge repository, for removing dated content, for monitoring

discussions, specifying who should be the knowledge integrators for

different groups, fr administration services including enabling and

disabling access and so on.

A lot of the activities mentioned above are generic in nature and would be

valid for a number of situations. It is in this context that it is useful to have

automated knowledge frameworks as a quick start to an overall solution.

The correlation between the requirements as described above and the

functionality provided by such frameworks (such as the Aptech KMF)

described on KM Tools are quite obvious. These provide a quick

mechanism to understand both the processes and activities involved, besides
being able to quickly start some basic initiatives and providing a quick ramp

up of the overall solution.

CREATING THE KNOWLEDGE

ORGANIZATION ? DOES IT REQUIRE A CKO?

However, the job of making the solution work just about starts here. As pointed

out earlier a KM implementation is not really about the success of a single KM

project. It is about setting up a knowledge organization. This means addressing

a whole array of issues from organization structure, values, managerial systems,

employee satisfaction levels and formal and informal communication systems.

For KM to become a way of life it has to be presaged by creating a conducive

environment for the same. This is something that is much easier said than done.

Where sharing of information or explicit knowledge is concerned, people are

amenable to the idea much more easily. However when it comes to the transfer

of tacit knowledge, the barriers for acceptance are much higher. In a

competitive world where the indispensability and therefore the worth of people

is determined buy the amount of knowledge they possess, the natural tendency

to part with knowledge is rather low. This compounded with the fact that

experts very often are not the best of communicators, makes it virtually

impossible to even attempt a knowledge capture exercise. In such cases the best

that a K-Net solution can do is to enable the expert to be tracked quickly, so that

his services can be used through technology like audio/video conferencing. It is

indeed a reality, although even in the Internet era, it is often only the traditional

methods of knowledge transfer through on-the-job training or working as an

understudy, which are most effective.



However, it is impossible to belittle the significant gains that are feasible

through setting up Communities of Practice or sharing of Best Practices. For

organizations to be able to truly elevate themselves to a position where its
people can have knowledge enhancing interactions rather than mere information

transfer practices, it is important to set up meaningful Communities of Practice

and enable sharing of tacit knowledge, however arduous the task may be. This

is where an organization needs a knowledge evangelist. There has been a lot of

debate about whether the role of skill should she possess and what should be her

responsibilities.



It is our firm belief that an organization cannot make a knowledge

culture a reality and knowledge sharing to be an all pervasive endeavor unless it

is carried forward with single-minded devotion and zeal. Whether this is

achieved by the CEO or a CKO or a group of CKOs is a matter of detail. At

least in the initial years it is important for a group of individuals to make

enablement of knowledge sharing their sole priority. The magnitude of the task

would require a CKO (or the knowledge evangelist) to be supported by a

committed group of knowledge officers` and knowledge integrators`. Often

these two terms are used interchangeably. However, they clearly have different

roles to play, knowledge integrators (KIs) are responsible for ensuring that the

content that goes into the repositories is validated, collated, stays updated, is

relevant and worthy of being there.



Some companies prefer to entrust the responsibility of administration to

their KI`s while others might want it to be centrally administered by a

knowledge administration. Knowledge officers can be seen as the catalysts

within each division or work group who ensure that the benefits and importance

fo a knowledge sharing exercise are understood and internalized by every

member of the group. These knowledge officers have to belong to and be an

integral part of each of these divisions or groups and not be seen as an outside

element. These are the people on whom the success of the entire project

depends. Hence, they have to be the people with a great degree of conviction

about its need. It helps tremendously if these knowledge officers happen to be
highly placed in the division`s hierarchy. This way the activity is seen as being

relevant not merely because the top management sees it as an imperative, but

because the people at the operational level see it as something beneficial to their

activities. Positive signals sent in this manner tend to have a snowballing effect,

with people actually being anxious to contribute as much as they can.



In the case of the Aptech Education Division, there was a significant

amount of skepticism towards the first knowledge initiative from some quarters.

Though the stated objective of the CRS (Customer Response System) was to

provide an enhanced level of customer satisfaction through a knowledge

solution, there were those who actually though that it would entail parting with

information that was theirs`. The head of one of the regional offices during a

prototype validation session actually wanted to ensure that the system had

adequate controls so that complaints pertaining to his region could not be

viewed by others. His concern was that this could be used either a s policing

mechanism by the head office or for other regions to try to make some unfair

comparisons depending on the number of complaints. No implementation

rulebook can ever give guidelines on how to deal with individual idiosyncrasies.

In this case, however, the management made a very concerted effort towards

ensuring that the solution was understood in its right spirit. No attempt was

made to link this to any performance appraisal systems. What was more, it was

decided that knowledge sharing would be subtly encouraged by measures such

as a T-Shirt that carried the logo I am a Knowledge Enricher for those

knowledge workers who contributed actively to discussion forums and helped

resolve a good number of complaints. The proof was when the regional head in

question was among the first to significantly enhance his connectivity

infrastructure for better access to knowledge repositories. There is a very thin

line between unhealthy comparisons and healthy competition. The transition can
be made through the effort of an enterprising CKO and a supportive and a

supportive management.

THE DUAL SOLUTION MODEL AND THE IMPLEMENTATION

STRATEGY

While tools like the K-gap Analyzer could help in carrying out an objective of

knowledge requirements and therefore prioritize the KM projects, the eventual

implementation strategy to be followed might once again be determined by the

nature of the knowledge solution. A transformation model solution relying more

on explicit knowledge has fewer ramifications in terms of organization culture

and change management issues. A pilot implementation, followed by solution

fine-tuning and subsequently spreading the solution to encompass all work

groups could be a pattern that could easily be used for solutions where the

imponderables on account of acceptance by the people are far lesser. This is

certainly not so in the case of most independent model solutions ( with the

possible excepting of web-based learning solutions), which rely heavily on tacit

knowledge. An organization might have a preponderance of solutions based on

either one of the models or in some cases it could have an equal mix of both. In

arriving at an overall implementation strategy and determining which projects

should be undertaken first, each organization would have to use a good measure

of its own judgement.



In organizations where employee morale is low and there is a perceptible

degree of insecurity among employees, solutions based on the transformation

model are more likely to succeed. One needs to understand though that even for

the transformation model solutions to be really effective, there has to be a good

measure of value addition to the information layers from the people concerned.

Initial successes on these kinds of projects may well pave the way for a more

ambitious tacit knowledge sharing exercise. Besides just the technolofy isues
and culture issues, there could be other parameters as well, which might

influence the overall strategy.



The same organization could even start with both strategies

simultaneously. A case in point is Aptech itself. The training division started

with the transformation model initiatives primarily on account of the following

reasons:

1. Its customer base is extremely large.

2. The division is one of the oldest in the company where business

processes have been clearly identified and streamlined.

3. The information flow is fairly structured.

4. These have already been automated through bedrock systems.

5. While existing information systems have only looked at capturing and

analyzing data, there is a clear case (at least in the case of student

complaints), where it was felt that these systems house an enormous

amount of knowledge. Knowledge in terms of how problems have been

resolved sometimes through the exceptional trouble ? shooting skills of

certain individuals ? knowledge that is rarely recognized and probably

never re-used.

6. The division follows a well-delineated organizational hierarchy and

communication channels are formally defined since it entails interaction

with a very large number of business partners (franchisees).

On the other hand, take the software division of the same company that

is characterized by the following features:

1. It is a relatively new division.
2. processes are still evolving and have not really reached a great level of

maturity.

3. The division has a very loose and non-hierarchical structure.

4. Information flow is not really streamlined and uses more informal rather

than formal channels.

5. The key strength of the division is the sheer brilliance of some of its

people and not so much the maturity of its processes.

6. there is not much that has been done currently by way of automated

systems.

Did this division wait for basic systems to fall in place to follow the

transformation approach from information to knowledge? No. It went right

ahead with several knowledge initiatives that had nothing to do with IT

initiatives that were being evolved. One of them was the Help Desk and Expert

Panel facility. Every knowledge worker is assigned to one or more knowledge

groups depending on her area of work/previous experience/interest. Each

knowledge worker publishes her skill areas. In case of a problem where any one

would wish to request for help, it is logged in through the intranet based help

desk facility. It can either be logged as a general request or it can be directed to

a specific person. In the latter, the person concerned is automatically notified.

The person either sends in a response or could redirect it to a discussion forum.

Resolved problems get achieved for future reference. In a very short time this

solution has resulted in significant time saving on projects. With multiple

projects working with similar skill-sets, this has facilitated a very vibrant culture

of knowledge sharing . Of course, it has to be gently but surely encouraged by

the management, too. In this case anyone who attends to a number of help desk

requests in a particular area becomes a defacto`guru`. There is nothing like peer

recognition to nurture and encourage knowledge sharing.


KNOWLEDGE MANAGEMENT IN THE ORGANIZATIONAL

CONTEXT



Let us first profile the corporation of the new millennium to understand

the role that various initiatives and information technology tools play in building

it up. Then we would conduct an analysis to see how these initiatives could be

approached in an evolutionary manner or as a co-existing set of projects.



The profile of the millennium corporation can be built by looking at its

ability and its arsenal to address each of the five imperatives mentioned earlier.



IMPERATIVE









SOLUTION

Customer focused business processes - Aligning processes to E-















Business

Highest quality at lowest prices

- Enterprise-wide integration

IT playing a transformational role - A whole array of tools
Best in class performance measures - Knowledge capture
Right people for the right roles

- Learning / Knowledge















integration

Organizations all over the world have already embarked on a number of

initiatives to achieve these objectives which will enable them to become leaders

in the global marketplace. We will briefly examine some of the major ones and

see what tools are being deployed in each area. We will then see how an overall

knowledge management initiative links up many of these initiatives

Improved Customer Service

The current trend in this area, pioneered by early Internet and E-

Commerce adopters, is Customer Self Service. Giving customers the

ability to access information themselves has resulted in quantum jumps
in customer satisfaction and also significantly reduced the cost of

employing large numbers of customer service representatives. Web

Technologies, the integration of internet systems with corporate intranets

and the use of Group Ware and collaborative computing systems to

enable the customer to dig deep into the knowledge bases of the

organization within a designed security network have been the key

technology enablers in this area.

Customer care and managing relationships

Customer Relationship Management is emerging as the new Gold

Standard application of the new millennium with new consulting firms

like 12 Technologies leading the way with products that extend the

virtual organization into the office of the business customer and the

hoem of the retail customer. On the organization side, CRM tools help

in linking the customer orders and queries into the legacy systems for

order processing and enquiry or link directly to the Enterprise Resource

Planning implementation of the organization.



E-Business is also becoming a popular way of managing relationships

both at the business-to-business level and at the business-to-customer

level. While legendary successes like the virtual bookstore amazon.com

and the auction site ebay.com have created waves in the business-to-

consumer market space, it is widely believed that the biggest potential of

the Internet and electronic commerce will lie in enabling business-to-

business transactions. International technology majors like CISCO and

Intel are already transacting a major percentage of their business with

partners and corporate customers through these electronic transactions

and even professional communities like doctors and lawyers and
governments all over the world are now embracing this new medium of

interaction.

Enterprise-wide integration

What is expected to be complementary in an organization that enables its

customers to interact and delve deep into its internal business processes

is the ability to provide quick response through a set of business

processes that are re-engineered for quick response and the ability to be

truly market facing`. The process of Internal Integration has been

addressed in the past two decades by waves of solutions ranging from

Material Requirement Planning to Manufacturing Resources Planning to

the now ubiquitous Enterprise Resource Planning with tools like SAP

and Baan now becoming market leaders in their chosen segments. In

addition, collaborative computing enables information and decision-

making to be shared across corporate networks. Tools like Lotus Notes,

Microsoft Exchange and GroupWare systems support and enhance the

capability of both ERP and legacy systems in organizatrions. Business

intelligence, data warehousing and data mining capabilities are also

being brought into organizations to further tighten the capture, sharing

and usage of data and information to benefit internal as well as external

business transactions.

Tighter integration across the Supply Chain

With more and more focus on core competencies, the need for

outsourcing non-essential services and even large portions of the

manufacturing or service delivery process has become the order of the

day. This has consequently led to the imperative of managing the entire

supply chain tightly to ensure that the customer does not suffer on

account of the handoffs from the organization to its partners. Supply
Chain Management tools are now becoming as popular as CRM products

and are inevitably finding linkages to the ERP systems that most

organizations have implemented. These also link to the internal

collaborative systems, making seamless interfaces within and across the

organization, one of the key features of the millennium enterprise.

Inducting and Retaining Talent

In most industries today, attracting and retaining human resources is one

of the most crucial activities. It is the focus of considerable attention at

all levels.



This is one area where information technology has probably contributed

the least. Evolutions in technology-based training, performance support and

knowledge networks have enabled organizations to speed up the training

processes and reduce costs. Even relatively mediocre employees are

empowered to perform at peak levels through finely crafted performance support

systems. These initiatives help primarily in induction and training. Retention

mechanisms are being built through information technology in the form of

career planning and tracking systems. They also provide for Internet and

intranet enabled environments which allow free sharing of ideas across

organizational hierarchies and geographies. With every mentor andboss being

just a mouse click away, behavioral scientists are being continuously forced to

reassess organization development initiatives, and design newer and newer

means of keeping high performers motivated and intellectually challenged.

INTEGRATING

KNOWLEDGE

MANAGEMENT

INTO

THE

MILLENNIUM ENTERPRISE
Some Imperatives and Challenges

Knowledge management presents an opportunity to integrate all the people and

processes that exist within an organization towards stated corporate objectives.

These objectives have already been defined and range from employees to

suppliers to subcontractors and to the customers. And today`s tools range from

the array of information technology solutions ? Business Intelligence,

GroupWare, ERP, SCM, intranets, the Internet ? to every possible form of E-

Commerce. The question is whether each of these is disparate and independent

optional initiatives or whether knowledge management can provide a thread of

continuity to integrate and align all these initiatives towards the common goals

of the millennium enterprise.



All corporations today are faced with enormous challenges that threaten

their supremacy even in relatively unchallenged domains. This fiercely

competitive environment has been created by a combination of competitive pull

factors like globalization and privatization, and technology pushes, primarily

caused by the rapid proliferation of the Internet. The ease of the crumbling of

the Berlin wall has brought down many erstwhile entry barriers. In an

environment where product superiority is transient and brand loyalty is

becoming an anachronism, the only differentiator will be the quality of the

organization`s processes and its ability to attain and sustain customer intimacy`.

Once the customer intimacy objective has been translated into specific consumer

to business electronic interfaces and customer service and response mechanisms,

the next stage is to ensure that the enterprise`s business processes are all

oriented to the needs of the customer. A true market facing enterprise ensures

that customer needs flow quickly down to the last level of response in the

organization and the needs and actions are captured in the legacy systems or

ERP bedrock of the organization. The quick capture, storage, dissemination and


use of data, information and knowledge is essential to ensure that quick actions

and responses are facilitated by information technology at all levels. This

process energy` needs to be supplemented by the third imperative ? that of

People Empowerment.



This is where a knowledge-centric approach can really enable a

corporation to succeed beyond the expectations of its customers and the

capabilities of its competitors. A true knowledge Corporation will be one where

the principles of knowledge management are applied as an underlying

philosophy for all strategic initiatives, ranging from customer interfaces to

internal integration of systems to business-to-business Interfaces. Included of

course is the full continuum of the learning organization from learning systems

to performance support to knowledge management.



An analysis of the potential of knowledge management tools and

techniques to transform the implementation of each of the initiatives will put the

real potential of knowledge management in perspective. These are discussed at

great length . Consumer-to-business and businee-to-consumer transactions can

range all the way from simple customer queries and feedback through a Web

Storefront to comprehensive Customer Relationship Management (CRM) tools.




The trends in Business-to-Consumer (B2C) E-Commerce point towards more

and more self-help for the customer to enable customers to access deep down

into the innards of the organization and conduct secure transactions with very

little interaction with the employees of the firm. Thinking through the

knowledge interventions required to facilitate these self-help environments will

call for a deeper understanding of customer buying patterns and psychology so

that all the intelligence derived form significant customer interactions can

become part of the institutional memory of the enterprise. This will ensure that

every future interaction of the customer with the firm becomes richer and will

enable the concept of customer intimacy to really come alive.





Consumer to business transactions would be meaningless if the

organization did not build processes to quickly enable the flow of expressed and

implied customer needs through the enterprise. Collaborative computing

involves the implementation of Group Ware and messaging solutions and tolls

like Lotus Notes have become synonymous with knowledge management. The

ability to build communities of best practices` and shared ideas is one of the

key capabilities of any significant knowledge management initiative and will

catalyze the development of a Quick Response and Reflective Organization.

Added to this are collaborative knowledge capture and usage capabilities

provided by business intelligence tools which again ensure that processes

respond more creatively to customer issues and a true market Facing Enterprise

is built.



Legacy systems and enterprise resource planning applications are

typically complete in themselves. The role of knowledge management in the

integration of GroupWare or business intelligence tools with these larger
segments of applications would be to ensure seamless interfacing. This ensures

that the results of discussions and intelligence built over a period of time are

able to enrich the data or context-specific information stored and also enable

customers to get better Reponses. In the Insurance Company, the real cutting

edge to customer response comes when the Call Center employee`s interface is

able to give in real time not just the data about policies or information about the

customer`s queries, but also tacit guidance on the best behavioural stance to

adopt with the customer based on previous interactions.



Knowledge management also needs to be integrated with the data

integration strategy of the enterprise. When this is achieved, it will also enable

the business to business transactions from the firm to its virtual enterprise

parterners ? suppliers, sub-contractors, distributors and agents ? to be energized

through knowledge-based interactions. Picture an extended ERP situation where

a comprehensive customer contract has to be executed, involving significant

outsourcing and subcontracting and delivery to be made in installments.

Synchronization of all business processes across the supply chain and

intelligence and knowledge sharing across the virtual organization will ensure

minimum hiccups and maximum customer and partner satisfaction.





And the knowledge Continuum itself? There is no doubt that knowledge

management tools are the best way of making Peter SEnge`s concept of the

Learning Organization come true. While purists argue that there is a lot more to

learning and knowledge than just technology, there is no doubt that the

availability of learning, electronic performance support and knowledge bases on

tap for ready access are the great potential areas for improving corporate

knowledge capabilities. As we move deeper into the new millennium and

knowledge processes, tools and technologies get internalized at every stage of
business interactions. Knowledge management will provide the visionary

organizations with a capability level that will prove a major source of

competitive advantage in the new Information Society.

DISSEMINATION TECHNOLOGIES

Dissemination can either be through pull-based or push-based technologies.

Pull-based technologies would include the regular IR technologies that we have

looked at earlier including query and search. Push technologies include

broadcasting, alerts and triggers, channels, software agents, etc. Most solutions

would use a combination of push and pull technologies.

KBMS

One would be loath to call knowledge Base Management Systems (KBMSs) a

separate technology. There are some that believe DBMSs are to Information

Systems what KBMSs are to KM. it is not so. A knowledge base` is more of a

conceptual entity than a technology by itself. What we need to understand is

what a knowledge base really connotes. To recap from the last chapter:



A knowledge base is information along with inter-relationships and

contexts.



Technologically, this translates into a database or an information

repository with advanced search capabilities.



Therefore, any set of technologies that would enable the above would

also facilitate creation and maintenance of a knowledge base. It is more

important to understand the conceptual implication of a knowledge base as

being different from a database or an information repository, rather than add to

the technological muddle by classifying it as a separate technology all together.




So which technologies should an organization settle for?



It is always easier for any organization to leverage onits existing

technological skill-base to implement solutions. An information to knowledge

Transformation model will need to build on the technologies used in its bedrock

systems, whether it is through RDBMSs, data mining/data warehousing or

Document management applications and enable knowledge sharing and

generation by supplementing it through technologies like collaboration search.

An independent knowledge solution model does not have to be built bottom

upwards. Several quick solutions can be built by merely ensuring the necessary

connectivity between people and the use of powerful collaboration and

conferencing mechanisms. This is not to say that the latter should not use what

are commonly designated as IS technologies. Conversely, most transformation

model solutions may also use some of the independent model technologies. The

functionality provided by a number of these technologies is complementary in

nature and can be judiciously used to evolve a suitable solution.



The key technological elements that are driving knowledge management

forward according to a Delphi research note2 are:

The broad acceptance of intranets and extranets as the network backbone

for automated business processes
The growing sophistication of object technologies and their deployment

in new software applications

The arrival of practical standards for data integration and metadata

management in the I-net environment, specifically the XML standard;

and

The merging of knowledge management priorities into the competition

among the major software platform developers, specifically IBM/Lotus

and Microsoft

Further, according to a Delphi User Survey in 1999, respondents have

identified

Intranets,

Text

Search

and

navigation.



Tools,

GroupWare/Collaboration Software, document management and the

Internet/World Wide Web as the most significant technologies in their KM

initiatives. The respondents current efforts are focused on organizing, leverging

and sharSearch and navigation. Tools, GroupWare/Collaboration Software,

document management and the Internet/World Wide Web as the most

significant technologies in their KM initiatives. The respondents current efforts

are focused on organizing, leveraging and sharing exiting efforts are focused

organizing, leaveraging and sharing existing corporate knowledge. They feel

that the next round of technologies will help them generate new knowledge and

uncover hidden knowledge. This runs congruent to our earlier hypothesis that

the Transformation model calls for a higher degree of effort and technological

maturity. Hence, both an analysis of the relevant technologies, as well as hard

data from existing organizations who have undertaken KM initiatives, seem to

reveal that starting with the relatively simple Independent model technologies

with an initial focus on explicit knowledge might be a good starting point for

organizations embarking on a KM journey.


Reference

1. Managing Knowledge Workers, Frances Horibe John Wiley & Sons,

2. Knowledge Management ? Enabling Business Growth Ganesh

Natarajan and Sandhya Shekhar, Tata McGRAW ? Hill Publishing

Company Limited.

3. Management by Consciousness, Edited by Dr. G.P. Gupta. Sri,

Aurobindo Society, Pondicherry.

Unit IV

Content Outline

1. HRIS for KBOs

2. Performance Management in KBOs with special reference to balance

score card

3. Software requirements for the performance management

Teams in IT projects have traditionally involved two parties: end users and IT

staff. However, for a knowledge management system, teams need to be more

comprehensive to be effective. A knowledge management system is built on

expertise, knowledge understanding, skills and insights brought into the project

by a variety of stakeholders who might have little in common from a functional

standpoint. The quality of the collaborative relationship between these

stakeholder and mines the ultimate success of the system. Having the world`s

best knowledge management system still does not guarantee successful

management of knowledge: That success comes come from KM`s

implementation and cultural embodiment by both the knowledge workers and

the employees who will ultimately use it. This relationship is complex and often
highly problematic. Therefore, selecting the right blend of team members to

lead the knowledge management project is a critical step.

The fifth step on the KM roadmap involves design of the knowledge

management that will build, implement, focus, and deploy the KM system. In

this chapter we identify sources of internal and external expertise needed,

prioritize stakeholder needs, evaluate member selection criteria, and examine

team life span and sizing issues. We identify characteristics of the KM project

leader to determine mechanisms to streamline internal dynamics and maximize

users` participation. Next, we identify tasks for the KM team and fit them to the

risk evaluation matrix to circumvent common points of failure.

SOURCES OF EXPERTISE

Companies implementing knowledge management must draw their expertise

from several different sources:

? Internal, centralized IT departments

? Team local experts

? External vendors, contractors, partners, and consultants

? End users and front-line staff

Although we cannot undermine the importance of IT staff who will actually

build a system, the most important part of this team member set is the set of

local team ? based expert(s). The burden of balancing counteracting

requirements falls on the shoulders of the knowledge management ream.

Drawing from a variety of functional groups within and outside your company is

essential. If done properly, this approach will become the strength of your

knowledge management team and a major contributor to the success of such an

endeavor.


LOCAL EXPERTS AND INTRA-DEPARTMENTAL GURUS

Active end-user involvement throughout the knowledge management project is

critical to its success. In most companies, there are the early adopters of

technology--the so-called gurus within your company. These are the people

who come in early or stay late to play with new tools that become available.

Even though many of these folks tend to be non-technologists,





They are the best people to gauge the possible usefulness of each feature that

your system has. These local experts are often the first to notice the limitations

of existing systems, and to think of possible upgrades and changes to meet the
evolving needs of their group. Examples of such workers include marketing

people who realize that existing technology could possibly be used to deliver the

latest sales figures and data needed by traveling salespeople in remote locations.

INTERNAL IT DEPARTMENTS

Relying solely on local experts, of course, has its limitations. Even though local

experts might possess a fairly high degree of technical knowledge besides

knowledge of their own job, they might lack an understanding of the

interdependencies between complex systems, networks, and technology that

pure technologists like the IT staff might be able to bring in. While the local

experts will bring in the business case and ideas, it is IT staff who will bring in

knowledge of:

Infrastructural capabilities and limitations

Connective and compatibility among the team-based systems and the

overall organizational technology infrastructure

Standardization issues across different platforms, applications and tools

Technicalities underlying the adaptation of these tools by various

knowledge worker groups within the company

When you are selecting team members from the internal IT department within

your company, it is critical that you select personnel with credibility in the

eventual user group. This helps ensure that the relevant set of stakeholder needs

are adequately represented. With increased emphasis on customer service, it is

easy for internal customers to outsource their development services to external

consultants. Therefore, delegates selected from the IT department must have a

more expansive view of who the customer is. This must include the internal

customer at the same level of significance, as they would view an external
customer or buyer. Technical skills, of course, are a priority in making these

decisions.

NON-LOCAL EXPERTS AND EXTRADEPARTMENTAL GURUS

Non local experts and extra departmental proponents promote team laterality.

Laterality refers to the ability to cut across functional boundaries and relate to

people from different areas. People who exhibit this characteristic are best

suited to be on a knowledge management team. Such members can:

Act as a bridge and as interpreters between people from different

backgrounds, skill areas, and specializations

Learn faster than the average person in your company and are not

defensive about

Their lack of understanding or knowledge in areas other than their own

Bring value to the overall team synergy as they tend to be confident but

not egoistically constrained

Learn the basic lingo and understand the frameworks that their

collaborators refer to

Have the ability to deal creatively and rationally with the problems that

the aforementioned differences can, and often do, lead to

Groups of such people have also been referred to as communities of practice;

they ate charac- terized by

Multifunctional groups that incorporate diverse viewpoints, training,

ages, and roles


Enacting a common purpose by engaging in real work, building things,

solving problems, delivering service, and using real tools

Developing intellectual property, knowledge, firm culture, internal

language, and new skills

Making lasting changes in the people and the competency that they

embody

CONSULTANTS

Even though most of the technical, design, and soft skills needed for the

knowledge management project might be available in there might be some areas

that are no one`s strength within the company. These shortcomings can often be

overcome by bringing in external consultants. Internal participants might have

slight cultural differences owing to their differing departmental and functional

affiliations, but they are still tied together by a common frame of reference built

around the overall company culture, dominant values, and image. However,

extern consultants do not always fir into this frame of reference. Because

external participants often lack this common frame of reference, it is essential

that other binding mechanisms, such as their personal characteristics be strongly

matched with those of internal team members.

Nevertheless, this lack of shared culture can often be turned from a liability into

an asset. These external participants can bring balanced, unbiased our

perspective into the entire design process.

In such cases, rust becomes another significant issue. Give the nature of the

consulting business; it should come as no surprise if the consultant is developing

exactly the same type

Of system for your competitor a few months down the road. Selecting a

consultant should therefore be partially based on the extent to which die person
(or consulting company) is willing to transfer existing skills to your company`s

employees. Some of the other issues that must be considered while selecting a

consultant include:

The consultant`s reputation for integrity

The consultant`s history that demonstrates the ability to maintain

confidentiality about past projects

Whether the consultant has worked successfully for your own company on

earlier projects

Whether the consultant (or consulting company) is working on a similar

project for a competitor.

Whether your internal team trust and has confidence in the consulting

company.

In any case, highly specialized and capable consultants are often hard to find.

Since knowledge management projects are strategically oriented, the level of

confidentiality must be based up with specific, legal nondisclosure agreements.

Where highly confidential material is involved, it might be a better idea to have

an employee trained in the deficient area rather consultant from the consulting

position to a permanent job within your company. However, corporate budgets

can often restrict this option.

KM stakeholders should typify the group that they represent. For example, the

person representing your company`s human resources department should be one

who is typical (where the meaning of typical is highly subjective) of the HR

department, and has had a sufficient level of experience within your own

company.
The human resources and project sponsors or senior management provide

overall stability to the knowledge management project team.

The human resources and project sponsors or senior management provide

overall stability to the knowledge management project team.

MANAGERS

The status and influence of senior managers would make one assume that they

are the least likely group to be left out of the development process. However,

several studies have shows that this exclusion is not only possible but one that

also frequently does happen. As teams become too deeply engrossed in the

user/developer relationship, senior managers tend to be left out of the loop. As

we understand that the managers should be kept active in the knowledge

management project; and without their active involvement the entire project may

end up on shaky ground.

STRUCTURING THE KNOWLEDGE MANAGEMENT TEAM



Focus

Shareholder

Role in the knowledge



Characteristics





Group



Management Project

Strongly

Desired



Teams

User teams



Provide functional

Must

understand work











Expertise.





Processes in

their area.







Finance



Provide business



Must have

good inter-










expertise in their



personal and

team skills.











Specific area.







Other functional

Participate in the



Must have a

certain





areas with which

process design stage

degree of

credibility





knowledge











within other

participating

management









groups.









Help in the implementation Must be

willing to see







stages of the system

from other

functional















viewpoints.





Technology IT experts/



Provide technology

Must

understand





Information systems expertise.





technology

in depth.







Internal IT staff

Participate in the actual

Must have

good inter-











implementation and

personal

skills.











design.







External Consultants Represent the internal

Must be

willing to










and internally proficient

understand

the per-

technologists.



Specialities

brought in by









other team

members and









actually

incorporate them









into the design.



Bring in a perspective

Must be

willing to learn

on functional capabilities



and limitations of existing. Must be

credible.















Must have an

expansive

customer

orientation.





STRUCTURING THE KNOWLEDGE MANGEMENT TEAM (Cont.)



Focus

Shareholder Role in the knowledge

Characteristics



Organizational

Senior

Support the legitimacy of the



Understand the





Management/ project.







Management and



sponsors/











strategic processes



knowledge



Bring in vision that correlates








champion(s) with the overall company wide

Must

be credible

/CKO

vision.







Serve on steering committees Must have a clear (if

needed)

idea of the bigger Picture of where Commit the

resources

Knowledge needed leveraging should take the

company.



Must eat their Own dog food, that is, they must themselves believe what they
say.Need to be thoroughly convinced of the worth of the project.



TEAM COMPOSITION AND SELECTION CRITERIA

As with most other technologically driven enterprise-wide teams, functional

diversity in knowledge management teams should be taken as a given

characteristic. Teams need to be designed for effectiveness. While there is not

straightforward formula for designing a good knowledge management team, the

team`s design has much to do with the nature of the project itself. Functional

diversity can lead to only two possible outcomes, depending on how its handled.

The first, and very common, outcome is destructive conflict and tension. The

second, more desirable, outcome is characterized by synergy, creativity, and

innovation. This happens only when laterality among team members is high and

there is sufficient room to accommodate different backgrounds, values, skills,

perspectives, and assumptions that the members bring into the team. Summarize

the major team design considerations.










TEMPORARY VERSUS PERMANENT TEAM MEMBERS

Knowledge management is not like a typical business restructuring or

technology introduction project. Those projects are temporary and depend on

temporary teams, whereas a knowledge management project needs at least a

small portion of the group to be permanent. A knowledge management project

is not over once a knowledge management system is implemented; it must go on

and continually improve and change with changing external and internal

environments. While some members might be needed on the team only during

the initial stages, others are not as temporary. Core team refer to this

permanent, essential group. Team members can be dedicated to the project

either full time or part time. The size of the core team must be kept to the

smallest size possible-the smallest member count that can actually do the to

work. Temporary team members often belong to specific user groups. The core

team should consist of only the following participants:

Knowledge champion or a senior manager.

IT staff.

User delegates representing the core business area that is going to depend

on the knowledge management system. This could be engineering staff in

case the knowledge management system is built to support research and

development; it could be marketing if the KM system is for sales force

enablement, etc.

The remaining participants, in most cases, should be involved in the startup

phases of the project and can be called in later for further input as and when

needed.




TEAM LIFE SPAN AND SIZING ISSUES

There are two schools of thought on the future of knowledge management: One

school believes that knowledge management will continue to depend on people

to manage knowledge throughout the lifetime of the organization; the second

and more convincing school believes that knowledge management is a self-

eliminating field. This means that as a company begins to accept knowledge

management practices, they should, over several years, become so second nature

to employees as the company evolves that eventually there should be no need

for a knowledge manager or CKO to manage knowledge. Knowledge workers

themselves should be able to handle all KM tasks once KM becomes embedded

in the company culture and in work practices.

One would argue why the knowledge management team would, in the first

place, do their job so well that it would eliminate their very need! That is a hard

question to answer. Though there is a lot of ongoing research to find an answer

to this question, there is little other than very strong financial and promotional

incentives that can help here. For that matter, team members on the knowledge

management team should be promised strong rewards and promotions should

the knowledge management initiative truly succeed. A team that sets out to

work with the fear of losing their job by performing too well is bound to be

under motivated, if not unmotivated.

PROTOTYPES:

Systems developers have long realized the value of prototypes. A prototype

provides both the developers, in this case the knowledge management team, and

the users with an idea of how the system in its final form will function.




By using such a prototype, even if it is incomplete, users can see the possibilities

of the knowledge management system under construction, and this improved

understanding of the final product can lead to, or trigger, highly desirable

refinement of its features, interface, functionality, and design. Tweaking the

system`s design based on user feedback in the prototype stages can save your

company much headache and unnecessary rework-related expenses at a later

date. Other ways the project manager can link to the final user.

THE KM TEAM'S PROJECT SPACE

One of the first tasks that the knowledge management team needs to undertake

is that of understanding the project`s strategic intent, organizational context,

technological constraints, monetary limitations, and short-term as well as long-

term goals. Members of your knowledge management team should be able to

provide adequate answers to these questions collectively;




























1. What is the company`s strategic goal ?

2. What is the company`s performance goal? Knowing where the company

stands before the project provides a healthy basis for answering this

question in specific terms.

3. Where does the knowledge management team fit in the organizational

hierarchy?

4. Does the knowledge management project fit vertically or horizontally in

the value chain?

5. What are the financial constraints?

6. What are the technical limitations in terms of existing platforms,

company-wide network standards, etc. ?

7. What are the critical missing elements in terms of skills, people, and

knowledge that are still missing in the team? Can consultants help? If

so, which ones and how

8. What is the time frame within which the project must be delivered?

9. What are the immediate payoffs? If there are none, when will the payoffs

begin to show up? If that is not viable either, how will the value of the

project be demonstrated and tested?

10. What level of commitment does the team have from the senior

management and from the users? If it`s poor, what can be done about it?

Are there representatives from both these camps on the knowledge

management team?

11. What are the cultural bloakades that should be expected? Does the

company culture actually fit with the knowledge-sharing attitude that is

needed to make a knowledge management system work? If not, what
changes in reward structure are necessary? Who has the authority to

make such changes? Are they willing to make them?

12. Has any competitor or non competing firm implemented a project like

this? What do we know about it? If it was successful, is there some way

to get a key participant to switch jobs? Should we call that transfer of

experiential knowledge?

Judging the true value of the project is a critical issue. If the project costs more

than the long term value that it adds to the firm, it`s probably not worth the

investment. Therefore, exploring these initial questions is critical before the

next step can be taken. If there are no direct answers, surrogate measures might

be adopted. If your knowledge management team cannot collectively answer

these questions, revisit its structure and constituents. For example, if the

primary objective of the knowledge management project is to improve product

quality by managing past and current knowledge about product quality

problems, it might be valuable to question quality quantitatively. How much

quality and at what costs? Can the customers tell the difference. Will they be

willing to pay say, 7 percent more for the same product if higher quality is

guaranteed?

MANAGING STAKEHOLDER EXPECTATIONS

The second task, after the knowledge management team has decided on an

initial set of objectives for the knowledge management initiative, is to formally

present this work to various stakeholders groups. The biggest advantage of such

an interaction is that it can help the team compare the projects objective with

stakeholder expectations and perceptions. Resolving differences at this point is

a more efficient approach than trying to fix basic design assumptions and errors

after the fact ? when the project is ready for implementation.


TEAM CONSTITUTION VALIDITY. SUMMARIZING THE PROCESS

The initial process that the knowledge management team must go through

before the initial design effort is organized well enough to proceed to the next

stage. Examine this process flowchart and determine if your team, as

constituted, is collectively able to elicit these requirement and design goals for

the knowledge management system.

POINTS OF FAILURE

Lets take a quick look at the key points of failure in systems-oriented KM

projects. Perhaps the most important study of project risks is by some

colleagues, who examined software project risks in several international

companies. In the United States alone, almost $60 billion was spent in cost

overruns and another $80 billion in canceled projects in 1995 alone. Although

other, more recent figures abound, this is perhaps one of the most rigorous

studies done in this area, and the figures proposed here are depressing! An

informal study of a group of 2,600 CEOs, CIO, and technology managers by the

Cambridge Information Network in 1999 revealed that approximately 90 percent

of IT projects exceed their budgets and over 20 percent exceed their budgets by

more than 100 percent.

THE BREAKPOINT. BUY-IN-FAILURE

Lack of an active role of the top management has been identified as the primary

reason why many projects fail; and the second reason is failure of the users to

buy in to the project. If you decide to invest in a knowledge management

project, and either your top management remains unconvinced of the value of

the idea or the users you are building it for fail to see why they need the system,

you are venturing in murky waters.















































CATEGORIZING RISKS



The below figure, illustrates the four categories in which knowledge

management project risks can be classified. This framework describes four

quadrants on which project risk can be classified the level of risk (high/low) and

the level of control that a project manager has on each category. Customer

mandate, the shaded quadrant, is a high-risk area over which you have little

control.






























Customer mandate refers to the level of buy-in from the ultimate users, who is

effect are your system`s customers. Unless they buy in to the whole notion of

the knowledge management system that you are building or planning to build,

they will have neither the inclination to use it nor support it.

Similarly, initial commitment from the top management is a necessary but

insufficient condition for your project`s success. This support must be ongoing

and active throughout the project. The problem with many of the companies

that we have studied often falls into one of these two areas. Once a project has

been initiated, the project leader must gauge the level of commitment from both

senior management and the end-user community to avoid being caught in a

situation where support for the project suddenly evaporates.

CONTROLLING AND BALANCING REQUIREMENTS

As shown in Fig, there are some areas where you, as the knowledge champion or

knowledge management project manager, have significant control. However,

there are some areas in which you have little or no control. Not having control

over an area does not, by any stretch of imagination, mean that it will not

contribute to the potential failure of your project. Customer or end-user buy-in

and the environment in which the knowledge management system will be used

are two such factors. The only thing you can do about customer buy-in

problems is to try selling the project harder, and gauge end-user needs more

appropriately; the operating environment is a wholly different story. That is

where the cultural aspects of a knowledge management system and the people

around it come into play. While all these risks must be thought be together

rather than independently, a strong focus must be on the risks over which you

have little control.




TRADITIONAL METRICS

FINANCIAL ROI AND TOBINS

Albert Einstein, very thought provokingly, reminds us that what can be

measured is not always important and what is important cannot always be

measured. It does not take an Einstein to conclude that the value of knowledge

management cannot be fully measured in terms of financial return on

investment.

A relatively old measure that has been in use for many years within business and

academic circles is Tobin`s q. This metric essentially measures the ratio

between the firm`s marker valuation and the cost of replacing its physical assets.

While Tobin`s q provides a snapshot of the firm`s state of intellectual health at a

given point in time, it provides no direction for knowledge management strategy

development. It does not tell you what you are doing wrong or what to focus on.

What is needed is a more dynamic view of knowledge performance that can help

a firm trace both the growth and decline of its knowledge assets and the reasons

underlying such changes. Traditional metrics like Tobin`s q do not tell a firm

how it can create further value, prevent imitation or substitution, and leverage its

knowledge assets to gain a sustainable competitive advantage.

Nevertheless, when it comes to measuring returns on investment in knowledge

management, two conventional approaches are in common use: putting a dollar

figure on intellectual assets, and determining the dollar amounts saved or earned

by using existing knowledge.

TOTAL COST OF OWNERSHIP

Current methods of measuring and evaluating information technology

investments do little justice to information technology itself. How, then, can we

expect those methods to be able to give us a clear picture of how our knowledge
investments- which stretch far beyond pure technology alone- are faring? Out

interviews and studies show that companies do not always demand solid

business cases for IT investments but have trouble handling decisions based on

soft gains and benefits. Maturity of judgment becomes a distinctive inhibiting

factor that prevents them from making decisions where limited quantitative data

exists.

Many companies have responded by falling back on a total cost of ownership

approach, which is much touted by Microsoft`s release of windows 2000. This

methodology identifies and measures components of IT expense beyond the

initial cost of implementation. While TCO can be a useful tool to reduce

ongoing costs by improving IT management practices, it does not provide a

sound foothold for decision making. TCO does not cut it as a sufficient

knowledge metric for several reasons:

It leaves out significant cost categories, such as complexity costs.

It ignores benefits beyond pure costing.

It neglects strategic factors.

It provides little or no basis for comparison with other departments and

other companies, such as competing firms operating in the same markets.

Lifecycle costs are difficult to gauge.

Applying TCO blindly can lead to bad and highly impolitic decisions. For

example, the decision to switch vendors to get the lowest prices does not capture

the implicit cost of supporting multiple vendors, the cost of dealing with

compatibility issues, or the benefits of high volume purchasing. Total cost of

ownership (or a similar measure fails) to do justice, comprehensively or

completely, to the decisions made.
LEARNING MORE FROM THE TELEPHONE

Just as a telephone is hard to cost-justify and evaluate, knowledge management

is something firms often find difficult to cost-justify in the face or other needed

investments, but is something they want to and should have. Even though

middle managers feel the need for a strong knowledge management initiative,

convincing senior management to shell out the couple of million dollars for an

initiative with intangible results can be a hard sell. However, there are ways and

means to measure the short-term gains to demonstrate the need for, the extent of

the longer-term guestimations of value added by knowledge management to the

firm`s bottom line and competitive standing.

THE METRIC IS THE LIMITATION

A recurring problem in knowledge management is the problem posed by a lack

of standard metrics for measuring the impact of KM. Two of the most widely

cited research projects relating to knowledge management and organizational

learning are the case descriptions provided by DeGeus at Shell Corporation and

by Ray Stata at Analog Devices. DeGeus approach at shell used scenarios in the

strategic planning cycle that encouraged managers to revisit and challenge

commonly accepted assumptions. The underlying belief was that learning

would not take place unless managers exposed the hidden and embedded

assumptions with which they approached new problems.

Similarly, Stata found that focusing on activities, such as improving response

time in external changes and utilizing planning and quality improvement as

learning tools rather than purely administrative tools, could accelerate learning.

Chaparral Steel, a large U.S. steel producer, similarly found that there was a lot

to gain by emphasizing problem solving, constantly integrating internal and

external knowledge into daily work-related activities of employees, and
allowing the time and resources needed to make this integration happen. In

addition, a good reward structure helped further.

COMMON PITFALLS IN CHOOSING METRICS

No metric is better than one that is absolutely wrong. A choice of a wrong

metric can have more ill effects than positive ones. Metrics, when applied to

knowledge work, or in general, are vulnerable to seven common pitfalls.

USING TOO MANY METRICS

A few robust are better than a number of marginally significant ones. A good

rule of thumb is about 20 metrics. They need to focus on the past, present, and

future simultaneously to be able to relate past performance, present processes,

and future results. The common problem that many measurement programs

become victims of is that of putting too much emphsis on the past. Knowing the

past is good, but it rarely is sufficient to give you a concrete idea about where

your present efforts are leading your company. As John Naisbitt put it, We are

drawning in a sea of information and starving for knowledge. Make sure you

do not add any further to that glut of information by introducing more metrics

than can be effectively, accurately and efficiently tracked. Forget quantity;

focus instead on linking measures to strategic capabilities, competitive

positioning, customer expectations, and financial indicators.

As John Billings once said, Knowledge is like money, the more he gets, the

more he craves. Nothing perhaps captures the essence of manger`s rush to add

more metrics once they figure out that they have found something that affects

their company`s bottom line. In this rush, many finally end up with more

metrics than they can simultaneously keep track of.


Robert Kaplan and David Norton have an interesting discussion between a pilot

and a passenger on the opening page of their book. The pilot says that he need

to work on air-speed, so he ignores the altitude and fuel gauge altogether. It is

not what I am focusing on, he says. Amused at their own interesting analogy,

they think that you would not want to fly in his plane, ever! Isn`t this very close

to what companies do when they focus on a single metric such as a bottom line

or market share? On the other hand, some hand, some go to the opposite

extreme and try to track too many at the same time. This is where lean metrics

fit in. Lean metrics are the few but essential metrics that can be simultaneously

tracked.

Some metrics might seem reasonable, but when they are put into action, they

result in counterproductive consequences. A good lean metric must be precise,

tied to overall value (not just profits), applicable, and designed to motivate extra

normal effort from employees.

.DELAYED AND RISKY REWARD TIES

Rewards that are tried to metrics with a relatively longer term focus should be

robust and structured in a manner that allows employees to reap short-term

benefits by successfully achieving them. Job mobility is a fact of life. Delayed

rewards will only bias employees to work toward metrics that deliver short-term

payoffs to them. To keep the long view, select metrics that can be measured

today but impact future outcomes. Alternatively, the long-term gains of the firm

should be tied closely to the compensation of the employees (Stock options are a

good example)

CHOOSING METRICS THAT ARE HARD TO CONTROL

Companies often make the grave mistake of implementing metrics that are

beyond the control of their employees. Phrases such as Build a $2 billion

browser market by 2001, Let every hand in America hold a Palmtop by the
dawn of the next millennium, or Put a Net PC on every desktop are

visionary ideas but almost impossible to control or achieve even through

systematic efforts. There are exceptions of course: Microsoft`s Internet strategy

and Netscape`s browser business are a few of those. But these are exceptions

rather than examples of what can be normally achieved. Similarly for

knowledge management systems, you cannot have metrics that cannot be

controlled. Statements such as Build the largest knowledge repository of

Website design solutions look good on paper, and that`s about it.

CHOOSING METRICS THAT ARE HARD TO FOCUS ON

Performance of a company is not solely based on internally generated ideas. 3M

and Xerox are leaders in innovation. But the difference is that 3M has actually

commercialized more ideas than Xerox. The result has been that Bill Gates and

Steve Jobs built entire industries on a few ideas that Xerox created (in its Palo

Alto Research Center, PARC) but never used.

If you think that the Palm Pilot family of plan PCs are surprisingly successful

products coming out of 3COM`s bag of tricks, remember that the product was

externally acquired from US Robotics (which had previously bought out Palm

Computing, the commercial originator of the device). The key idea is that the

metrics that you select must encourage decisions that also move your company

in the same direction as its long-term goals.

CHOOSING METRICS THAT EMPHASIZE HARD RESULTS AND

NEGLECT THE "SOFT STUFF"

Many companies emphasize hard (often financial) results while neglecting or

totally ignoring soft ones. A national survey of U.S. organizations revealed that

about 60 percent of the organizations studied never officially set any soft goals

related to managing people, suppliers, customers, and innovation even when the

hard goals were clearly laid out. Inspite of all the windy rhetoric about loving




customers, empowerment, and learning, not many executives are willing to put

measures where their mouths are. It is dangerous for top management to focus

on hard results and expect lower-level managers to take care of the rest.

Financial success, for example,

as many research studies have shown, is highly dependent on soft employee

attitudes and behavior. Make sure that your hard and soft measures go hand in

hand and are well balanced.














CHOOSING METRICS THAT ARE TOO REAR-VIEW ORIENTED

Too often, measurement is not used to anticipate the future but to record the

past. One way to avoid this trap is to ask yourself this question: Do we have

metrics that can serve as early sorting signals for future problems and signal

future opportunities?

MEASURING THE WRONG THINGS

Companies can run into troubled waters when they decide to measure things that

are precisely wrong. This is very different from the notion that a few good

measures today are better than

a perfect one tomorrow. One lousy metric tomorrow is better than a wrong one

today. If that happens tomorrow might never come!

Wrong metrics can often prove more damaging than helpful. Not all metrics,

such as calls answered per hour or sales pitches per week, that can be measured

easily and cleanly are

necessarily good. Similarly, for knowledge work, measuring aspects such as

time spent reading tw1edge reports or intranet screens are poor metrics. I could

as well be sipping coffee (God forbid vodka!) while playing Quake II on my

laptop while my desktop is connected to the knowledge management system at

work! A poor metric would still create a perception of productivity The number

of contributions by employees to a knowledge repository is an equally worthless

measure. Employees then try to maximize the number of contributions, and then

the due of those contributions takes a second place! There is something to be

learned from McKinsey; McKinsey places value on the number of times its

consultants` contributions are by other consultants.


ALL THE RIGHT THINGS NOT MEASURED

The other side of the coin is not measuring all the right things. Without getting

into Ito complexities of agency-agent conflict theory, a manager or employee

will tend to maximize

William Schienmann and his colleagues point to the serious gulf between what

should be measured and what actually is measured. See Schienmann, William,

and John Lingle. Seven Greatest Myths of Measurement, IEEE Engineering

Management Review, Spring (1998),

...tomorrow might never coma, from a song by Janis Joplin, in The Best of

Janis Joplin, Warner Music.

The metrics that are actually measured. If a manager is told that a high market

share for a product indicates brand value, he will try to maximize the market

share of that product, even though quality (not measured) might be equally

important. John Hauser and Gerald Katz explain this concept, which is further

illustrated in fig.

Let A, B,C, Y and Z be some arbitrary metrics. If all five of these are important,

but only three of these, A,B and X, are actually measured, employees will focus

only on those and simply ignore Y and Z, however important they might be.

Managers and employees who maximize A, B and X will be rewarded for their

performance even if Y and Z go to the dogs. Soon the entire company or

department is focused on improving the metrics that are actually measured, as

they alone provide an indication of the quality of their work, If A,B and X lead

to productive results, then the metrics are considered effective. If they fail to

produce good results, they are considered ineffective. Hauser and Katz suggest

that the chosen metrics gain tremendous inertia and that employees who have


painfully learned to maximize the chosen metrics fear to change course. The

problem begins right there.































Knowledge sharing and creation often tend to be akin to metric Y-ignored and

little rewarded. Knowledge-intensive companies, on the other hand, have

included knowledge sharing and creation in their repertoire of critical metrics.

Every employee`s compensation is, in part, determined by the amount of

knowledge that the employee adds and the frequency with which other

employees refer back to that contribution. Choosing the right metrics is
therefore critical both to evaluate the performance of your knowledge

management strategy and to make it work in the first place.

THREE WAYS TO MEASURE

We met Roger Bohn`s Stages of Knowledge Growth framework in the

preceding Thanks to its simplicity and ease of use, it provides a more readily

usable method for the measurement of process and technological knowledge.

However, the biggest strength of this work is also its primary weakness. The

Stages of Knowledge technique is good at providing a15,000-foot view and a

clear bigger picture, but it does not let you examine progress improvements at a

lower level. While we began with that model, we will need to some technique

that is better suited for a micro level analysis.

Let us examine three possible approaches to measuring edge work and the

efficacy of the knowledge management system. The first is as ward

benchmarking methodology; this can be a good starting point, but in the long

term this technique loses value and flexibility The second technique is the House

of Quality. That competes with the third technique: the balanced scorecard

approach. The advantage the House of Quality (QFD) methodology is that it has

been widely used and a number of low cost software tools can partially automate

its application.

BENCHMARKING

Robert Camp aptly describes benchmarking as the search for industry wide best

practices that lead to superior performance. In plain English, this simply means

that benchmarking is an undertaking of companies that aim to emulate the ways

things are done best, anywhere in or outside their firm, industry, or sector. Many

large firms have adopted bench a significant, systematic technique for

measuring the company`s performance toward its strategic goals. This concept

was popularized by Carla O`Dell and her colleagues at the American
Productivity and Quality Center (www.apqc.org). One argument for

benchmarking is that there are existing best practices within different parts of

the same company. So we should begin by identifying those skills and

capabilities within our own organizations before we look outside. Companies

repeatedly end up solving the same problems that have already solved in other

offices or locations of the same company; they expend time and money building

solutions to issues that have already been addressed: If only we knew what we

know! Texas Instruments, Harris Corporation, AMP, UNISYS, and Rank Xerox

have tried this approach and reaped substantial benefits and cost savings.

The benefits of benchmarking are not limited just to process improvement or

reuse; they extend far beyond and promote both the growth and acceptance of a

learning culture through out the organization. Benchmarking efforts can often

provide insights into various areas.

Anecdotal evidence suggests that managers do not buy into ideas that strain

finances of a company without short-term payoffs for too long. Even though a

comprehensive knowledge management strategy might be at work in the

background, show your senior management some short-term outcomes.

Make it rare. Focus on the areas of knowledge that give you an edge over

competition. Through benchmarking studies, you can easily figure out the areas

in which your com petition is not strong. If any of those areas are a possible

source of competitive advantage, by all means, support them!

Gateway for example, is known for its customer service. If you have a problem

with a computer you bought from them, you know that you will probably find a

knowledge able customer support representative on the other end. Almost all PC

manufacturers have some kind of customer support, but Gateway decided to

strengthen this over any thing else. Most Gateway`s customers tend to be repeat

buyers simply because of their excellent customer service. Gateway also uses a
customer knowledge repository to be able to track all previous problems that a

customer might have had in the past.

Some companies build a competitive advantage by taking one of the given

metrics to a level that is rare and that customers value. NEC has built on this

rarity as well. NEC`S printer division provides an overnight replacement

warranty for all its laser printers for two years from the date of purchase. By

being able to track customer information through a sophisticated knowledge

retrieval system, NEC provides overnight replacements after asking little more

than one question (the printer`s serial number) on the phone.

Make it hard to copy. Customer data is an excellent example of a resource that

is very hard to copy. Benchmarking can help you figure out the resources that

you have and your competition does not. If you focus on resources that can be

copied, it will, at best, buy you a temporary competitive advantage. However, if

you focus on knowledge areas in which your employees possess skills, you can

make it immensely difficult for your competition to copy those without luring

away your employees. Consulting companies have known this for a long time,

and it`s about time you thought of applying the same idea to the knowledge

assets within your own company.

Make it hard to substitute. Whatever categories of knowledge that you focus on,

make sure that straightforward substitutes do not exist. Companies that thought

they had gained an edge by outsourcing a part of their manufacturing operations

to firms in Third World countries did not take long to realize that everyone else

could do the same. And they did.

Knowledge relating to skills, reputation, and experience cannot be easily

substituted with close equivalents. Make sure you focus on such areas when you

begin.
Benchmarking is unlikely to reveal such areas unless a high level of job

diversity in the employee pool that is involved in the effort).

Benchmarking practices often reveal anecdotal evidence and impressions about

competition

It`s dangerous to rely on such impressions because they cannot be generalized in

any

Benchmarking is most useful when you know what your expectations and

objectives are and

the process itself is closely tied to your firm strategic knowledge drivers.

HOUSE OF QUALITY AND QUALITY FUNCTION DEPLOYMENT

The House of Qua1ity approach was developed by Hauser and Clausing in an

original paper that appeared in the Harvard Business Review. This methodology

has been successfully adapted to link customer needs to business processes and

internal decisions.

HOUSE OF QUALITY METRICS MATRIX

Figure shows the basic House of Quality metrics matrix. We begin by listing

the desirable outcomes on the left wall of the house. As the quality function

deployment (QFD) method incorporates an increasing number of these desired

outcomes, the outcomes house begins to build up.

Be careful to select outcomes that are that observable without much delay and a

seen clearly. Being able to see outcomes clearly does not imply that they must

be easily measurable quantitatively. Outcomes can be high level or low level.

Examples of such target out- comes include:

? Improve knowledge sharing to a level where 20 percent of an average

employee`s work is based on existing knowledge.


? Speed up problem solving by a factor of 5 percent over the next six months.

? Improve quality such that the rate of failure of product X decreases by 15

percent within the next 12 months.

? Generate more conversations among employees in our Atlanta and Barbados

offices (a relatively vague but measurable outcome).

? Increase customer satisfaction levels by 50 percent

? Create a comprehensive knowledge repository on our Winblows 2004

(fictitious product) operating system for use by support representatives within

three years, etc.




























Although these should not exactly be your own goals, the point is that even

though some of the objectives might be high level, the outcomes are observable.

On the other hand, an objective like create new knowledge or dominate the

South American coffee markets (where the coffee market is a vague definition,

domination is not articulated, and the extent of what is considered South

American is unclear) is too vague. You`ll never know when you get there, and

when you get there you`ll never know that you are already there!

To attach relative priorities to each of these objectives, we attach weights to

each of them. These weights form the right-hand wall of the house and indicate

the importance of the issues in question. See Fig, for an example.

? Overall productivity of knowledge investments

? Service quality

? Customer satisfaction and the operational level of customer service

? Time to market in relation to other competitors

? Costs, profits, and margins Distribution

? Relationships and relationship management

Even though the term benchmarking probably did not exist when Aristophanes

made the above quote in 414 B.C., he said something very profound about it! By

benchmarking your own business against your competitor`s, you get information

on how to tweak your company`s performance goals to stay competitive in

relation to your competitors. Arthur Andersen, an international consulting firm,

perhaps took the first strike at the intimidating problem of measuring knowledge

work. Andersen developed a tool in association with APQC called the

Knowledge Management Assessment Tool (KMAT); it contained a series of

questions on a scale. Answers to these questions could then be compared to the
industry-specific and cross- industry averages of the responses. This process is,

in essence, benchmarking.

By using such a relative measure, all companies stand to gain. By knowing

where they stand on the intellectual forefront in relation to their competition,

companies can focus on improving processes and process knowledge in areas

where their scores are below average. Benchmarking, like any other business

process, is most likely to produce a payback when strategic business objectives

and goals drive it.

Benchmark Targets

Possible targets against which you can benchmark your company`s knowledge

management initiatives. You can identify other relevant targets from your own

company, from rival firms, from nonrival firms, or from averages representing

your industry or sector, Each has its own benefits and downsides, and the

choice, finally, is one of subjective judgment and weighted costs.

Stephen Drew proposed the original version of the target set that this table is

built upon. He also suggested that a possible target was international firms. I

disagree with this stand and have not included that as a potential target, since the

preceding options, by themselves, encompass international firms. Rarely do

American firms compete solely with domestic rivals.

There are companies that represent the ideal firm within each industry. Lacking

any other options. this is usually the best place to begin. These firms have

performance levels that other

WHAT DO YOU BENCHMARK AGAINST?
Benchmark Target

Upsides





Downsides



Other units within

This breaks down internal Internal policies might come into

your company barriers to communication

play; the measures are not





and conversation between

indicative of what is considered









various divisions and

performance in your

industry









offices of your company;

targets are easily accessible



Competing firms



Your company is measured

Legalities can make

this

against its direct competition; difficult; if a trusted

third party

you get a fair understanding

such as a consulting

firm

of the knowledge assets of

is brought additional

costs

your competitors as an are imposed.

aggregate; partners can easily

be identified.



Industry





All of the above; this also

This can be very

expensive;
lets you gauge your



privacy issues begin to

surface.

company`s standing in the

overall market.





Cross-industry



You might be able to gain

All of the above; this

does not let

valuable insights from you gauge your company`s

noncompeting firms and

standarding in relation

to your

apply them to your own competitors; the sample popu-

company.





lation is not truly

representative

of your own industry

or sector; it

is often difficult

participate in

such an effort; the cost

of such an

effort is rarely worth it

firms aspire to achieve. In the software industry arguably, every firm aspires to

be a Microsoft. In terms of customer loyalty every firm aspires to be an Apple

Computer Other examples, including some provided by Stephen Drew, of such

role models can be listed.
Although benchmarking can be a good starting point, you need to be aware of its

limitations.

Benchmarking, by itself, cannot be used as a strategy for knowledge

management. The best that it can do is provide a relative set of measures that

can help gauge what your efforts are leading to. Many companies, including

Xerox, have successfully used in their 10- steps program; however, it is not a

sufficient metric for knowledge work in and of itself.

THE BENCHMARKING PROCESS

On the lines of Xerox`s benchmarking program, M.J. Spendolini` has suggested

a five- procedure thy benchmarking efforts. An adapted version of this process.

applied to knowledge work is shown in Fig

Prevalent Role Models in the Benchmarking Process

Speed of product development



Netscape Corporation

Knowledge management integration

Buckman Labs

Knowledge management technology

implementation







Platinum Technology

Software development and marketing

Microsoft Corporation

Innovation and new product development 3M

Customer loyalty







Apple Computer

Brand Management





Disney

JIT manufacturing







Toyota

Logistics and enterprise-wide It leverage

Wal-Mart


Knowledge management measurement

efficacy









Skandia

Mail order







Dell, L.L. Bean, Lands End, Gateway

Franchising





McDonald`s

Quality Management



Motorola

Product line recognition



O`Reilly publishers

Strategic planning





General Electric

Cost-based competition through

E-machines Inc., Airtran, Southwest

Airlines, Apollo logistics and market demand



Printers

Volume

The benchmarking process can be used for self-comparison as well. That is, you

can use the benchmark to obtain an initial benchmark value before you

implement a knowledge manage- ment system or program. You can then, at a

later stage, run the same benchmark to see if any- thing improved from last time.

For example, you might want to see if your knowledge sharing network and

customer support repository have a positive effect on the average level of

customer satisfaction. You can benchmark the level of customer satisfaction

both before and after the new system is implemented and see if any changes

occurred. Be cautioned, however, that this is a slippery road: If you select the

wrong benchmark, you will end up focusing on the wrong set of processes.
















































BENCHMARK LESSONS

If you consider your company`s knowledge management system as a

competitive resource, then build into the four things that benchmarking teaches:

1. Make it valuable. Focus on including knowledge that is most valuable and

then expand the coverage to less valuable knowledge. The key phrase is

valuable knowledge with rel

The balanced scorecard can also be used to evaluate the impact of the

knowledge management system on four complementary criteria. The four

processes involved in using the balanced scorecard approach for managing

knowledge are described in Figure. These processes specifically put in the

context of knowledge management, involve the following steps.

1. Translate the knowledge management vision. As Figure describes, this is the

first process in the balanced scorecard strategy. At this stage, managers need to

reach consensus

as to why knowledge is being managed or needs to be managed. What are the

firm`s visions for the knowledge management investment? The vision needs to

be translated into concrete goals and objectives before any actions can be

measured. The beauty of the balanced scorecard is that it can be used to create

short-term, specific go individual employees, all of which feed to the

organizational vision.

While we are on the subject of vision, let me make it very clear that this rarely

comes by copying the mission statement! Mission statements often carry too

much fluff or are at too high a level to be actually useful. They need to be

brought down to the level where two people can agree on what it says after

reading the same documents and that is rarely the case with mission statements






that most companies have. That`s probably the reason why most mission

statements are updated only when the next year`s annual reports are due.












































2. Communicate and link. This lets you measure as you go along your objective

of selling the idea to your company`s employees. You can gauge how well your

employees are being trained to use the system as a part of their work. You can

also measure how well you have linked rewards to both the effective use and

contribution of knowledge. Here, the KM champion must communicate the

strategy along the entire rung of employees and demonstrate the links between

individual employee goals, and the departmental/organizational goals in terms of

leveraging knowledge.

3. Do a reality check. This part of the balanced scorecard strategy determines

how well your chosen metrics, explicated goals, targets, and allocated resources

align with the initial ideas you had in mind for the knowledge management

system.

4. Incorporate learning and feedback. The balanced scorecard lets you evaluate

the goals, metrics, and targets that you have chosen for your knowledge

management system and then analyze how well they are actually working.

In summary, the balanced scorecard approach lets you track the current health of

the knowledge management strategy that you have chosen for your company.

By replacing the original four perspectives with measures successfully used by

Skandia, a knowledge-based version of the balanced scorecard can be obtained.

The underlying implementation and use would be akin to the conventional

balanced scorecard method, but the measures provided will be those relating to

knowledge management. This way, the financial, customer-related, process-

capability-related, and employee-performance-related gains coming from the

knowledge management system can be simultaneously tracked.

The actual implementation and use of the balanced scorecard approach is

beyond the intended scope of this chapter. Now, you have a starting point for

applying the balanced score card to knowledge management. For



implementation level details, I recommend reading The Balanced Scorecard

(Harvard Business School Press, 1996) by Kaplan and Norton.

As Kaplan and Norton state, a balanced scorecard need not just have four

dimensions. It can have five, six, or seven. The only concern of going beyond

seven is that you have too much to keep track of and a lot of it isn`t even critical.

KPMG, for example, uses five different dimensions for its scorecards.

Although these choices seem reasonable, I recommend that you initially try

using the dimensions similar to those suggested in Fig, which are based on

Skandia`s Navigator and which the company has used very effectively. The

choice of dimensions is not set in stone. As long as you are sure about what you

are measuring and why you are measuring it, that variable has a justifiable place

on the balanced scorecard that your company adopts.

KPMG'S CHOICE OF DIMENSIONS FOR ITS BALANCED

SCORECARD

Balanced Scorecard Dimensions

Questions

Client Orientation







What do I want to achieve with my

existing Clients?

Market orientation







What am I going to do to decrease

existing client turnover and find new clients? What am I

going to do to strengthen my position

in the

business?

People orientation







What am I going to do to enable the

team that I

am managing to function better and to

help my

employees gain stronger

competencies?






Result orientation







How can I attain better results with the

same

inputs? How can I increase the added

value of

my teams and myself?



Personal effectiveness





What am I going to do in the coming

year to

improve weak points and strengthen

strong

points?



Professionalism





How do I keep abreast of the newest

developments?

How do I collaborate with my peers

more

extensively?



ADVANTAGES OF KM BALANCED SCORECARDS

The balanced scorecard has some characteristics that the other approaches

discussed in this chapter do not have. These characteristics make it especially

useful as a knowledge metric.

? Ability to provide a snapshot of the intellectual health of your firm at any point

in time.

? Built-in cause-and-effect relationships that can help you guide your knowledge

management strategy.

? Sufficient (neither too many nor too few number of performance drivers and

metrices.




? Capability to communicate the knowledge management strategy throughout

the firm.

? Capability to link individual goals with the overall knowledge strategy of the

firm. This implies that each employee can k his own and continue to contribute

toward the goals of the knowledge management system and strategy without

even realizing it!

? A direct, and often missing, link between long-term knowledge and

competence goals of the firm and its annual budget.

? Translation of the lofty visions of a firm into more doable, realistic,

manageable, and specific performance goals.

? Logical integration into the overall strategy of your business, and still make

sense.

? Objective measurement of the contribution of knowledge to the more

intangible sources of competitive advantage, such as customer satisfaction and

employee skills and competencies.

The selected objectives are grouped and listed on the left-hand side of the house

matrix.

The relative weights are assigned to each of these objectives on a scale of 1 to 5.

Some other tools let you attach weights on a percentage scale of 0 to 100, as

originally proposed in the House of Quality approach. A simple 5-point scale is

easier to track. than a 100-point scale, which only makes some decisions and

weight assignments both arbitrary and confusing.

Appropriate performance metrics can then be listed and clustered on the top of

the matrix (the ceiling). The matrix itself indicates the levels of correlation

between the metrics and the performance outcomes. Figure, for example, uses

three different symbols to rep resent these levels of correlation (high, medium,



and low). Alternatively, a numerical value can be used, The decisions and

metrics that also improve the outcome are said to have a high level of

correlation. The interrelationships between all these parameters are represented

on the roof of the house: By looking at the correlations within the body of the

matrix, we can accurately focus on those areas of knowledge management that

are most likely to affect overall company performance and help us move toward

preset goals.

SOFTWARE TOOLS FOR QFD ANALYSIS

A variety of software tools can help automate the QFD analysis process. One of

the more popular tools is QFD Designer (by Qualisoft Corporation) shown in

Figure. Software tools allow real-time evaluation of the percentage of fills along

different dimensions.

Skaridia`s Intellectual Capital (IC) annual report also provides indicators of

some other parameters that can be added to the House of Quality outcomes for

analysis of knowledge management effectiveness. Some ideas, including some

found in Skandia`s annual IC report, for such parameters are the following:

? Competence development expenses per employee in dollars

? Employee satisfaction

? Marketing expense per customer

? Time spent on systematic packaging of know-how for future use, after a

project is completed

? Research and development expense to overhead expense ratios

? Training expenses per employee

? Payback on development activities

? Average development time per new product



? Expense per dollar earned (e.g., in consulting)

? Renewal expense per existing customer

? Level of customer attrition

? Expense of business development (new customers) per dollar spent on

overheads

? Training expenses per customer per year in dollars

? Information-gathering expenses per existing customer

? Total competitive intelligence expense per year

? Expense (dollars) of distribution of new sales material and data

? Time spent per unsuccessful business bid

? Total number of patents held

? Number of patents pending

? Average time of approval for pending patents

? Employee attrition rate

? Dollar figure value of losses per employee lost

? Dollar figure value of tosses per employee lost to a competing firm

? Expense of reinventing solutions per year

? Success ratio of new products and/or services

? Number of ideas implemented from the suggestion box

? Total production capacity or internal production capacity (this can be applied

both to production and service firms)

? Capacity utilization





? Delivery time deviation rate

THE BALANCED SCORECARD TECHNIQUE

The third approach that is a viable method for measuring knowledge-centric

performance of your organization is the balanced scorecard approach. Kaplan

and Norton originally proposed the balanced scorecard in their landmark article

published in the Harvard Business Review. The balanced scorecard provides a

technique to maintain a balance between long-term and short; term objectives,

financial and non-financial measures, lagging and leading indicators, ad between

internal and external perspectives. The basic scorecard for translating vision

and strategy into actual goals is shown in Figure.









? Direct link to financial measures and your knowledge management system`s

effect on the company bottom line.

LIMITATIONS OF KM BALANCED SCORECARDS

On the downside, a well-designed balanced scorecard is more difficult to levels

a similar QFD/HoQ (House 0 Quality) model. It is rarely possible to directly

adopt another firm`s balanced scorecard because subtle differences exist even

between very similar However, there are some software tools that can make the

initial ride lesser bumpy, such as the balanced scorecard tool, Gentia Balanced

Scorecard, sold by Gentia Inc. (http://nee tia.com).

CLASSIFYING AND EVALUATING PROCESSES

This section touches on a very useful taxonomy that can help you classify sort,

and processes by their category. Understanding and classi5`ing processes helps

firms manage these processes as well as the knowledge that drives them. The

sales process, fore pie, might have very little to do with the sales department in

some high technology companies where primary customer interaction is with the

engineering staff. What can be readily used here is a taxonomy of processes that

has been developed by the American Productivity, and Quality Center (APQC)

benchmarking clearinghouse.

The process classification framework (PCF) was originally developed as a

collaborative effort across 80 organizations and envisioned as a taxonomy of

business processes in 1991. A primary issue with the PCF continues to be the

enablement of process benchmarking across industry boundaries. The utility of

this process taxonomy is not just limited to benchmarking. It can be used to

better structure the clustering of processes and functionalities your own

company. The biggest strength of this framework comes from the fact that it was

built by the joint effort of almost 100 U.S. organizations, many 0 which had an

inter al presence.



The APQC process classification framework serves as a high-level, generic

enterprise model that encourages businesses and other organizations to see their

activities from a cross-industry process-oriented viewpoint rather than from a

narrow, functionalist viewpoint. The process classification framework supplies a

genetic view of business processes often found in multiple industries and sectors

and service companies, health care, government, education, and. others, thereby

allowing companies to compare processes meaningfully to other, different

organizations.

The process classification framework represents major processes and sub

processes, functions, through its structure and vocabulary. The framework does

not list all processes found within any specific organization. Likewise, not every

process listed in the framework present in every organization.

THE APQC PROCESS CLASSIFICATION FRAMEWORK

1.0

UNDERSTAND MARKETS AND CUSTOMERS

1.1

Determine customer needs and wants

1.1.1 Conduct qualitative assessments

1.1.1.1

Conduct customer interviews

1.1.1.2

Conduct focus groups

1.1.2 Conduct quantitative assessments

1.1.2.1

Develop and implement surveys

1.1.3 Predict customer purchasing behavior

1.2

Measure customer satisfaction

1.2.1 Monitor satisfaction with products and services

1.2.2 Monitor satisfaction with complaint resolution

1.2.3 Monitor satisfaction with communication

1.3

Monitor changes in market or customer expectations

1.3.1 Determine weaknesses of product/service offerings




1.3.2 Identify new innovations that are meeting customer needs

1.3.3 Determine customer reactions to competitive offerings

2.0

DEVELOP VISION AND STRATEGY

2.1

Monitor the external environment

2.1.1 Analyze and understand competition

2.1.2 Identify economic trends

2.1.3 Identify political and regulatory issues

2.1.4 Assess new technology innovations

2.1.5 Understand demographics

2.1.6 Identify social and cultural changes

2.1.7 Understand ecological concerns



2.2

Define the business concept and organizational strategy



2.2.1 Select relevant markets

2.2.2 Develop long-term vision

2.2.3 Formulate business unit strategy

2.2.4 Develop overall mission statement

2.3

Design the organizational structure and relationships between

organization al units

2.4

Develop and set organizational goals

TABLE THE APQC PROCESS CLASSIFICATION FRAMEWORK

(CONT.)

3.0

DESIGN PRODUCTS AND SERVICES

3.1

Develop new product/service concept and plans






3.1.1 Translate customer wants and needs into product and/or

set requirements

3.1.2 Plan and deploy quality targets

3.1.3 Plan and deploy cost targets

3.1.4 Develop product life cycle and development timing

targets

3.1.5 Develop and integrate leading technology into

product/service concept



3.2

Design, build, and evaluate prototype products and services



3.2.1 Develop product/service specifications

3.2.2 Conduct concurrent engineering

3.2.3 Implement value engineering

3.2.4 Document design specifications

3.2.5 Develop prototypes

3.2.6 Apply for patents



3.3

Refine existing products/services



3.3.1 Develop product/service enhancements

3.3.2 Eliminate quality/reliability problems

3.3.3 Eliminate outdated products/services



3.4

Test effectiveness of new or revised products or services



3.5

Prepare for production



3.5.1 Develop and test prototype production process




3.5.2 Design and obtain necessary materials and equipment

3.5.3 Install and verify process or methodology



3.6

Manage the product/service development process



4.0

MARKET AND SELL



4.1

Market products or services to relevant customer segments

4.1.1 Develop pricing strategy

4.1 .2 Develop advertising strategy

4.1.3 Develop marketing messages to communicate benefits

4.1.4 Estimate advertising resource and capital requirements

4.1.5 Identify specific target customers and their needs

before you begin the process externally. Remember that benchmarks do tell you

what to do next, but not how to do it.

QEDs relate high-level goals to discrete actions. QEDs let you link goals,

relationships, perceived significance, and outcomes for each strategic step

that you take with your knowledge management system. QFDs integrate

inputs from all stakeholders and provide explicit direction for enhancing

your company`s knowledge management strategy. QFDs can be automated

to a fairly high degree with readily available soft ware. You can translate

high-level goals to specific tasks, and these tasks can further be

decomposed into measurable and manageable actions.

The balanced scorecard links strategy, technology, competitiveness, and

knowledge management. The KM BSC method helps you translate the

knowledge management vision into action, communicate the KM strategy

bottom up validate your choice of metrics, and analyze results of knowledge




management in the long run. It will provide a robust direct link between

knowledge management, the system, your company`s clients, markets,

people, results, and profitability.

Do not ignore the soft stuff Metrics must take both hard and soft results into

account to present a true picture of your firm`s intellectual health.

Metrics in the rearview minor appear more significant than they are. Ask

yourself: Do we have metrics that can serve as early warning signals for

future problems and those that signal future opportunities?

In conclusion, we need to take a closer look at the cases of some companies

representing a diversity of industries. All of them have one thing in common:

They are immensely successful both from a competitive standpoint and a

financial one because they realized the value of knowledge management and

appropriately put their idle knowledge to work, and work hard.

Review Questions

1. Discuss the contributions of team managers in implementation of HRIS

in the organization.

2. Discuss the concept of Balance Score Card in detail.

3. Discuss the APQC classification framework.

4. Discuss the contribution of experts and consultants in managing the

HRIS of an organization.




Unit - V

CASE STUDIES

OBJECTIVES



Understand how high performance companies manage knowledge.



Understand process distribution in successful knowledge management

projects.



analyze HRM in KBO and km case studies from the aerospace ,

software, consumer technology, telecommunications, publishing, consumer
products, pharmaceuticals and consulting industries.



understand the strategic alignment of a successful knowledge

management project with existing business processes.



understand how your knowledge management project can build both

upon the failures and success of these companies.

Introduction

In this unit we will take a closer look at some companies that have implemented

knowledge management system. Their outcomes have had mixed results. Some

have fallen flat while others have provided their organizations with an

unprecedented competitive advantage. There is a lot to learn from these early.

Pionee5rs who dared to make that leap of faith in the face of analyzing the

HRM in KBO and rewarding the compensation.

HRM performing knowledge management projects how focused on activities

involving delivery and production of services, customer support, competitive

intelligence and external knowledge integration, project management in virtual

teams, sales enablement and intellectual asset management.

This unit will give you an idea about the areas on which you must focus your

knowledge management investments. The common failure points in a




knowledge management system was found to be the lack of commitment or

resources for managing the system once it was implemented.

Case 1

Knowledge management in the aerospace industry the case of rolls Royce

Introduction ? rolls Royce was founded in 1906. in addition to making

expensive cars. Rolls Royce is also a market leader in the long- haul aircraft

engines market. As of 1999, rolls Royce was serving about 300 commercial

airlines where its competitive stance was the total cost of ownership.

The problem ? the problem with rolls Royce was that everything that was done

to maintain engines was time sensitive. However 20 million pages of paper.

documenting a variety of aspects of aircraft engine parts ( refer table 1) were

produced by the company. Each engine model had over 20 variants. Each

variant needed to be serviced differently about a 100 airlines with which rolls

Royce had active relationships were based in other countries. Even with several

gigabytes of data in the companies mainframes it was often difficult to get the

right piece of information in time. The consequences were not just limited to

productivity and financial health of the company but also linked to safety of the

aircraft that company employees worked on.

Problem scope ? rolls Royce decided to scope the problem down to the critical

issues that had immediate paybacks for the firm. They decided that the key

players to be considered would be limited to



Airlines



Airframe manufacturers



Engine and engine part manufacturers



Component manufacturers






It was also decided that the scope of the initial knowledge management project

would be restricted to enabling different levels of reuse. mechanisms that would

allow workers to find use reuse and reintegrate knowledge related to servicing

long haul commercial engines.

Such scooping is essential to place reasonable limits on the expectations from a

knowledge management system. scooping helps firms figure out if the targets of

their knowledge management investments are the one that need immediate

attention both in terms of business sense and strategic urgency.

Rolls Royce and referential sources of knowledge.

Air craft

Referential knowledge

Trent 700

Engine maintenance manuals

Trent 800

Illustrated catalogs of parts

RB 211 - 524

Supply diagram

RB 211 ? 535

Service bulletins



Time limits manuals



Standard practices



Overhaul manuals



Maintenance manuals

Tay



IAE V2 500 A1A5



IAE V2500 ? D5








Knowledge management project goals

Rolls Royce was very good at laying out realistic and achievable goals up front.

The initial set of goals specified for the KM systems were classified in two

broad categories.



Customer oriented goals-these were goals that would accrue benefits for

the customer

1.

reducing equipment downtime for maintenance

2.

doing it right for the first time

3.

improving maintenance quality

4.

improving maintenance scheduling

5.

reducing data handling as well as access and search costs.



Internal goals ? these were the benefits in terms of improved internal

efficiency that were expected from the rolls Royce knowledge management

system. The knowledge management team hoped that the new system would

help the company in the following ways.

1.

improve customer data access across multiple platforms

2.

deliver applications that required little or no training

3.

reduce publishing costs, ensure security and comply with ATA( air

transport association )

Measurement ? lacking any other mechanisms for measurements, rolls Royce

measured its return on investment by using surrogate financial measures.

Most of these figures were translated into dollar figures as shown below.



Paper costs saving of $3 million



Customer productivity savings worth $1 million






5% improvement in maintenance time



un measured savings in data processing costs.

Solution ? this system resembles the improved version of an intranet. It had user

specific table of contents a customizable interface, the ability to add

annotations, provided dynamic updates and delivered notifications.

Case 2 knowledge management in sales and marketing ? the case of platinum

technology

Platinum technology inc based in Oakbrook terrau. Illinois is a company on the

first track with close to $ 800 million in revenues in 1997 lane platinum has

been on an acquisition war path since 1994. between 1994 and 1998 the

company brought out 70 other companies.

The series of acquisitions resulted in a 500 percent growth I n its portfolio of

product offerings. Platinum has almost 7000 employees and has been a six fold

growth in its sales force head count since 1995. these employees are distributed

across platinum`s 120 offices world wide.

Platinum realized early on that managing the companies knowledge assets was a

critical enabler that would allow it to sustain this growth with strong

commitment from senior management platinum has been exploring the use of

knowledge management in the following areas of operation.



Sales and marketing



New product development



Contracting and outsourcing



Customer and partner interaction knowledge management



Consulting






Education

In the sales and marketing division alone an employee has a number of potential

sources that she can tap into for information needed to make a sale or to pursue

a prospective customer these include



Over 100 lotus notes databases



Two custom developed applications



35 intranet sites



Thousands of networked disk drives



Printed documentation



Discussion forums

The problem

Platinum`s marketing and sales department was faced not with information

paucity but with information overload and redundancy. Even if an employee

making a sales call could retrieve information that see needed she would com e

across multiple versions of it in different locations. There was no telling what

content was current and applicable. To overcome these challenges, platinum`s

marketing and sales department took its first step towards building a

comprehensive knowledge management system.









The system

The knowledge management system that platinum built was called jaguar.

Jaguar began with two components an intranet based system that contained

detailed documents and information and jaguar direct a machine resident bullet

style nugget information repository. The system was built on documenters

EDMS software and easy software from wisdom aware for capturing context




and tacit forms of knowledge. The driving web servers were based in the united

states , Singapore and Europe and were supplemented with fortnightly updated

notes databases replicated on 65 servers worldwide. Since the system was meant

to support sales and marketing staff it provided the following information



Platinum`s products



Current pricing



Competitive information



Enterprise wide information including that about other divisions of the

company



World wide sales calendars



Information on platinum`s partners



Details ion mergers and acquisitions that were relevant to the company



References to documents and manuals



Subscription service that allowed users to subscribe to content of interest

Development stages

Platinum started at the point where it was easy to get a stable start managing

explicit knowledge. Only later did the company proceed to manage tacit forms

of knowledge. The system made extensive use of icons to represent different

types of content and each intent element and meta data attached to it. Easily

recognizable icons were used to identify information that was newer than two

weeks and information that had changed in the preceding seven days. As a

knowledge management team member put it, we are a very visual society sop

we made excessive use of icons. Ridiculous? Yes ! but effective ? yes !




Through out the development process the knowledge management team asked

the actual sales staff about what seemed to work and what did not., based on

their feedback the systems developers promptly incorporated relevant

suggestions and features. The companies knowledge champion says that over

50% of the enhancements came from end user suggestions. As a result about 40

% of the companies sales force personnel use of the system daily. With such an

exceptionally high level of usage, platinum found that banner advertisements

with in the site were the most effective way of making company wide

announcements.

Throughout the development process the knowledge management team asked

the actual sales staff about what seemed to work and what did not. Based on

their feedback the systems developers promptly incorporated relevant

suggestions and features. The companies knowledge champion says that over

50% of the enhancements came from end user suggestions, as a result about

40% of the companies sales force personnel use the system daily. With such an

exceptionally high level of usage, platinum found that banner advertisements

with in the site were the most effective way of making company wide

announcements.

At a later stage, the system introduced push content delivery. Users should

select content areas that were of interest to them. As new content came in users

could either opt to receive it in an e-mail message or go to a personalized page

on the site and follow hyperlinks pointing them to new relevant information as it

became available. General updates were automatically sent every Sunday. The

company hopes that analyzing usage statistics on jaguar it can

predict sales

activity Ahead of time. To ensure the content is relevant and up to date emails

are sent to contributors by the system one week before an expiration date. If

they do not review their contribution, it gets archived, since the additional

burden of validating and reviewing their own contributions was placed on



employees, platinum made sure that they were given extra time to spend on the

task.

The initial version of the system was implemented with in four months of its

initial approval. The system was so successful that it became the second most

widely used application in the company next only to email.

Measurement :

Lacking any other formal mechanisms for demonstrating a return on investment

for their knowledge management investments, platinum demonstrated the

success of its system entirely in terms of the financial benefits. Benefits

quantified in terms of their effect on the companies bottom line are easier to sell

to senior management. the knowledge management teams quantified benefits in

the following terms.

The system paid for itself in 1.5 months

The knowledge management system resulted in cost savings of about $ 6

million in its very first year.

Sales force productivity increased by a then current run rate of 6%

The system reduced international FedEx shipments by 15% ( primarily

resulting from the savings resulting from not having to produce and

distribute lotus notes and database CD-ROM updates to several dozen

offices worldwide, every few weeks.)

The knowledge management team further estimated that jaguar saved an

average sale a and marketing person about two hours every week, created a

bottom up pull of knowledge and contributed to the competitive stand of the

firm as a whole. Although the aforementioned benefits delivered a lot more

value to the company, the knowledge management team initially quantified




these benefits only in terms of FedEx savings that resulted from the introduction

of this system. by choosing such a metric the KM team was able to successfully

demonstrate the tangible benefits of the system ( even though one might argue

that they were pessimistically underestimated)

Case 3- knowledge management in customer support - the case of Nortel

Nortel corporation sells a suite of design and manufacturing applications in the

united states and Europe. The global support group provides support to both

European customers and units states. There are group of support personnel in

both the united states and Europe. Nortel is required to provide 24 hour support,

seven days a week, with limited budgets and restricted head counts of workers.

Issues ? Nortel was facing problem providing support to its customers

primarily because there was no suitable mechanism that allowed a support

representative to check if anyone in the support organization had encountered a

citation problem before. This meant that the teams in different offices did not

share any of their knowledge related to problem solving and ended up

reinventing solutions time and again. Nortel identified several knowledge

related problems that its support group faced.

Unclear definition of roles and responsibilities of personnel

Lack of a formal process and guiding documentation

Informal service level agreements

Inconsistent measures of customer satisfaction

Lack of formal training for support staff

No centralized collection of repository of predefined solutions

European and US offices operating as groups of teams rather than as a

single distributed team




Excessive rework and reinvention of solutions ( no formal mechanism for

capturing problems and solutions existed)

Lack of knowledge sharing between teams based in the two continents.

The three phases of organizing knowledge

The support group knowledge management team at Nortel decided to manage

knowledge more effectively, hoping to help the support group perform better,

given budget and head count constraints,, they decided to tackle the whole

process of managing knowledge in three discrete steps.

Phase 1: capturing knowledge and processes that were being used by their

American and European support offices.

Phase 2: consolidating these processes to provide an environment for co

operative trans pacific problem solving.

Phase 3: implementing integrated systems to enable collaborative knowledge

intensive processes.

Nortel began by bringing in an external consultant who interviewed support

staff both in Europe and the United States. After receiving positive feedback

from these interviewees, the knowledge management team concluded that it had

the support of prospective end users. to gain acceptance, the external consultants

presented their understanding of the process to key stakeholders and support

staff. Following this feedback from employees was incorporated into the

process descriptions that the consulting company had written. The processes

identified were then classified into different areas of process ownership. Roles

were assigned to each area on the basis of training provided to support

employees.






Nortel support staff members were then trained in terms of the new integrated

process that were synthesized, as a final step, Nortel implemented an integrated

progress tracking system that allowed team members to track progress on

solving a problem s teams across the globe worked on it. The final step in terms

of support technology was the implementation of a centralized database where

all problems and their outcomes were recorded.

Although the implementation done by Nortel seems to be less sophisticated in

comparison to some other companies knowledge systems its results were

delivered exactly where they were needed most. Remember that esoteric notions

of organizational good cannot drive knowledge management until it is helping

the company solve critical process problems and eliminating knowledge related

problems that are threatening to bring the company down. Nortel expended

more effort on the people side than it did on the technology side: a perfect way

to begin when the processes themselves are not clearly understood or explicitly

defined. The lesson here is that the problem should define knowledge

management technology, technology should define the problem. The effort paid

strong dividends. Nortel is a leading provider in its markets and enjoys high

levels of customer loyalty.

Case 4 knowledge management in the semi conductor industry ? gasonics

international

Gasonics is a company operating out of north America, Europe, Asia and the

pacific rim with annual revenues in the range of $120 million. gasonics

produces processing systems for fabrication of semiconductor wafrs. companies

manufacturing electronic chips for use in electronic equipment use systems such

as the ones that the gasonics produces.






Gasonics systems have for a long time enjoyed a reputation for high reliability

and low systems downtime when compared to industry averages. The company

depends on its customers for feedback and it extensively uses this feedback to

improve both its existing systems and services. Faced with extremely low

margin like other competitors operating in the industry, gasonicse operating

costs and improve internal efficiencies since the whole process of designing and

building wafer processing equipment is knowledge intensive, gasonics decided

that the answer lay in stream lining its use of internal knowledge.

The Starting Point : Technical Publications

The technical publications department wrietes , typests, updates, provides and

support technical manuals, literature and other information that support gasonics

products. The company found that its technical publications department was an

increasingly major cost centre for four reasons.

1.as equipment sold by gasonics was expensive, typically over $1000000 a

piece downtime costs for customers resulted in thousands of dollar worth of

loses every time the system went down. Hence the technical publications

department at gasonics needed to provide an increasingly high number of

customers custonmised version of their publications, this in effect is similar to

mass customization.

2.updates were frequently required.

3.customers demanded electronic versions of product manuals.

4.the cost of archiving old documentation was increasing at an abnormal rate.

Gasonics realized that its technical publications department was the most logical

place to begin its knowledge management initiative. since the goals of the

business unit and the technical publications departments were highly congruent,

improving one the company hoped would improve the other






The below table shows the two se4ts of objectives.



Technical publications department Business unit goals
goals



Speed up delivery of technical

Reduce training and support costs

Documentation



Improve usability of documentation Increase equipment uptime Reduce
and application manuals

training and support costs



Improve content and currency of Increase equipment uptime, increase
publications

service revenues, reduce training and
support costs, improve customer



service through better feedback
mechanisms.

Link publications to other enterprise Improve customer service
resources



Make

technical

literature, Improve

product

and

service

documentation and publications easily offerings, improve customer service.
accessible.



The goal : three months to target

Gasonics planned for a knowledge management system that could be

operational within three months. the challenges that came up included:








The need to replace legacy data and paper based information with

consistent and accurate electronic data equivalents.



The ability of customers to customize product and service documentation

electronically.



Integration with other enterprise systems.



Justification of costs involved in doing the above.

Gasonics reduced paper related costs by 50% immediately. besides this obvious

financial benefit, the company reducing training costs used technicians instead

of engineers for providing support, and improved the quality of solutions

provided by making maintenance efforts work right the first time more

frequently than it had done in the past.

Case 5 knowledge management pilot case : Monsanto nutrition and consumer

products

Monsanto a Chicago based company with over 2000 employees is the owner of

leading brands of nutrition products such as nutria sweet and equal. The

employee base consists of sales, marketing, research, manufacturing and

administrative personnel. Monsanto began its knowledge management efforts

with a small community of analysts consisting of marketing and business

strategy analysts. This effort served as a pilot project for the large scale

deployment of its knowledge sharing network based on plum tree knowledge

server. As john Ferrari the process and technology manager at Monsanto aptly

puts it you do not want to focus too much time and energy into solving

technology problems; focus on process issues and use off the shelf customizable

applications where possible.






By using a pilot deployment, Monsanto identified the areas in which expected

problems of deploying a large scale, organization wide knowledge management

system were concentrated. The pilot implementation led it to believe that about

75% of the issues were concentrated. The pilot implementation led it to believe

that about 75% of the issues were people, process and culture. Technology the

easy part was the remaining 25%.

Case 6 Knowledge Management To Build Economies Of Reuse ? The Case Of

Texas Instruments

Texas instruments the semiconductor firm that is credited with

commercialization of the integrated circuit ( also known as an electronic chip),

began its knowledge management initiatives centered on its technical literature

and documentation. As one would expect .TI has over whelming amounts of

data relating to its semiconductor products this data needs to be managed

updated and effectively distributed. for example

TI has about 3100 data sheets relating to its semiconductor products. each of

these average about 12 pages in length.

TI produces and maintains about 50 user guides each of which averages 250

pages.

TI supports its products with 400 application notes each of which is between

2 to 100 pages in length.

TI maintains 14 gigabytes of SMGL files and 12 gigabytes of meta data.

TI revises about 90000 pages of documentation every year

TI has about 100 technical writers, 5 illustrators and 10 team leaders who

collectively manage this process.






Texas instruments decided to change these work processes so that they would

be better aligned with the ways in which documentation staff worked on these

documents and technical literature. the focus was on creating content in a

manner that allowed ease of reuse and enabled production of multiple outputs

from a single input or data source. By toggling all content, I hoped to be able to

manage context along with associated data. I uses the notion of a fundamental

shift to describe this process migration from document thinking to object

thinking.

To make this shift happen the knowledge management team actually converted

all paper documents to an electronic form. These expense of the conversion

process was justified on the basis of the following.

Cost containment ?reusing portions of existing documents resulted in cost

savings of up to 70% of the cost o new documents.

Value added ? by adding non textual information to documents ( such as

code, models, executable files and demo files)additional context was added

to knowledge that was well explicated and codified.

Reduced labor cost ? it took fewer people to do the same job so savings in

employee compensation were a direct outcome.

The important lesson to take from this highly specialized initiative that

primarily focused on managing already confided knowledge is that a good place

is to begin knowledge management is with content that is already there.

Creating meta data for that content is the next logical step. but Jeff Barton of

Texas instruments warns that creating such met can be the expensive part of the

process.

Conclusion ? we looked at cases analyzing knowledge management projects in

some of the most innovative pioneers in knowledge management. We examined




the strategic drivers for knowledge management have put these programs into

place primarily as a vehicle for increasing revenues and cost containment. The

common thread running through most of these cases was an intent to leverage

best practices, improve collaboration, profit from knowledge, strengthen

organizational competence, widen competitive gaps and leverage expertise.

Clearly identify the business objectives that drive knowledge management. All

these companies have demonstrated their ability to show tangible even if small

returns on their knowledge management investments otherwise it is all too easy

to lose focus of what the project is supposed to actually accomplish.