Knowledge

Management
[email protected]

Knowledge
Management Landscape
There has been a surge of interest in
knowledge management.
Knowledge Management System have
become one of the fastest- growing
areas of corporate and government
software investment.
Why bother with KM?

Why bother with KM?

WHY?
 Why Knowledge
Management ?
The emergence of information economy
and the digital firm, in which the major
source of wealth and prosperity are from :
The production and distribution of
information and knowledge
How firms increasingly rely on digital
technology to enable business process

Review data and

information
Data is a flow of events or transaction
captured by an organization’s system
that, by itself is useful for transaction
but little less.
Information is useful form of processed
data
Relationship with knowledge?
Knowledge is the transformation from
information
Firm must expend additional resources to
discovers patterns, rules and context where the
knowledge work.
Finally, wisdom is thought to be the collective
and individual experience of applying
knowledge to the solution of problems

Quantum Value

Wisdom Wisdom

Knowledge Knowledge

Information Information

Data Data
 Knowledge

Knowledge is cognitive, even physiological,

event, that take place inside people’s head.
Also stored in libraries and records,
shared in lecturers; and stored in the form
of business processes and employee know
how.

Resource base in 21st century

enterprise

Hard Soft – difficult to

Commodities isolate & value

Tangible Intangible Intangible Latent

Assets Goods Competence Capabilities

Tangible assets Rights that can Non-price Potentially unique

where ownership be bought, sold, factors competitive
is clear & stocked, traded of factors within
enforceable in disembodied competitive the firm’s
form & advantage capability
generally
protected
Source: Prism Report
Invisible Balance Sheet

http://www.sveiby.com/images/Nokia1.gif

Invisible Balance Sheet

http://www.sveiby.com/images/Nokia2.gif
 Infosys Invisible Balance Sheet 1999
Infosys is an Indian multinational provider of business
consulting, technology, engineering, and outsourcing services
(revenue 2012: US$ 7 b)

Assets Finance
Cash Debt
Equipment $181 mn Visible Equity $162 Mn

External Structure

Intellectual Capital
Customer Capital
Goodwill Assets

Internal Structure
Invisible Equity
Intangible

Structural Capital
~$8800 Mn

Indiv. Competence
Market Value ~$8900 Mn
Human Capital

© Karl Erik Sveiby 1997-1999 All rights reserved

Knowledge
Knowledge residing in the minds of employees
that has not been documented is called tacit
knowledge.
Knowledge that has been documented is
called explicit knowledge. (Consists of
Structured and semistructured knowledge)
Knowledge can reside in email, voice mail,
graphics, and unstructured documents as well
as structured documents.
 Two types of
Knowledge
Tacit (subjective) Explicit (Objective)

Knowledge of experience Knowledge of rationality

(body) (mind)

Simultaneous Knowledge Sequential Knowledge (there

(here & now) and then)

Analog K (practice) Digital K (theory)

Organizational learning and

knowledge management
Organization create and gather knowledge
using a variety of organizational learning
mechanism
Organizations that learn then adjust their
behavior to reflect that learning by creating
new business processes and by changing
patterns of management decision making
 Personalisation vs
Codification
Codification
• Capturing what we know in accessible forms

• Databases, expert systems, templates, books etc

Personalisation
• Delivery on knowledge “just in time”

• Knowledge sharing,communities of practice

Technology can support both

Evolution of business
Early Industrial Industrial era Knowledge era
Plan Vision Emergence
Management
Organise Value Integrity
Focus
Control Empower Relationship
Structured
Functions Process Systems
Around
Social Work and
Individual Task Communities
Structure Project Teams
Strategic Financial Capital Knowledge and
Raw Material
Resources and Information Intangibles
4 Modes of Knowledge
conversion
Tacit K to Explicit K

Tacit K

from
Explicit K

Nonaka & Takeuchi

4 Modes of Knowledge
conversion
Tacit K to Explicit K

Tacit K Socialisation

from
Explicit K

Nonaka & Takeuchi

 Socialisation

Socialisation is a process of sharing

experiences and thereby creating tacit
knowledge such as shared mental
models and technical skills.

4 Modes of Knowledge
conversion
Tacit K to Explicit K

Tacit K Socialisation Externalisation

from
Explicit K

Nonaka & Takeuchi

 Externalisation

Externalisation is a process of
articulating tacit knowledge into
explicit concepts. Tacit knowledge
becomes explicit through metaphor,
analogies, concepts, hypotheses and
models.

4 Modes of Knowledge
conversion
Tacit K to Explicit K

Tacit K Socialisation Externalisation

from
Explicit K Internalisation

Nonaka & Takeuchi

 Internalisation

Internalisation is a process of
embodying explicit knowledge into
tacit knowledge. It is closely related to
“learning by doing”.

4 Modes of Knowledge
conversion
Tacit K to Explicit K

Tacit K Socialisation Externalisation

from
Explicit K Internalisation Combination

Nonaka & Takeuchi

 Combination

Combination involves systematising

concepts into a knowledge system.
Different bodies of specific knowledge
are combined and reconfigured.

Knowledge management
value chain
Knowledge management refers to the
set of business processes developed in
an organization to create, store,
transfer, and apply knowledge
• Consist of :
•Knowledge acquisition
•Knowledge storage
•Knowledge dissemination
•Knowledge application
 Knowledge business value chain

Knowledge acquisition
•Organizations acquire knowledge in number of ways.
•The first knowledge management systems sought to build
corporate libraries of documents, reports, presentations,
and best practices and encouraged employees to create
documents based on their experiences.
•These efforts have been extended to include
unstructured documents

•In other cases, organizations acquire knowledge by

developing online expert networks so that employees
can “find the expert” in the company
 Knowledge storage
•Once they are discovered, documents, patterns, and expert rules
must be stored so they can be retrieved and used by employees.

•Document management system that digitize, index and tag

documents according to coherent framework are large databases
adept at storing collections of documents.

•Management must support the development of planned

knowledge storage systems, encourage the development of
corporate-wide schemas for indexing documents

Knowledge
dissemination
•Portal, email, instant messaging, and search
engine technology have resulted in an
exploration of knowledge and information
dissemination.
•Contemporary technology has created a
deluge of information and knowledge. How
can managers and employees discover, in a
sea of information and knowledge
 Knowledge application
•To provide a return on investment, organizational
knowledge must become a systematic part of
management decision making

•Ultimately, new knowledge must be built into a firm’s

business processes and key application systems,
including enterprise applications for managing crucial
internal business processes and relationships with
customers and suppliers.

Knowledge Café

Why might a company’s tacit

knowledge be more valuable that the
explicit knowledge it possesses?
Organizational roles and responsibilities
1.Chief knowledge officer executives
2.Dedicated staff / knowledge managers
3.Communities of practice (COPs)
•Informal social networks of professionals and
employees within and outside firm who have similar
work-related activities and interests
•Activities include education, online newsletters,
sharing experiences and techniques
•Facilitate reuse of knowledge, discussion
•Reduce learning curves of new employees

Types of knowledge Management System

Enterprise- wide Knowledge Management System
Collect, store, distribute and apply digital content
and knowledge
Knowledge Work System
Specialized systems built for engineers, scientist
and other knowledge workers charged with
discovering and creating knowledge for company.
Intelligent Technique
Diverse group of techniques such as data mining
used for various goals: discovering knowledge,
distilling knowledge, discovering optimal solutions.
 Major type of knowledge
management systems

Enterprise- wide Knowledge

Management System

Capabilities for storing both structured and

unstructured data; tools for locating employee
expertise within the firm, and capabilities for
obtaining data and information from transaction
Include supporting technologies such as portal,
search engine, and collaboration tools
 Enterprise- wide Knowledge
Management System
Three major types of knowledge in
enterprise:
1. Structured documents
Reports, presentations
Formal rules
2.Semistructured documents
E-mails, videos
3.Unstructured, tacit knowledge
80 percent of an organization’s business content
is semistructured or unstructured.

Enterprise wide knowledge work

system
Enterprise content management systems
•Help capture, store, retrieve, distribute,
preserve
•Documents, reports, best practices
•Semistructured knowledge (e-mails)
•Bring in external sources
•News feeds, research
•Tools for communication and collaboration
•Blogs, wikis, and so on
 Types of knowledge
Explicit Knowledge consisted of:
Structured knowledge, in form of structured text
documents and reports or presentations
Structured Knowledge System
Semi structured Knowledge, in form of less
structured documents.
Semi structured Knowledge System

Enterprise content
Management System
 Types of knowledge
Systems for structured and semi
structured knowledge function as
knowledge repositories
Knowledge repository is a collection of
internal and external knowledge in a
single location for more efficient
management and utilization by the
organization

Types of knowledge

Knowledge resides in the heads of

experienced employees somewhere in the
company, as Tacit knowledge
Building network that connects knowledge
demand with knowledge supply
 Types of knowledge
Knowledge Category of
Type of knowledge
Content Enterprise KMS

Structured Structured
Formal documents
knowledge knowledge system

Semi structured Email, voices, memo, Semi structured

knowledge brochure, etc knowledge System

Individual expertise Knowledge Network

Tacit knowledge.
and experience System

Structured Knowledge System

Structured Knowledge is explicit knowledge that
organizations derive by observing experts and
their decision- making behaviors
Structured Knowledge System perform the
function of implementing the coding schema,
interfacing with corporate database, and creating
an enterprise portal
 Structured Knowledge
System

All the major accounting and consulting

firms have developed structured document
and engagement-based (case-based)
repositories of reports.

Semi structured
Knowledge System
The digital information in a firm that does not
exist in a formal document or formal report that
was written by a designated author
It has been estimated that at least 80% of
organization’s business content is unstructured,
such as information in folders, messages, memos,
proposal, email, presentation slides, and even
video.
Semistructured Knowledge
System
It might be convenient or cost effective not to
know this information
Laws such as Sarbanes Oxley Act (2002), requires
financial service firms to keep records in the
origins of all material corporate documents,
including email, brochures and presentations, and
strict internal controls governing their storage.

Semistructured
Knowledge System

The essential problem faced by managers

is building a database and technical
infrastructure that collect such semi
structured information and organize it in
coherent fashion
 Enterprise content management
(ECM)
Enterprise content management (ECM) systems help organizations
manage both types of information.

They have capabilities for knowledge capture, storage, retrieval,

distribution, and preservation to help firms improve their business
processes and decisions.

Such systems include corporate repositories of documents,

reports, presentations, and best practices, as well as capabilities for
collecting and organizing semistructured knowledge such as email

Supporting Technologies
Learning Management System provides tools for
the management, delivery, tracking, and assessment
of various types of employee learning and training
LMS also software type for elearning supporting in
academic world
Massively open online courses (MOOCs)
Web course open to large numbers of par2cipants
 Locating and Sharing Expertise
Some of the knowledge businesses need is not in the form of a
digital document but instead resides in the memory of individual
experts in the firm.
Contemporary enterprise content management systems, along
with the systems for collaboration and social business
These include online directories of corporate experts and their
profiles with details about their job experience, projects,
publications, and educational degrees, and repositories of expert
generated content

Knowledge work
system
Knowledge workers (researcher, accountant,
auditor, consultant) usually have high level of
education and membership in professional
organizations and are often asked to exercise
independent judgment as a routine aspect of their
work.
 Knowledge work
system
KWS are specifically designed to
promote the creation of knowledge
and to ensure that new knowledge and
technical expertise are properly
integrated into the business.

Requirement of KWS
Specialized tools such as graphics, analytical
tools, and communications and document
management tools
Quick and easy access to external database
Examples : Computer Aided Design, Wiki to create report.
 knowledge work
system

Intelligent Techniques
✓Intelligent techniques: Used to capture individual and
collective knowledge and to extend knowledge base
• To capture tacit knowledge: Expert systems, case-
based reasoning, fuzzy logic
• Knowledge discovery: Neural networks and data
mining
• Generating solutions to complex problems: Genetic
algorithms
• Automating tasks: Intelligent agents
✓Artificial intelligence (AI) technology:
Computer-based systems that emulate human behavior
 Major Type of AI
• Expert system
• Machine learning
• Neural Network and deep learning
• natural language processing
• computer vision system
• robotics
• intelligent agent

Learning Organizations
Organizational learning means the process of improving
actions thorugh better knowledge and understanding
(Fiol and Lyles, 1985)
Popularised by Senge 1990 (The Fifth Discipline)
• Systems thinking
• Personal mastery
• Mental models
• Shared vision
• Team learning
 Garvin’s key points
Garvin notes that development of new ideas
(knowledge) is not sufficient – it must create change
or new ways of behaving.
• Systematic problem solving
• Experimentation with new approaches
• Learning from their own experience & past history
• Learning from the experience and best practice of
others
• Transferring knowledge quickly and efficiently
throughout the organisation