What Is Knowledge Management?

Definition, Process, Examples, Strategy, Best Practices,

and Trends
As companies struggle to maintain business continuity with employees working remotely,
knowledge management promises to help enterprises build a more collaborative organization.

Gagandeep Kaur
Last Updated: February 9, 2022
Knowledge management is defined as the process of creating, identifying, and managing
knowledge of an organization and structuring it for effective and efficient use among its
employees and teams. This article explains what knowledge management is today, its growing
relevance, strategy best practices, and trends.
What Is Knowledge Management (KM)?

Knowledge management is the process of creating, identifying, and managing knowledge of an

organization and structuring it for effective and efficient usage by employees and
teams. Organizational knowledge includes information, such as revenue expansion strategies,
recruitment best practices, winning bids to special employee skills in certain tasks, internal IT
disciplines, and legal team strategies, among others.

Knowledge management is emerging as the most significant technology of 2020. The global
knowledge management market is projected to touch $798.9 billion, with a compounded growth
of 20.4%, according to ResearchandMarkets.com. The international knowledge management
market is likely to expand at a CAGR of more than 22% from 2016 and 2025, says Zion Market
Research.

With the ever-increasing number of COVID-19 cases, and social distancing norms bringing a
paradigm shift in how businesses are conducted, it is crucial to leverage the data and
information assets present in the enterprise’s systems. This approach improves organizational
efficiency and builds a more collaborative organization.

Benefits of Effective Knowledge Management

1. Encourages collaboration

It enables collaboration and more effective exchange of ideas, leading to improved decision-
making. Better and faster decision-making helps in enhancing customer experience
and improving business prospects for the company. A more collaborative environment further
helps in promoting innovation in the organization. As per a study conducted by the College of
Business, Gachon University and College of Global Business, Korea University in January
2020, knowledge sharing was significantly and positively related to team trust and the
perception of collaborative technology moderated the relationship.

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Benefits of Effective Knowledge Management

1. Encourages collaboration

It enables collaboration and more effective exchange of ideas, leading to improved decision-
making. Better and faster decision-making helps in enhancing customer experience
and improving business prospects for the company. A more collaborative environment further
helps in promoting innovation in the organization. As per a study conducted by the College of
Business, Gachon University and College of Global Business, Korea University in January
2020, knowledge sharing was significantly and positively related to team trust and the
perception of collaborative technology moderated the relationship.

2. Allows faster decision-making

When relevant information is provided as and when required, it enables faster and more
informed decision-making. A 2017 study by ResearchGate concluded that knowledge
management practices significantly impact an organization’s ability to make speedy and
effective decisions.

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3. Avoids duplication of efforts

It helps firms to enhance operational efficiency and save time and effort. A crucial benefit of
knowledge management is the elimination of replication of efforts. For instance, let’s consider
that your customer support executive is finding it hard to help a customer who has raised a
query for a rarely-used feature.

In normal circumstances, the customer support executive will spend a considerable amount of
time finding the information and might even annoy or frustrate customers. However, with
knowledge management, the customer support executive can quickly locate any past instance

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of a similar query and use it to address the present inquiry. This way, it helps the organization
avoid making the same mistake again.
4. Leverages existing expertise

A well-defined knowledge management process enables the organization to effectively take

advantage of its team members’ existing skills and expertise. Let’s say a few colleagues are
experts in a new and developing complementary area. A formalized knowledge management
program will help other members leverage these members’ skills and expertise to build
competency in a new area.
5. Prepares for crisis

Organizations with a structured and formalized knowledge management program are better
prepared to face challenges as they benefit from the learnings of dealing with a crisis.
6 . Enables digital transformation

As organizations quicken the pace of digitalization, they have a plethora of structured and
unstructured data. A well-defined knowledge management program allows them to use this
information for their growth and benefit.

Process of knowledge management

Knowledge and expertise of employees and their learnings from organizational operations is a
crucial asset for the company. For instance, there may be a regional sales team that has tested
and implemented a key sales strategy in their local sales region, perhaps even in a local
language.

The knowledge management process should report this event and its related documents to the
regional company leadership, who can escalate it for company-wide testing and use.
The essential documents proving the case study need to be centrally stored and accessible
online to required employees and leaders.

However, companies cannot take complete advantage of this knowledge if it is not reported via
the set channels, and documented or made readily available to required teams and its
members. Many times, businesses suffer when a crucial team member quits or retires. An
employee amasses a lot of experience during their stint at a company. If the required knowledge
is not documented and managed, the continuity within teams and functions suffer when the
employee leaves. Having a knowledge management strategy can prevent this and protect the
company’s intellectual property.

Knowledge management is not just about deploying software or a digital tool to capture the
information or data in the company’s system. It involves a fundamental change in the
workforce’s mindset to foster a culture of sharing and collaboration across the organization. This
can be easily facilitated through set policies and guidelines. The success of a knowledge
management system depends on how the management ensures that employees and
particularly team leads, document, and share newly identified knowledge regularly.
1. Discovering knowledge

Knowledge can be discovered accidentally by team members or done with deliberation. An

example of accidental knowledge is discovering a critical step that greatly improves the
organization’s process, even if that was not the intention of the task. An example of intentional
knowledge discovery/creation could be an A/B testing project to find the best conversation

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optimization strategies for a company’s website.
2. Identifying knowledge

The next step is to identify the knowledge where the team needs to ensure two things. One, that
indeed this is unique knowledge previously undocumented in the organization. And two, it helps
the organization meet its ultimate objectives, even if it is in a small contribution.
3. Documenting knowledge

The next critical step will be to document the knowledge in its most accurate form. For example,
when documenting a successful sales strategy, every step and customer case study must be
documented
4. Flagging new knowledge

Flagging new knowledge requires team leaders to report new knowledge via the right chain of
command for the organization. Many companies also hold townhall and company-wide
meetings, where selected new knowledge discoveries are shared with the entire company with
due credits.

This also encourages new knowledge discovery by other employees. Once the functional head
or leadership or knowledge management team is made aware of the new discovery, the next
step involves reviewing it. Once its validity is approved, the knowledge will need to be stored,
organized, and shared with relevant teams.
5. Organizing and storing knowledge

Once knowledge is successfully discovered and approved, companies need to structure and
store this knowledge in an easily understandable format. It should be stored on a platform that is
readily accessible, yet secure. With the rise of work-from-home policies during the COVID-19
shutdown, more and more companies are opting for cloud storage for secured and remote
access to company files and documents.

A substantial part of an enterprise’s knowledge is unstructured, including company memos,

emails, research, and social media posts. The company must set the right storage standards for
each knowledge type to be structured and ready for access.

6. Sharing knowledge

Knowledge should be shared by authorized people in a set structured format. It should be

shared with the required teams based on who should and can use the knowledge to meet
organizational goals. Knowledge sharing is the crux of a knowledge management strategy.

All previous efforts prove fruitless if the knowledge is not effectively shared among all
stakeholders and not used when needed. In this step, businesses create a technology-enabled
platform to make learning accessible. It also involves training employees to use the knowledge
to make informed decisions.

7. Utilizing knowledge

The final and most crucial step is putting the acquired knowledge to good use. Any employee
looking for relevant information should be able to access the right information based on access
and security clearance and utilize the knowledge to make quick decisions.

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For example, a regional logistics manager is looking for a faster and more efficient way of doing
inventories. Instead of spending time on new trial and error from scratch, he could look up
successful tests conducted by other territory managers and emulate their method. It saves time
and facilitates a more efficient way of utilizing organizational resources.

5 Key Components of Knowledge Management

There are multiple cogs in the engine that make a knowledge management platform work. Let’s
look at five key components of knowledge management.

1. Strategy

A knowledge management strategy is a well-documented source of direction for the company.

Essentially, it is the blueprint of the goals of the organization in terms of identification, storage,
and sharing of existing and new knowledge, which include the business challenges that need to
be solved across departments.

The knowledge management strategy should focus on identifying and addressing a knowledge
gap in the organization. For instance, if an insurance firm identifies the general insurance
division as a growth area, the other departments should learn more from this division to realize
organizational goals.

2. Process

A clear and well-defined process for identifying, storing, and sharing knowledge is a vital
component of every successful knowledge management initiative. The process of knowledge
management includes various steps, such as creating knowledge, structuring it, reviewing and
sharing it before it can be used, and applied by other teams.

The processes you set up should be designed to ensure accuracy in identifying, managing,
sharing information, especially in a secure way. The purpose of knowledge management is
counter-intuitive if the wrong information is shared or if it is shared with the wrong person.

3. Technology

Technology is a crucial element behind the success of any knowledge management project.
The systems and software should also enable easy and secure access for authorized
employees to relevant information as and when required. Technology solutions bring together
all the components — process, people, and information — required to build an organization’s
knowledge management system.

Typically, dedicated knowledge management platforms utilize big data and document analysis
to provide business intelligence as well. These platforms are increasingly tapping into AI
enablers for more sophisticated and customizable analytics.

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4. People

People include top management, team leaders who motivate their members, the core
knowledge management team who guide the implementation, and finally, employees who

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contribute and use the system.

Knowledge management must be prioritized within the company. The top management needs to
lead by example and encourage and incentivize the sharing of information. Rewarding and
motivating people to regularly use the system to share their insights will go a long way in
ensuring the knowledge management program’s success.

5. Improvement

Knowledge management is not a one-time initiative. It is a dynamic exercise that has to become
a part of the company culture. It needs regular reviewing, tweaking, and improvement to meet
the goals defined in the strategy.

The company should regularly revisit its knowledge management strategy to see what is
working and what’s not. Further, knowledge management plans are intrinsically linked to the
organization’s goals and objectives. Sometimes the goals themselves change, thus making it
necessary to reevaluate the knowledge management policies and plans.

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Top 6 Knowledge Management Strategy Best Practices for 2021

Enterprises across business verticals need to maximize the harness of organizational

knowledge to gain an edge in today’s competitive global marketplace. So how can they leverage
it? The answer lies in building a robust knowledge management strategy. Here are some key
best practices to help you develop your knowledge management strategy.

1. Identify your goals

The purpose of the knowledge management initiative should be well-defined. For instance, you
may have an overall organizational goal to improve customer experience across all touchpoints.
This goal needs to be documented and related to functional, and team heads since customer
experience has several touchpoints and verticals.

Identifying the purpose will help you involve the right people and resources to acquire the
knowledge and meet the objective. You may even need to revise or update your goals. It is
crucial to get key members of your team involved in defining your knowledge management
initiative.

2. Create a knowledge sharing policy

Typically, organizations suffer when key employees, who had been working with them for a long
time, decide to leave. This is when the knowledge gathered by this employee is not
documented, leading to key lapses and potential losses for the business. A formal knowledge-
sharing policy is vital to ensure that information gathered stays in the company irrespective of
talent churn.

Furthermore, a knowledge management policy helps in capturing tacit knowledge in the

organization. Such a policy mandates employees to share their expertise and experience
gained while working in the company with their respective team leads for efficient use across
the organization.

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3. Share knowledge across the organization

A key benefit of knowledge sharing is gaining from the experience of other departments in the
organization. It is imperative to share knowledge across the board for maximum benefit. This
means not only sharing challenges and solutions with your team members, but also with
different departments of the company.

For instance, the sales team may face a problem similar to what the operations team has faced
in the past. If knowledge is shared, the sales team can learn from the operations team’s
mistakes or simply adopt the solution that worked for them. This way, the company stands to
save time, money, and resources rather than reinvent the wheel.

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4. Appoint a knowledge management implementation officer

A strategy is just half the battle won. The other half is making it work for the employees and the
company at large. As this would require a significant change in the organizational process and
possibly culture, you will need someone experienced to steer the boat.

Ideally, this person should understand the company and the objective of the knowledge
management initiative and guide its implementation. This also includes ensuring compliance
with each team. If an organization cannot afford to allocate or recruit a full-time employee, they
can utilize a shared HR personal or administrator.

5. Lead by example to bring a cultural shift

Rather than dictating employees to use the knowledge management system, it will work well if
the top management leads them by example. This means knowledge management should start
at the top of the hierarchical structure and then move towards the bottom to be truly effective.

Adopting a knowledge management strategy is a major cultural shift, and it will work best if
employees see the CXO suite actively do it and emulate them.

6. Incentivize employees

Many times, the knowledge management system doesn’t see traction because employees don’t
have much to gain. By withholding information, they also feel they are valuable and
indispensable to the company. It might help to motivate employees to participate in the
knowledge management strategy. They can be incentivized with rewards, recognition, benefits,
or bonuses.

The success of a knowledge management initiative depends on how well your workforce adopts
it. The benefits and gains of the initiative should be clearly communicated to employees at the
individual level. Once they understand the benefits, the chances of adoption, and success of the
knowledge management initiative increase manifold.

Top 5 Knowledge Management Trends in 2021

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As more and more businesses digitize their operations during COVID-19, they realize that
knowledge management can enhance their efficiency and productivity. More importantly,
knowledge management allows them to serve their customers better, even as traditional
business methods and practices are rendered ineffective. Here are the top five knowledge
management trends for 2021:

1. Acceptance of knowledge management as a crucial growth enabler

Enterprises no longer doubt the relevance of knowledge management as a critical success

factor. For several years organizations avoided focusing on knowledge management because it
was not perceived as essential for growth. The COVID-19 pandemic has made it crucial for
organizations to allow easy and access to relevant information to the remote workforce, and
this, in turn, has accelerated the development and a wider acceptance of knowledge
management as a growth enabler.

2. Adoption of knowledge management to pave the way for AI

A growing number of organizations are realizing that knowledge management is a great way to
pave the way to eventually leverage artificial intelligence. The upcoming AI technology promises
to play a crucial role in the curation, accessibility, and distribution of knowledge.
Having a well-defined knowledge management strategy allows organizations to capture
knowledge, both structured and unstructured, making it easier to automate processes for
business gains. AI allows organizations to not only tag and organize information but also to
generate contextual metadata. This makes it easier for people to access and leverage and use
available data.

3. Technology to drive knowledge management adoption

Today’s technological advancements support the evolution of knowledge management from a

small initiative to a forceful contributor to the organizations’ growth. Tech solutions make it
easier and more effective for organizations to capture the data.

The other aspect is that an increasing number of organizations are digitizing their operations
and, in the process, capturing a mammoth amount of data. In this context, they need knowledge
management to process the available data effectively.

4. A better understanding of knowledge management benefits

Knowledge and information provide incredible power and insights to the organizations to make
informed decisions and serve their customers better. There is a growing understanding among
the enterprises that they need to systematically consolidate their information and data assets to
be in a position to gain insights and leverage their knowledge.

5. Gig economy to accelerate knowledge management

The workforce is increasingly moving towards the gig economy, with people taking up several
jobs simultaneously. There is a growing need for organizations to provide their workforce with
the necessary knowledge resources to complete tasks successfully. Generally, gig economy
workers are not part of the organizations’ employee infrastructure, so they don’t usually have
access to the company knowledge assets. This, along with the growing base of remote workers,
will push the firms to adopt a formal knowledge management program.

In Closing

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 Knowledge management has become critical for organizations from industries of all sizes. The
benefits are there for all to see. Most successful businesses already have a robust model in
place, and it is your turn to follow in their footsteps. A knowledge management platform takes
years to perfect. So the time to commence your journey is now.

As knowledge management systems mature, we will see knowledge management platforms

evolve to become more dynamic, secure, and customizable. Knowledge management software
and solutions can empower your organization to improve productivity and operational efficiency.
More importantly, they help in providing a better customer experience leading to reduced churn.

By enabling your workforce to access the right information at the right time, knowledge
management allows them to make well-informed decisions. Adopting best practices and being
aware of trends maximizes the returns of a knowledge management initiative.