Knowledge Management

1. GROUP 5 Knowledge Management Dave Owens T.J. Vogt Chatchawan Wongwattanakit “OT” Yueping Wang

2. What is Knowledge Management? “Knowledge Management is a waste of money. Organizations spend billions of dollars in their efforts to cut a corner or two resulting in just a fraction of savings” Richard Sapio CEO, Mutual Capital Alliance (8)

3. Agenda Questions/ Discussion What is KM? Summary Key Concepts Knowledge Management KM in the Army Implementation & Maintenance Other KM Cases PwC, LRC KM in China

4. What is Knowledge Management? • Common Knowledge Management Definitions (just a few of the many) • Discipline within an organization that ensures that the intellectual capabilities of that organization are shared, maintained and institutionalized • The process of systematically and actively managing and leveraging the stores of knowledge in an organization • The way a company stores, organizes and accesses internal and external information. • Refers to an entire integrated system for accumulation, integration, manipulation, and access of data across multiple organizations (9),(10)

5. What is Knowledge Management? Knowledge Management is the explicit and systematic management of vital knowledge - and its associated processes of creation, organization, diffusion, use and exploitation. (9),(10)

6. Tacit This type of knowledge exists in people’s heads, not articulated or documented Knowledge Management Tacit Knowledge Explicit Knowledge Knowledge Information Data Knowledge Hierarchy • Explicit • This type of knowledge can be • Processed by information systems • Codified and recorded • Archived and protected

7. Knowledge assets have often become more important to companies than financial and physical assets and are often the only way for a company to distinguish itself from its competitor & gain competitive advantage Lost knowledge given the enormous of baby boomers that will be changing jobs or retiring in next few years cause productivity cost of an employee leaving 85% of their base salary due to their replacement’s mistakes, lost knowledge and lost skill( Beazley et al, 2002) Relate to the concept of knowledge half-life, from which it is found that knowledge reaches obsolescence, on average, in 500 days, but can be much quicker in some areas - Lost knowledge obviously has a cost, estimated that $115 billion sits idle in lost knowledge affiliated with production technologies - An astounding example of this is the loss of the original computer source code, written in the 1950’s, that spawned the Y2K software crisis, has cost businesses worldwide an estimated $1 trillion (Petch, 1998) KM Significance (25) 7

8. People and Systems People • Knowledge Teams - multi-disciplinary, cross-functional • Learning Organization - personal/team/org development • Corporate Initiatives – Chief Knowledge Officer Systems • Knowledge Data-bases - experts, best practice • Knowledge Centers - hubs of knowledge • Technology Infrastructure - Intranets, Domino Document Management (9),(12)

9. Two Key Thrusts Sharing existing knowledge “Knowing what you know” Knowledge for Innovation “Creating and Converting” (9)

10. Knowledge Cycle Innovation Cycle KM Cycle Collect Codify Identify Classify Embed Organize/ Store Product/ Process Knowledge Repository Create Share/ Disseminate Use/Exploit Diffuse Access

11. Seven Levers • Customer Knowledge - the most vital knowledge • Knowledge in Products - ‘smarts’ add value • Knowledge in People - but people ‘walk’ • Knowledge in Processes - know-how when needed • Organizational Memory - do we know what we know? • Knowledge in Relationships - richness and depth • Knowledge Assets - intellectual capital (9)

12. Implementing and Maintaining KM Maintaining KMS KM Why Implement KM? Strategy for Implementing Who’s Responsible? IT’s Role in Implementing 12

13. Why Implement KMS? IBM, Oracle, Cisco Measure intranet value at over $1 billion BT, UK telecommunications company Employee ideas have saved £100 million Sodexho’s SuperSleuth Cash reward for employees submitting sales leads Led to over $90 million in sales volume (20) 13

14. Smaller companies, who often claim that they can’t afford to undertake KM activities, are wrong on two counts! 1.Knowledge is just as important, if not more so, to a smaller company trying to compete in the rapidly changing global marketplace. Smaller companies must capture, assimilate, and capitalize on every advantage they can find, including KNOWLEDGE 2.Smaller firms have the advantages from Culture and Organizational structure in place that is much more conducive to implementing knowledge management effort such as type of environment, which is predicated more on social relationship, familiarity and trust between employees Common Misconceptions A little Knowledge that acts is worth more than much knowledge that is idle.(Kahlil Gibran) (25) 14

15. Who’s Responsible? Everyone: Managers/Supervisors Leaders as knowledge champions The Knowledgeable Not a problem of knowing, but of access End Users Feedback Psychological barriers (13), (14) 15

16. Role of IT in Implementation “The biggest contributor to this brilliant growth of the knowledge management system is information technology.” Lee et al. also say, “...there are negative perspectives about information technology.” According to a managing partner at a KM consultancy firm based in New York, “The biggest misconception that IT leaders make is that knowledge management is about technology...Usually people begin a KM project by focusing on the technology...But the key is people...” (15),(16) 16

17. Strategy for Implementing KMThe MeCTIP model (19) 17

18. Strategy for Implementing KM Macro-environment External Factors Globalization Technology E-companies (19) 18

19. Strategy for Implementing KM Organizational Climate Structure Formal Structures Cross-functional project groups Cross-discipline learning groups Informal Structures Grapevine/Underground Cliques Strategy/Goals Culture The difference between, “...what is formally agreed and what actually takes place.” (19) 19

20. Strategy for Implementing KM Technical Climate Infrastructure Response to change Resistance to change/Conflict Listen to negative feedback Conflict leads to improved ideas (13),(19) 20

21. Strategy for Implementing KM Technical System Standardization Compatibility Usability (13),(19) 21

22. Strategy for Implementing KM Informational Info fatigue Infofamine Infoglut According to Lee et al, “...users do not know how to utilize effectively the vast pool of information.” (16),(19) 22

23. Strategy for Implementing KM Personal Knowledge roles Motivation Learning networks (19) 23

24. Maintaining KM Systems Provide Adequate Access Intranets Classes Psychological Barriers Ook Lee study 103 questionnaires from Korean KMS users 93 respondents were reluctant to say that a knowledge management piece was not valid (17) 24

25. Maintaining KM Systems Use it or lose it Cook compares KMS to draining battery Share knowledge Knowledge is individual power, not group power Removing knowledge “constipation” Crowded closet (13) 25

26. Maintaining KM Systems (13) 26 • Incentives • Financial • Big Idea • Pub Money • Organizational Sociology • Know your audience • Be flexible • “No single recipe” for success

27. The Difference of Knowledge Management in US and CHINA 27

28. Cultural Factors Impacting knowledge Management Internationalization creates a need to know how peoples in different countries to apply knowledge management. People from the United States and China have a distinctive prevailing decision style that reflects differences in cultural values (4) 28

29. Why they express happiness differently 29

30. The difference of American and Chinese in personal character (2), (3) 30

31. The different ways in deal with gift Presents are usually opened in front of the giver Presents are usually opened in private 31

32. The difference of U.S. and CHINA in Knowledge management (5) 32

33. “guanxi” in China Social ties -- interaction frequency, degree of intimacy and trust It’s not what you know, it’s who you know. Business guanxi (personal relationships in Chinese market) Government guanxi (personal relationships with government officials in different levels and bureaus). (5) 33

34. Could we combine two styles of knowledge into an integral whole 34

35. In the international work group, people need to know how to combine different knowledge into an integral whole. To achieve this goal we should understand the knowledge creation process (5) 35

36. The knowledge creation process (1) 36

37. Knowledge Management in Practice 37

38. PwC: The PricewaterhouseCoopers Law Firm & Law Department Service Group The World’s largest professional service organization: Service and Help general counsel and law firm executive management solve complex business problems Measurably enhance their ability to build sustainable shareholder value Manage Risk Improve quality and performance by providing services based on quality and integrity PwC includes the member firms of PricewaterhouseCoopers International Ltd., PricewaterhouseCoopers (21) 38

39. Helping corporate law departments and their outside counsel reduce their research costs and efficiently manage their legal knowledge for nearly 25 years Remain the nation’s premier provider of outsourced legal research, KM, and compliance e-training services Culturally committed to operational excellence Customer intimacy and product/service innovation LRC: Legal Research Center (21),(22) 39

40. The Study • In 2003, Florida Legal Technology Institute Study • Reviewed the marriage between PwC and LRC, catalog the advantages of KM in PwC law firms and departments • KM Study with 348 legal professionals around the world (law departments and outside law firms) + = 40

41. PwC and LRC KM Study Results Announced • 70% of law firm respondents and 63% of Law Dept. respondents reported having KMS in place indicated that they use KMS either “frequently” or “all the time” • The survey indicated that their KM program either meets or exceeds their targeted ROI 85% of the law firms 78% of the law dept. • The Avg. budget to support KM initiative was reported at 4.7% of the total legal spend. • Quality, speed and cost containment are what a majority of legal professionals are seeking from their KM solution providers. • The most common standards to measure the value of KM programs are productivity enhancement and cost reduction. (21),(22)

42. Legal professionals are increasingly cognizant of the value of KMS that retrieve information from multiple sources and locations. 82% said they would be more efficient if their KM solution could access legal knowledge in multiple formats from multiple resources. The majority of legal professionals surveyed believe that research redundancy, the reduction of which is a key goal of KM, is caused by lack of communication inside the firm or law dept., and by the lack of incentives to motivate knowledge reuse and eliminate redundant research “With the ever – increasing volume and types of information available, KM is more critical than ever. This study provides compelling data on the value and important of KMS. KM is an essential ingredient for efficient and effective delivery and management of legal services.” (Jonathan Bellis) PwC and LRC KM Study Results Announced (cont.) (21),(24) 42

43. When Knowledge adds up to nothing Charles Lucier, Chief Knowledge Officer at International management and technology consulting firm said up to 84% of all KM programs fail. • A global bank spanning 70 countries abandoned their KMS before it was ever rolled out. • A European manufacturing company successfully implemented a KMS, but it was rarely used. • A pharmaceutical company implemented a KMS that could not be easily adapted to specific context of each work group (21), (26)

44. Why Knowledge Can add up to nothing -- • Many companies find that their departments have different takes on what the project means or what it is trying to achieve • Many KM program leaders are ignorant when it comes to the “complexity of these micro-political processes” • Even though some firms are implementing KM programs with support from senior management, it can still fail as a result of lack of support • Some organizations do not achieve adequate ROI from KM as they are failing to measure effectively • Many companies professed to suffer from “information overload” and a shortage of time with which to both share and utilize knowledge • Many firms rely too heavily on consultants who position themselves in highly influential positions within the organization • Many initiatives fails as they only enjoy superficial support from the top management (21)

45. Evidence shows that, despite the potential pitfalls and seemingly high failure rate, companies are still willing to invest in KM. Why? Because there are big benefits there for taking. The results of several surveys met: 87% of European business directors believe they could enhance their company’s competitiveness with improved KM and 76% believe Building + Sharing Knowledge is important for their company. Study of 500 firms conducted by KPMG illustrated 80% of senior executives feel that KM is strategic to their organization and 78% feel they have missed business opportunities. Hoffmann-Roche, the Swiss pharmaceutical firm, has estimated that it saves over $1 million per day due to its KM activities BP Amoco attributed $260 million in bottom-line savings to a KM program Knowledge Management Success (23) 45

46. Energy firm Schlumberger Ltd. reported an estimated 668% ROI on a $72 million investment in KM over a period of six years Chevron Corporation estimates that it saved an initial $150 million, plus at least another $20 million annually by instituting a best practices program Teltech Communications, a firm that specializes in aiding companies to implement knowledge management programs, reports that its clients enjoy an average ROI of 12:1 for their efforts In a survey carried out by Information Week , IT executives said they considered KM a strategic initiative of high importance, and KM spend is to climb at 62% of the IT institutions surveyed Hewlett-Packard’s knowledge efforts aimed at customer service have reduced average call times by two-thirds and the cost per call has fallen by 50 percent Knowledge Management Success (Cont.) (21),(23),(25) 46

47. Keys to successful KM As is the case with many new practices in workplace: • Getting employees on board from day one and making sure they realize exactly how KM program is to impact on their routines and bring benefits for the organization as a whole is pivotal • Make sure KM becomes a fundamental aspect of the way you do business • Be sure your KM implementation is less about reporting and more about sharing knowledge “Knowledge is a company asset, hidden, until the knowledge worker releases it. The key to generating the best returns from your KM Program is to implement a well-planned methodology and ensure that your organization facilitates this release of information.” -Mike Bagshaw, Development Director at Trans4mation Training Ltd, (24)

48. Army Knowledge Management 48

49. 49

50. Army Knowledge Management “It is the Army’s goal to deliver critical capabilities to the warfighter, and oversee the development of a knowledge-based workforce” LTC William Nelson Deputy Director GA & CKO (Governance, Acquisition and Chief Knowledge Office) Army Office of CIO/G-6 (7) 50