Developing a Knowledge -Creating Organization

1. Developing a Knowledge -Creating Organization A Case Study in Process KM World Santa Clara, CA September 14, 2000

2. Melinda J. Bickerstaff Director eWorkforce Solutions Group mbickerstaff@kpmg.com

3. Renee A. Massoud Director KPMG Research Strategies rmassoud@kpmg.com

4. Objectives • After completing this session, you will be able to: • Actually be able to explain Knowledge Management to someone else • Link Knowledge Management to your business strategy • Explain the different value-based approaches to Knowledge Management • Identify and prepare a value proposition for your organization

5. Objectives • After completing this session, you will be able to: • Identify the key enablers to Knowledge Management and understand how they contribute to your success • Know the story behind KPMG’s journey into Knowledge Management • Learn how you can get started with your own Knowledge Management initiatives

6. Agenda What is Knowledge Management? What are the Value-Based Approaches to Knowledge Management? What are the Key Enablers for Knowledge Management? What is the Story Behind KPMG’s involvement in Knowledge Management? How do I get started with Knowledge Management in My Own Organization?

7. Agenda What is Knowledge Management? What are the Value-Based Approaches to Knowledge Management? What are the Key Enablers for Knowledge Management? What is the Story Behind KPMG’s involvement in Knowledge Management? How do I get started with Knowledge Management in My Own Organization?

8. What is Knowledge Management? It is... A business model embracing knowledge as an organizational asset to drive sustainable business advantage. It is a management discipline that promotes an integrated approach to create, identify, evaluate, capture, enhance, share and apply an enterprise’s intellectual capital. Bottom Line: Getting the right information, to the right people at the right time Key Concepts and Business Drivers -13-

9. Why the Interest in Knowledge Management? • Relentless technology advancement • e-commerce linking with c-commerce • The value of ‘intangible assets’ are greater than ‘tangible assets’ • Business thrust is now “grow to success” not “expense to survival” Knowledge management is now a senior executive concern

10. Why the Interest in Knowledge Management? • New organizational dynamics • The virtual & networked company • The redefined employment contract • The competition for talent • Increased dispersion of expertise • Global customers, suppliers and partners • The worldwide web Knowledge management is now a senior executive concern

11. What’s Happening Out There: Knowledge Management Priorities PlannedCurrent Launching New Knowledge-Based Products or Services 16% 14% Establishing New Knowledge Roles 9% 15% Mapping Sources of Internal Expertise 20% 18% Creating Networks to Support Collaboration 15 % 24% Implementing Groupware to Support Collaboration 11% 33% Implementing Decision Support Tools 20% 33% Data Warehousing / Creating Knowledge Repositories 24% 33% Creating an Intranet 25% 47% The focus is on technology solutions...

12. What’s Happening Out There: Biggest Difficulties to Implementing KM Attracting & Retaining Talented People 9% Identifying the Right Team/Leader for Knowledge 15% Defining Standard Processes for Knowledge Work 24% Setting the Appropriate Scope for Knowledge Initiatives 24% Mapping the Organizations Existing Knowledge 28% Justifying the Use of Scare Resource for Knowledge Initiatives 34% Determining What Knowledge Should be Managed 40% Measuring the Value and Performance of Knowledge Assets 43% Changing People’s Behavior 56% …but the challenges are related to people and strategy.

13. Agenda What is Knowledge Management? What are the Value-Based Approaches to Knowledge Management? What are the Key Enablers for Knowledge Management? What is the Story Behind KPMG’s involvement in Knowledge Management? How do I get started with Knowledge Management in My Own Organization?

14. States the payoff to the organization • Is the driving force ( the “business driver”) that provides energy to manage knowledge systematically and fund KM initiatives • Focuses KM on the value chain • Is the basis for measuring results • Leads to senior leadership support A Value Proposition: What is a Value Proposition? A Value Proposition: Articulates the fundamental business reasons and expected benefits that drive the organization to pursue Knowledge Management

15. How Does Knowledge Management Create Value? Customer Intimacy Cultivating relationships to gain customer knowledge Delivering what specific stakeholders want Product/Service Leadership Operational Excellence Delivering solid products and services at the best price and with the least inconvenience Delivering the best products and services ---offerings that push performance boundaries VALUE • Employee Capability Leveraging human intellectual capital in service design and delivery

16. The Four Value Propositions are Built Around Entirely Different Operating Models • Employee Capability • People development, expertise enhancement, performance management • Empowerment on work teams • High skills at all levels • Rewarding demonstrated applications of individual and team expertise • Managing learning and development • Learning push • Resilience and growth mindset • Emphasize development • Operational Excellence • Product supply, basic service, demand management • Central authority, finite level of empowerment • High skills at the core of the organization • “Command and control”, standard operating procedures • Managing total quality • Process push • Conformance, "one size fits all" mindset • Emphasize efficiency and dependability • Product Leadership • Concept invention, product development, market exploitation • Ad hoc, organic, loosely knit, and ever-changing • High skills abound in loose-knit structures • Rewarding individuals' innovative capacity and new product success • Managing risk • Concept push • Experimentation and "out-of-the-box" mindset • Emphasize breakthroughs • Customer Intimacy • Solution development, results management, relationship management • Empowerment close to customer contact • High skills at boundary of the organization • Customer equity measures like life time value and share-of client • Managing outcomes • Relationship push • Flexibility and "have it your way" mindset • Emphasize complete solutions Core business processes Organization and structure Management systems Culture: mindsets and behavior

17. Linking Knowledge Management to Your Business Strategy Which business driver could your Knowledge Management activity be based on or linked to? Operational excellence Product leadership Customer intimacy Employee capability

18. Agenda What is Knowledge Management? What are the Value-Based Approaches to Knowledge Management? What are the Key Enablers for Knowledge Management? What is the Story Behind KPMG’s involvement in Knowledge Management? How do I get started with Knowledge Management in My Own Organization?

19. Leadership and Strategy Create Apply Identify Organizational Culture Measurement Adapt Share Knowledge Collect Organize Technology and Infrastructure Knowledge Management Model Knowledge Management Enablers Knowledge Management Process Knowledge management is a process supported or hindered by organizational factors.

20. Leadership and Strategy Create Apply Identify Organizational Culture Measurement Adapt Share Knowledge Collect Organize Technology and Infrastructure The Process and Enablers Leadership and Strategy Knowledge Management Enablers Knowledge Management Process

21. Leadership and Strategy Create Apply Identify Organizational Culture Measurement Adapt Share Knowledge Collect Organize Technology and Infrastructure The Process and Enablers Culture Knowledge Management Enablers Knowledge Management Process

22. Leadership and Strategy Create Apply Identify Organizational Culture Measurement Adapt Share Knowledge Collect Organize Technology and Infrastructure The Process and Enablers Knowledge Management Process Knowledge Management Enablers Technology and Infrastructure

23. Leadership and Strategy Create Apply Identify Organizational Culture Measurement Adapt Share Knowledge Collect Organize Technology and Infrastructure The Process and Enablers Measurement Knowledge Management Enablers Knowledge Management Process

24. Agenda What is Knowledge Management? What are the Value-Based Approaches to Knowledge Management? What are the Key Enablers for Knowledge Management? What is the Story Behind KPMG’s involvement in Knowledge Management? How do I get started with Knowledge Management in My Own Organization?

25. KPMG’s Knowledge Management Journey

26. What is Knowledge Management? • KM is: • Strategic • A long-term proposition • An environment that leverages assets • An embedded process • KM is not: • A tactical program • An end in itself • A single technique or technology • A mature science • An event It is hard to define, hard to do well

27. KM Leverages Skills People People contribute to knowledge bases Process Embedded in core processes Content Consistent with strategy Technology ‘Just-in-time’ delivery

28. KPMG is... “The global advisory firm whose aim is to turn knowledge into valuefor the benefit of its clients, its people and its communities”

29. KPMG is Facing Many Knowledge-Related Issues Ineffective Decision Making Loss of In-House Knowledge Information Overload Limited Sharing of Best Practices Lack of Creativity Lack of Customer Responsiveness . . . effective knowledge management is the key to success

30. Hundreds of Products 93,000 + staff 157 Countries 825 Cities The Old Approach

31. Enabling Knowledge Transfer and Sharing

32. What is KWorld? Messaging, collaboration and knowledge- sharing system that... • Becomes our universal business management tool integrating all other knowledge and information systems • Integrates client and team collaboration tools with global repositories of the firm’s intellectual capital • Becomes KPMG’s digital nervous system • Enables people and processes to get to content via technology

33. KPMG’s Global Knowledge Management Program Benefits • Supporting KPMG strategy • More enabled & quicker decision making • Increasing revenues & margins • Higher client value added through greater innovation & synergy • Quality of life - staff more effective • Leveraging of corporate expertise Scope • 100,000+ staff • Global knowledge sharing • 100+ countries • 23 industry groups • 19 products • Sponsorship & leadership • Multidisciplinary, global team • Stretch targets • Rapid realization in phases • Technical platform built & rolled out in 18 weeks

34. KWorld Brings Together Content Connectivity Context Community

35. KWorld Architecture & Process External Content Knowledge Manager Global Knowledge Exchange news feeds Quality assessment Value assessment Security Taxonomy assignment Channel assignment KWorld Aggregate, focus, direct, prioritize Content screen Research Rules,heuristics, guideline, process flow Industry, research, technical Filter, aggre-gate, sort Collaboration Internal and external commentary KPMGContent Data center Work products External broadcast KPMG.COM Insights, interpretation and analysis Practice specific

36. ‘Content in Context’Our Unique and Proprietary Differentiation 15 Segments 19 Products Regions Products & Segments Clients/Targets People Conferences KPMG Library Assurance Tax Consulting FAS

37. KWorld is becoming the digital nervous system of KPMG.

38. Content in Context Technology Process People The KWorld Program KWorld Knowledge Sharing KWorld Collaboration kpmg.com

39. The KWorld Change Model is Set to Drive Adoption First Formally incorporated into routine operations C O L L A B O R A T I O N Institutionalization Knowledge sharing driven by personal motivation and beliefs Internalization L O Y A L T Y Commitment Users recognize the advantages Recommend to Others Degree of Support Utilized long enough to prove its benefit Positive Perception Fully implemented and operational Repeated Use A D O P T I O N Users log on and use Kworld regularly as part of their work Installation Interest Awareness People understand the inherent changes brought by KWorld Time

40. Building the Knowledge-Sharing Organization Day-to-Day Impacts on KPMG Employees… • Single Portal for Workflow • Human Knowledge Connectivity • Definition and Reinforcement of Processes • Goal Setting and Performance Review Support

41. Agenda What is Knowledge Management? What are the Value-Based Approaches to Knowledge Management? What are the Key Enablers for Knowledge Management? What is the Story Behind KPMG’s involvement in Knowledge Management? How do I get started with Knowledge Management in My Own Organization?

42. KM Consulting Framework

43. The Knowledge Management Enterprise Involvement Questionnaire (EIQ) http:// www. kpmgeiq. com

45. Agenda What is Knowledge Management? What are the Value-Based Approaches to Knowledge Management? What are the Key Enablers for Knowledge Management? What is the Story Behind KPMG’s involvement in Knowledge Management? How do I get started with Knowledge Management in My Own Organization?

46. Closing Comments or Questions Thank You and Good Luck in Your Knowledge Journey