CPE/CSC 580: Knowledge Management

1. CPE/CSC 580: Knowledge Management Dr. Franz J. Kurfess Computer Science Department Cal Poly

2. Introduction Knowledge Processing Knowledge Acquisition, Representation and Manipulation Knowledge Organization Classification, Categorization Ontologies, Taxonomies, Thesauri Knowledge Retrieval Information Retrieval Knowledge Navigation Knowledge Presentation Knowledge Visualization Knowledge Exchange Knowledge Capture, Transfer, and Distribution Usage of Knowledge Access Patterns, User Feedback Knowledge Management Techniques Topic Maps, Agents Knowledge Management Tools Knowledge Management in Organizations Course Overview

3. Motivation Objectives Evaluation Criteria Historical Perspective Ad Hoc KM Organized KM KM and Computers Current Trends and Tendencies Status of KM in Organizations Plans for KM in Organizations Knowledge Workers and Knowledge Organizations Industrial vs. Knowledge Age Mutual Benefits for Workers and Organizations Important Concepts and Terms Chapter Summary Overview KM in Organizations

4. Logistics • Introductions • Course Materials • textbook • handouts • Web page • CourseInfo/Blackboard System and Alternatives • Term Project • Lab and Homework Assignments • Exams • Grading

5. Motivation

6. Objectives

7. Evaluation Criteria • coordinated, organized effort • acquisition, collection, organization, storage, interpretation, evaluation, distribution, maintenance • persistent storage • method, format, medium • techniques • categorization, indexing • technology • manual: hand-written, drawings, artifacts • mechanical: typewriter, punch cards, photographs, duplication • computer: storage, retrieval, organization, evaluation

8. Pre-Historic • no written language • drawings, icons for storage purposes • spoken language • main method for collection, organization, distribution of knowledge • coordinated KM very difficult • very limited common representation scheme • very limited systematic collection, organization and distribution methods • mostly dependent on individual/small group effort

9. Antiquity • written language systems • persistent storage for documents • duplication and distribution of documents possible, but tedious • limited coordination efforts for KM • systematic collection and organization • record keeping, libraries • coordination mostly by governments • substantial overhead

10. Gutenberg • efficient duplication system • printing press allows mass-production of documents • greater distribution of knowledge • somewhat extended KM efforts • coordination by governments and other organizations • churches, local entities, land and property owners

11. Industrial Age • emergence of large-scale organizations • mass production of goods • administration of large constituencies • requires efficient knowledge management • administrative systems • coordination of resources, materials; distribution of products • internal information flow; record keeping • paper-based office • storage and distribution of documents • new technologies • typewriters, stencil duplicators, vertical files, telephones, photography [Black & Brunt 2000]

12. Effects on KM • systematic, planned knowledge and information management • complex, dedicated information systems • based on human labor and paper as storage medium • “manual” information technology • requires precise methods and processes • rational, planned system of • registration, filing, indexing • support for strategic planning • usage of gathered information • extraction of knowledge [Black & Brunt 2000]

13. Manual KM is Onerous • usually based on central repositories • every document received must be • numbered • recorded • categorized • filed • several indexes must be generated • usually dependent on the purpose • e.g. people, places, subjects • placeholders for temporarily removed documents • “transit cards” [Black & Brunt 2000]

14. Problems with Manual KM • organization methods • alphabetical or subject-based indexing • sloppy work • incorrect categorization • incomplete indices • uncontrolled vocabulary • spelling variations, • efficiency • delays in processing files • tracking of information • distributed across files [Black & Brunt 2000]

15. KM and the Yorkshire Ripper • information available • files of suspects • in the West Yorkshire police station (coordinators) • contains the file of the murderer • links between murderer and victims • a list of individuals who could have received in their wages a bank note found on one of the victims • the list contained the name of the murderer • utilization of information • no match was made between the files of suspects and the list of individuals • why? [Black & Brunt 2000]

16. Knowledge Management in Organizations • based on data collected by the Harris Research Centre in Spring 1998 on behalf of KPMG Management Consulting • sample covered 100 leading UK companies [KPMG 1998]

17. Relevance of Knowledge • for many organizations, what they know becomes more important than traditional sources of economic power • capital, land, facilities, labor • competitive advantage through knowledge-based competencies • technological know-how • product design skills • problem solving expertise • creativity • ability to innovate [KPMG 1998]

18. Risks of Knowledge Loss • knowledge of best practice in important areas of operation • damage to relationships with key clients or suppliers • loss of income [KPMG 1998]

19. Most Critical Knowledge Types • knowledge about customers • markets • products and services • competitors • skills of employees [KPMG 1998]

20. Impediments • people want to share knowledge but don’t have the time • wasted efforts through re-inventing the wheel • lack of rewards and incentives • relatively few people • are unwilling to share knowledge or best practice • think there is too much knowledge [KPMG 1998]

21. Driving Needs for KM • almost exclusively financial considerations • improving profits • defending market share against competitors • cost reduction • growing revenue [KPMG 1998]

22. Possible Benefits of KM • conventional (budget-focused) • better decision making • faster response time to key issues • improved productivity • reduced costs • increased profit • others • new business opportunities • better staff retention [KPMG 1998]

23. Technological Infrastructure • Internet access • intranets • document management systems • groupware • data warehousing, data mining • decision support systems • extranets [KPMG 1998]

24. Survey Background • Objective • Establish the extent to which companies regard knowledge management as important and pursue initiatives to implement and master it • Target group • Mid- to large-size companies from a variety of industries. The research was conducted among chief executives, business unit managers, product managers, marketing managers and R&D managers • Questionnaire • Data from 25 companies was processed [KPMG 1999]

25. Definitions for the Survey • Knowledge • the knowledge in the business about customers, products, processes, competitors and so on • Knowledge management • the discipline of capturing knowledge-based competencies, storing and disseminating them for the benefit of the organization. [KPMG 1999]

26. 16% 24% 28% 20% 12% Respondents’ Profile • Average size respondents +/- 35.000 people. • Representative sample of 25 mid- to large- size companies. Size responding organizations • 1-500 • 501-5.000 • 5.001-25.000 • 25.001-100.000 • >100.000 [KPMG 1999]

27. 18% 16 16 16 14 12 12 12 12 10 8 8 8 8 8 6 4 2 0 Bus/Fin Services Retail& Dist. IT Telecom Elec-tronics Chem. & Food Energy Other Engi-neering Respondents’ Profile • Respondents were from various industries. [KPMG 1999]

28. Respondents’ Profile Companies perceived their KM position as: • Leading • Intermediate • Lagging behind [KPMG 1999]

29. Outsourcing Time to market / Responsiveness Flexibility Alliances/Networking Innovation Quality Costs/Productivity 10 20 30 40 50 60 70 80 90 100% 0 Major Issues • In line with the expected key changes and issues, more effective management of knowledge is required in the near future (84%). • Only 4% of respondents regard current level of managing knowledge appropriate. [KPMG 1999]

30. 1 2 3 4 Still a Long Way to Go... Slightly True Slightly False True False Information transformed into knowledge New ideas are stimulated Knowledge-creation is structured process Knowledge is available at right places Mistakes used as learning experience Improvement o.b.o. experiences and best practices Knowledge is re-used(not re-inventing the wheel) People's competencies are mapped No overflow of information Sufficient time to share knowledge Willingness to share knowledge • Most companies acknowledge that managing knowledge can be improved for a wide range of aspects. [KPMG 1999]

31. IT infrastructure and software used to collect, share and analyze information Internet Intranet Extranet Database/DocumentManagement System Groupware Workflow software ERP Expert/Decisionsupport software 0 10 20 30 40 50 60 70 80 90 100% IT Infrastructure & Software • Internet, intranet, databases and groupware are used by more than 50% of the respondents • workflow software is rarely used [KPMG 1999]

32. 32% 36% 32% KM Initiatives • Neither in place,nor preparing • Preparing/Investigating • In place [KPMG 1999]

33. To execute a strategic direction To improve market performance To improve potential forinnovation To improve staff attitude/morale/competencies To improve communication and decision-making Other 0 10 20 30 40 50 60 70 80% Reasons for KM Initiatives • Other key motives touch upon innovation potential, market performance or a strategic direction. [KPMG 1999]

34. Initiative embedded inbusiness plan Knowledge management strategy with objectives Budget allocated Information needs, flows and owners are clear • Yes • No • Don’tknow Processes defined for info gathering/maintenance Formats defined for meaningful presentation of data Workflow linked to knowledge database Special people appointed to manage knowledge Incentives changed to stimulate knowledge Processes/jobs affected by the initiative 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1 Coverage of KM Initiatives • Initiatives often lack direction (44%), • Unclear understanding of info needs, flows, owners (50%), • No use of stimulating incentive schemes (56%) and • No link between workflow and databases (69%) [KPMG 1999]

35. Lack of understanding of KM and its potential benefits KM is no top priority Lack of commitment senior management Lack of funds Current culture does not encourage knowledge sharing Too little time to share information Lack of true teamwork Emphasis on short term results Hierarchical organizational structure Lack of KM techniques/tools Lack of IT support 0 10 20 30 40 50 60 70 80 90 100 % Bottlenecks for KM Implementation • Major road blocks are a lack of understanding, interest, patience for results and time for sharing information. [KPMG 1999]

36. No commitment or not a priority Short-term focus Insufficient understanding of KM Overtaxed organization/no time Unfavorable Conditions for KM If this is your company ... … then don’t start a KM initiative [KPMG 1999]

37. KM is Like Building a House... • The fundament of KM represents a set of Behavioral/Structural Conditions • The walls of KM represent a set of Operational Conditions • The roof of KM represents the corporate knowledge by which learning, innovation, speed and productivity will be enhanced [KPMG 1999]

38. Open, sharing culture Non-sharing culture Rewards and Incentives HOW? Performance metrics Science workshops Technology exchange networks Extra budget COMMITMENT TEAMWORK KNOWLEDGE SHARING ORGANISATION STRUCTURE & PROCESSES [KPMG 1999]

39. Integrated Systems Integrated Information System HOW? Database technology Groupware Web technology User-interface technology Intranet Upgrading Of Existing Knowledge Enabling Technologies Information Research Process Generation Of New Ideas Separate information systems [KPMG 1999]

40. not in place advanced realized starting 1 2 3 4 • Preparing initiative • Initiative in place KM Behavioral and Structural Components • On the behavioral/structural axis, there is still enough improvement potential. No understanding of KM Top management commitment Focus on group success 1,9 Open & sharing culture Focus onindividual success 2,0 2,1 Power culture 2,3 Process-orientedorganization Hierarchical organization [KPMG 1999]

41. not in place advanced realized starting 1 2 3 4 • Preparing initiative • Initiative in place KM Operational Components Integrated databases linked with workflow Professional research methods • A quick fix is not possible for the implementation of KM. • Step by step, the KM performance should be improved. Structured, strategic knowledge creation Knowledge supporting decision- making 2,1 2,1 Knowledge stored mentally and physically Ad-hoc data collection 1,9 2,0 Ad-hoc knowledge creation Non-customizeddata [KPMG 1999]

42. Overall satisfying results? Improved market performance Increased potential for innovation 37% Improved staff morale/attitude 50% • Yes • No • Don't know Enhanced communication & decision making 13% 0 10 20 30 40 50 60 70 80% Perceived benefits (*) KM initiative in place Reason to launch initiative Mixed Feelings about KM Benefits • Too early or difficult for 50% to judge whether overall results are satisfying. • Improved communication & decision making is not (yet) proven. • Improved staff morale/commitment is a welcomed spin-off. [KPMG 1999]

43. Knowledge-Intensive Organizations • tacit knowledge is one of the critical assets • since tacit knowledge is difficult to capture, people become very important assets • such organizations are vulnerable because people are mobile • core activities are difficult or impossible to automate • rely on problem solving, experience, communication, creativity, innovation, intuition, … • success is not only based on financial criteria • but what are the other criteria? [Haak & Deprez 1999]

44. Industrial Organization bottom-heavy asset rich, brain poor pyramid shape rigid structure assignment of workers to departments depends critically on middle management levels changes through verdict straightforward valuation three production factors: labor, raw materials, capital well-known valuation methods Knowledge Organization top-heavy brain rich, asset poor network of projects, workers flexible structure assignment of workers to projects little management overhead changes through organizational learning valuation is difficult measurement of knowledge-based assets requires new valuation methods Industrial vs. Knowledge Organizations [Haak & Deprez 1999]

45. Industrial vs. Knowledge Companies [Haak & Deprez 1999]

46. Knowledge Worker vs. Knowledge Organization • social issues and changes in the work environment • replacement of workers through computers? • adaptation of tasks and responsibilities to the use of • centralized knowledge repositories • automated work flow • demand-driven work scheduling • release from tedious “data processing” tasks • “empowerment” of knowledge workers • assignment of responsibility and authorization to workers instead of managers • availability of critical knowledge to workers [Haak & Deprez 1999]

47. Work Life in the Industrial Age • jobs “for life” • rigid structures within most organizations • slow evolution of skills, technology • little need for individual career planning • employees may possess critical skills and knowledge [Haak & Deprez 1999]

48. Work Life in the Knowledge Age • multiple jobs or careers over a life span • flexible structures within and across organizations • e.g. project teams, virtual organizations • more opportunities, but less stability • individual career planning becomes much more important • organizations try to incorporate tacit knowledge into organizational memories • employees must utilize experience, creativity, problem-solving and inter-personal skills [Haak & Deprez 1999]

49. Individual independent person “free agent” open to pursue other opportunities ownership of knowledge assets experience technical skills emphasis on individual career goals professional, personal, social Organization controllable asset follows directives replaceable by other employees ownership of knowledge assets proprietary information, knowledge and skills emphasis on corporate goals financial, political, social Matching Individual and Organizational Needs [Haak & Deprez 1999]

50. Individual Balanced Scorecard • approach introduced at KPMG in 1995 • the objective is to balance the needs of employees with those of the organization • explicit process to coordinate business development plans with personal development plans of employees • relies on specific categories • may depend on the context of the organization • forms the basis for an agreement between employee and organization • specific goals and targets that are beneficial for the employee and the organization [Haak & Deprez 1999]