Conducted by: Thornton & Johnson LLP

1. T J Avaya PSO Knowledge Management Review Conducted by:Thornton & Johnson LLP Acknowledging your past… looking toward your future.

2. T J Goals of the Project • Glimpse at the future of the VOIP industry • Provide overview of Avaya and PSO’s KM system • Perform knowledge and strategic gap analysis • Analyze results - what is needed to be known – how can it help • Deliver recommendations for moving forward

3. T J The Voice Over IP (VOIP)Industry • Market size 2003 • $1.2 Billion • Market size 2007 (projected) • $8.4 Billion <Source: Business 2.0, November 2003>

4. T J AVAYA is…. A global provider of communication networks, applications and services. Avaya Inc. designs, builds and manages communications networks for more than one million businesses worldwide, including more than 90 percent of the FORTUNE 500®. Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol (IP) telephony software applications, systems and services.

5. T J AVAYA is also……. • We are in leadership positions in the following markets: • No. 1 in North American Enterprise Telephony.1 • No. 1 worldwide2 and in the U.S.3 in IP Telephony. • No. 1 worldwide in Voice Messaging,4 Unified Communication5 and Unified Messaging.6 • No. 1 in Call Centers in North America,7 Western Europe1 and Asia Pacific.7 • No. 1 in the U.S. in PBX maintenance services.3 • We have approximately 500,000 service maintenance contracts worldwide. • Every day, people use 100 million of our voice mailboxes. • We employ more than 18,000 people, including some 2,500 research and development professionals worldwide. • We have about 2,500 authorized or certified Partners. Sources:1 Gartner Inc.; 2 Synergy Research Group; 3 InfoTech; 4 In-Stat/MDR; 5 The Pelorus Group; 6 Radicati; 7 Frost & Sullivan;

6. T J Mission and Vision • “Our mission is to provide the world’s best communications solutions that enable businesses to excel” • Vision Innovation. We embrace change, for ourselves and for our customers and partners. • We foster creativity, innovation and risk-taking that will enhance shareholder value and improve our customers' businesses and our own. • We use technology as a strategic tool.

7. T J InfoX - Rover • “KM should leverage what is already there” • 1st generation KM system • Store, retrieve, modify documents • Publish Knowledge bases articles • Store • Project data • Product information • Knowledge capital • Solution data

9. T J InfoX - Rover • Forums • Reviewing and modification abilities • Web base GUI – Intranet • Security using login Ids and passwords • Onsite and offsite access – employees only • Content categorization • Simple combination system – explicit to explicit

10. T J PSO’s KM Team Makeup • Operations • Program Development • Project Management • Talent Pool

11. T J Gap analysis What your firm must do What your firm must know • Become more flexible – adapt quickly • KM is more than a disparate database system • Nurture and solidify partnerships – increase switching costs Strategy Knowledge Link • • KM strategy should reflect business competitive strategy • Monitor external environment and competition • Capitalize on internal operations possibilities • Culture affects a KM system • Marketing and communication • Give clients the best customer service, quickly • Support from all players is crucial • Capitalize on untapped resources (people) • ROI doesn’t have to be $$$ Strategy Gap Knowledge Gap • Design, build and integrate • Technology communications networks Knowledge Strategy Link • Integration • Diverse staff – many backgrounds • Reusable information is a competitive • Guiding principles (mission & innovation advantage – increasing returns vision – strong but not used in the mix?) • Communication techniques • Adapt • In the business of providing services • Worldwide base of knowledge What your firm knows What your firm can do

12. T J What your firm must know • KM is more than a disparate database system • KM strategy should reflect business competitive strategy • Culture affects a KM system • Marketing and communication • Support from all players is crucial • ROI doesn’t have to be $$$

13. T J KM is more than a disparate database system “Data is information. Knowledge or know-how, has to do with the process of learning, understanding, and applying information”

14. T J Codification or Personalization? • Codification Strategy • IT centered • Collect, codify, store, distribute • Personalization Strategy • Knowledge stays personal • Transfer through direct contact • “computers are for communication” • “effective firms excelled by focusing on one of the strategies and using the other in a supporting role”

15. T J Focus on....Codification • Align personalization with codification • Users, users, users • Classification of data and information • Personalization as a supporting role • Yellow Pages • Social Space • Cubicles • Culture • Promotion

16. T J Where could they be • 2nd generation KM system • Foundation for innovation • Focus on creating and maintaining the conditions required for optimum production of new knowledge • Cultural acceptance • Support structure • Increased personalization, involvement and interaction - communication

17. T J Integration • eProject – Rover (InfoX) – Forums - Biographies • Information and data sources need to be aligned and integrated • Tie forum conversations to database topics • Tie articles to cases and individuals • One click access • Allow outside partners access to knowledge base • and the ability to contribute

18. T J CoP • Free to Be – DIY • Connections support infrastructure • Could be implemented along unit lines • Operations • Program management • Project Management • Talent Pool

19. T J CoP Planning • Create a business case • Identify a leader – community coordinator • Define the scope of the community • Design core activities • Recruit • Define roles

20. T J Knowledge Map/Yellow pages • Utilize skills survey results from eProject database • Along with new material • List employee qualifications • Experience • Network affiliations • Project experience • Key discoveries and actions • Electronic and physical versions • Links from articles and submissions to biographies

21. T J KM strategy should reflect business competitive strategy “Strategy itself is a knowledge-processing outcome”

22. T J KM and Business Strategy Alignment • PSO KM Team needs to review its purpose, goals and objectives as they relate to Avaya's overall mission and vision • KM strategy should include • Ability to integrate • Ability to satisfy communication needs • Ability to overcome and adapt • Formulate PSO KM project mission and vision

23. T J KM Team / Steering Committee • Review make-up of current group • Need mix of business knowledge • Various levels of technical competence • Mixture of social competence • Cross-functional team • Marketing, communications, finance, PSO, HR

24. T J AVAYA PSO KM Initiative Needs: • Defined value proposition that can be marketed • Key success factors • Users, input, # of projects that utilized system • CoPs • Specific incremental objectives for system • KM vision

25. T J Culture affects a KM system “The greatest difficulty lies not in persuading people to accept new ideas but in persuading them to abandon old ones”

26. T J Culture? • Cultural assessment • People interaction – codes of ethics – office layout – mission/visions – the “feel” • Understand the companies history • Apply cultural strengths to help with change • Align KM with cultural strengths

27. T J Aligning KM and Culture • Classify/document culture • Showcase the way KM will make people more successful • Capitalize on individuals in your network • Peers, role models, leaders • CoPs • Align rewards and recognition with the KM system • Performances reviews that acknowledge new behaviors • Milestone rewards – public recognition • Producers and recipients recognition

28. T J Direct Culture Change • Communicate the need for change • Get partners and customers involved • Basic change mgt. principle – involve users • Recruit change management personnel • Find what needs fixing and why • Search out potential solutions - research • competition • Give people the training needed • New skills, behaviors, attitudes

29. T J Marketing and Communication “A KM strategy should always seek to enhance the performance of knowledge processing in human social systems”

30. T J PSO’s KM Team Makeup • Operations • Program Development • Project Management • Talent Pool • Communications • Marketing

31. T J Communications Plan • Recruit someone from communications • KM team member • Press Kit • Physical and electronic • Mission, vision • Stories • Video - webinar

32. T J Marketing Plan • Recruit someone from marketing • KM team member • User and producer rewards – fabulous prizes • Grassroots promotion • Posters, flyers, stories of success • Create heroes • Find them and promote there deeds • Face of the month

33. T J Marketing the KM Initiative • All KM oriented messages should include • Definition of KM • Strategies and action plan • Time and repetition are needed to succeed • Communication plan • Feedback loops • Mention KM at meetings - formal and informal • Turn it into daily speak • Training programs

34. T J Support From All Players is Crucial The problem with middle managers in knowledge management efforts is lack of a big-picture view”

35. T J Integrated Planning • KM Steering Committee = cross-functional team • Possible internal/external consultant • Utilize KM leaders from other Avaya divisions • Locate KM leader in another company • Utilized MBA programs (PLU, SU,UW) • Examine user data • Discover what and why features are not being used • Suggestion box – physical and electronic

36. T J Internal Involvement Example • Google style • Program that asks every engineer what they did every week – by email • Collects emails in a document • Sends out document to everyone and those who did not respond are at the top of the list • Gives company permanent record • Good for performance reviews - new hires can quickly get up to speed by reading documents

37. T J The Performance Evaluation • Connect KM project with employee evaluations • Input to system • Additions to material – updating • Monitoring duties • Forum input and participation • Require KM survey involvement for knowledge map

38. T J ROI Doesn’t Have To Be $$$ “Trying to reflect the value of intangibles using conventional reporting tools is to undermine the spirit and intent behind them.”

39. T J Measuring • The goal of measurement is to produce information in a context that allows for action • Measure just enough to get the information needed to take action • Use a multimedia approach when communicating measurements and results • Communications strategy

40. T J Measurements • Clear and measurable goals with an identifiable audience • Must have valid and reliable measurements • Consider a link to any existing measurement system Avaya has • Monitor and evaluate • Trial and error

41. T J Measurements of Performance • ROI • Barriers to sharing knowledge • Employee attitude • Surveys and suggestions • Intellectual capital and knowledge asset assessment • Balanced Scorecard • Knowledge Value Tree

42. T J Measurement examples • System use • Actual numbers • Article and case hits • Producers and recipients testaments • Time saved • Application of information/knowledge • Partners • Forum response monitoring • Business Intelligence initiative

43. Concluding Remarks “Best we can do is tinker with the factors (variables) we identify as plausible. We must recognize that this is still just a part of a larger system that has a life and trajectory of its own”

44. T J Keeping the Edge • “Change is the law of life. And those who look only to the past or present are certain to miss the future.” (JFK) • Promote change • From the top • Not to change is the process of dying • Applaud/reward those who instigate change • Learn from failures – don’t crucify • Market and communicate the change

45. T J Have a Clear Strategy……….. and Communicate it! • Strategy review meetings • KM team – invite outside input • Review core competencies of project • Are you seeing where this is going – where it can go? • KM vision and mission • Align with company’s business strategy • Talk it Up!! • Broadcast – email, flyers, forums, yellow pages • Employee handbook, orientation, evaluations

46. T J The 3-P DEC • Planning • Strategy • Research – inquiry – debate • Review best practices, lessons learned - Surveys and user feedback • Promotion • Marketing and Communications • Tools and techniques – get everyone involved • Steps for Progress • Need continual incremental improvements • Constant assessment – trial and error • Actionable pieces for growth • What can easily be implemented, is wanted, is cost effective

47. T J Value Chain Examination • Narrow view • Internal use by those in PSO • Broad view • Allow access (limited in some cases) to those above and below on the value chain – partners • Analyze value chain of suppliers and buyers • Partners • Align KM project with value chain analysis results • Look for ways to lock in, increase switching costs, create entry barriers and increase value proposition • This could be used with a culture examination also

48. T J Selected References • Davenport, T.H. and Prusak, L. (1998). “Working Knowledge”. Harvard Business School Press. • McElroy, M.W. (2003). “The New Knowledge Management”. Butterworth Heinemann. • Soo, C. et al. (2002). “Knowledge Management: Philosophy, Processes, and pitfalls” California Management Review. Vol.44 No.4 • Lang, C. (2003). “What are you Measuring”. Intelligent Enterprise. Sept 17. Vol 6 No.15. • Albers, J.A. (2003). “Framework for Implementing Knowledge Management”. Conference paper. • Rumizen, M. (2002). “The Complete Idiots Guide to Knowledge Management”. Alpha, CWL Publishing Enterprises.

49. T J Questions