Unit 11 Knowledge Management

(KM)

Objectives
After reading this unit, you should be able to:
•• explain the concept of Knowledge Management (KM);
•• acquaint yourself with the sources and types of knowledge;
•• provide a framework for developing KM systems; and
•• discuss the benefits and challenges of implementing KM.
Structure
11.1 Introduction
11.2 Knowledge and Knowledge Management
11.3 Sources of Knowledge
11.4 Knowledge Creation
11.5 Knowledge Management Framework
11.6 Benefits of Knowledge Management
11.7 Pioneers in Knowledge Management
11.8 KM Initiatives in Indian Organizations
11.9 Software for Knowledge Management
11.10 Trends and Challenges in Knowledge Management
11.11 Summary
11.12 Key Words
11.13 Self-Assessment Questions
11.14 References/Further Readings

11.1 Introduction
Present day’s organizations, large or small, gather vast amount of knowledge
during the course of their regular operations. This knowledge remains in
the ‘minds’ of organizational members conducting the operations- be it
research, design, development, manufacturing, or services. This wealth
of organizational knowledge (generally referred to as knowledge assets,
knowledge capital, intellectual capital, etc.) disappears, when these persons
leave the organization. The effects of losing organizational knowledge
is especially noticeable and can have far reaching implications when
people occupying important positions such as Chief of Designs or Chief
of Marketing leave since all the knowledge they gathered over long years
of experience is lost permanently to the organization, along with them. A
significant amount of time must be invested in relearning and reinventing
the work processes. Most organizations do have some manual system of
compiling knowledge to create a corporate memory but they have not been
effective mainly due to difficulties in careful organization and accessing of
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Strategic Enablers the compiled knowledge. Computers have not played a significant role in
this area, till recently, having mainly concentrated in the data processing
field: obviously due to the faster pay back period for the money invested.
However, things are changing and this field is receiving due attention from
developers and organizations.

11.2 Knowledge and Knowledge

Management
According to Peter F. Drucker in The New Realities, “Knowledge is
information that changes something or somebody - either by becoming
grounds for actions, or by making an individual (or an institution) capable of
different or more effective action”. Knowledge is viewed as a collection of
facts, ideas, leanings and policies, practices and a lot more. Knowledge can
also be defined more narrowly as agreed- upon explicit or formal facts, rules,
policies and procedures, whereas skills are seen as information processing
competencies that can generate explicit knowledge. Skills are learned by
doing; knowledge is learned by studying or investigating. Knowledge
can be classified as “tacit” knowledge that is personal (i.e. knowledge that
cannot be expressed and communicated) and “explicit” knowledge that can
be codified and expressed in a human or formal language.
Although the terms “information” and “knowledge” are often used
interchangeably, there is a clear distinction between information and
knowledge. Information is a flow of messages, while knowledge is created by
that very flow of information and is anchored in the beliefs and commitment
of its holder. Traditional management models focus on how to control the
information flow and information processing within the organization. This
view, however, fails to capture the essence of organization as knowledge-
creating entity. What “knowledge management” should achieve is not a
static management of information or existing knowledge, but a dynamic
management of the process of creating knowledge out of knowledge. Hence
one can argue that organizational knowledge creation is a continuous self-
transcending process, which requires a new kind of management that goes
beyond the traditional models of “management”.
Knowledge management is such a preposterous, pretentious and profoundly
confusing phrase that many of those who really understand KM—including
some of the field’s pioneers-refuse to use the term. If there is anything that
those experts do agree on, it is that knowledge management is not about
managing people in any traditional sense. Nor is knowledge management
really about managing knowledge. They prefer terms such as knowledge
sharing, information systems, organizational learning, intellectual asset
management, performance enhancement, etc.
Knowledge management refers to strategies and structures for maximizing
the return on intellectual and information resources. Because intellectual
capital resides both in tacit form (human education, experience and expertise)
and explicit form (documents and data). KM depends on both cultural and
technological processes of creation, collection, sharing, recombination
and reuse. The goal is to create new value by improving the efficiency

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and effectiveness of individual and collaborative knowledge work while Knowledge Management (KM)
increasing innovation and sharpening decision-making.
KM is the collection of processes that govern the creation, dissemination
and utilization of knowledge. In one form or another, knowledge
management has been around for a very long time. Practitioners have
included philosophers, priests, teachers, politicians, scribes, librarians, etc.
The importance of knowledge as a key source of competitive advantage is
now well established in management studies. Knowledge is undoubtedly
an indispensable resource to create value for the next generation of society,
industries, and companies. Yet, despite all the discussions and attentions
in both the academic and business worlds, very few have articulated how
organizations actually create and manage knowledge. Many companies
still seem to remain locked in the phase of building efficient and effective
information technology (IT) systems when they try to “manage knowledge”.
Ultimately, knowledge management is really just a way of looking at the
world of business. It’s a realization that who and what are assets of the
organization. And just like building, operating and managing physical
assets, knowledge assets need to be managed for the greatest possible return
on investment.
Knowledge Management (KM) is a management technique to effectively
manage knowledge in organization. It comprises of:
•• Construction (compilation/collection /collation) of knowledge
generated within the organization (and from external sources) into a
Knowledge Repository (KR).
•• Organize the knowledge so constructed in the organization in such a
way that it is easily accessible to all those in the organization, who
need it, on time.
•• A management system that maintains the KR up-to-date and relevant.
•• A set of tools, including computer systems that facilitates ease of
accessing the KR as well as building and maintaining it.
A Few Facts of Knowledge Management
KM is not Useless
The entire idea sits on the fact that it’s a long-term strategy to maintain the
existing knowledge of the person/organization and also to harvest the “new”
knowledge, which a person acquires during his process of learning. Debating
what knowledge management “is not” is pointless. People intuitively know
whether they are managing their own knowledge well and whether their
organization helps them to work without stress and inefficiency.
People and Technology
People should not have to choose between knowing a little about a lot or
about a little. They should be able to concentrate most on what they need
to know most and, when needed, find out a lot about related things. This
requires a browseable knowledge environment designed the way people
think. People want to solve problems, think, and collaborate. They do not
want to “use technology”. Technology is a means, not an end. Technology
must serve people, not the other way around. Technology creates knowledge
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Strategic Enablers management problems faster than it creates knowledge management
solutions. If knowledge management were intuitive, organization would
have perfected it by now.
Financial Factor
The cost of not managing knowledge greatly exceeds the cost of managing
important knowledge. Organizations have the habit of externalizing the
cost of not managing the knowledge to their customers.
Future Trends
Those who want to think and act in integrated, creative ways and solve
complex problems need rich, integrated, up-to-date knowledge management
environments to support them. The gulf between traditional and knowledge-
driven organizations is growing as knowledge-driven organizations
concentrate not only on present success but their own evolution so they can
better take advantage of the new knowledge-intense environment.
The Paradoxical Image
Call it the knowledge management paradox: those who are so busy “putting
out fires” that they have no time to tackle knowledge management are those
who most need to manage their knowledge better. While many CEOs put
KM as the top priority, few companies are still at a stage of implementation:
It’s the mind shift of the organizational heads to add knowledge to the
balance sheet. What we know now is that, those companies that crack
strategic knowledge management will be those most likely to succeed in
the new economy. The new economy is always termed as the knowledge
economy. Hence a company with higher knowledge quotient makes it big!

11.3 Sources of Knowledge

The two sources of Knowledge are:
Internal sources emerging from the operations of the organization- internal
sources include the organizational operations such as design, development,
engineering, sales, marketing, manufacturing, customer contact, etc. This
is the basic source of organizational information, which is controllable and
can be easily canalized to KR. In the absence of any formal mechanism,
this knowledge remains in the minds of organization members and usually,
disappears with them.
External sources such as Industry/Professional Associations, Commercial
web sites, etc. - there are many professional bodies such as IEEE, academic
bodies such as universities, research institutions, industry associations
such as NEMA, and commercial organizations. These sources usually
make the knowledge available through web sites and some times through
publications. Some of them could be free services and some could be for
a fee. A well-designed KM should be able to take advantage of both the
sources to create and maintain a KR and allow members to easily access the
knowledge stored inside it.
Types of Knowledge
There are two kinds of knowledge- explicit knowledge and tacit knowledge.

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Explicit knowledge can be expressed in words and numbers and shared Knowledge Management (KM)
in the form of data, scientific formulae, specifications, manuals and the
like. This kind of knowledge can be readily transmitted across individuals
formally and systematically. Tacit knowledge, on the other hand, is highly
personal and hard to formalize, making it difficult to communicate or
share with others. Subjective insights, intuitions, and hunches fall into
this category of knowledge. Difficult to verbalize, such tacit knowledge
is deeply rooted in an individual’s actions and experience, as well as in the
ideals, values, or emotions he or she embraces.
These two types of knowledge are complementary to each other, and both are
crucial to knowledge creation. They interact with and change into each other
in the creative activities of human beings. Understanding this reciprocal
relationship between explicit knowledge and tacit knowledge is the key to
understanding the knowledge-creating process. The interaction between the
two types of knowledge can also be called as the knowledge conversion.
Knowledge is created through such interactions among individuals with
different types and contents of knowledge.
Knowledge creation in organizations takes place primarily through the
dynamic process of four different modes of conversion between the two
dimensions of knowledge.
Socialization: Tacit knowledge to conversion takes place when tacit
knowledge within one individual is shared by another through training.
Combination: Explicit knowledge to explicit knowledge conversion takes
place when an individual combines discrete pieces of explicit knowledge
into a whole new concept.
Externalization: Tacit knowledge to explicit knowledge conversion can be
said to take place when an individual is able to articulate the foundations of
his and her tacit knowledge.
Internalization: Explicit knowledge to tacit knowledge conversion takes
place when new explicit knowledge is shared throughout the firm and other
members begin to use it to broaden, extend and reframe their own tacit
knowledge.
The Factors that Constitute the Knowledge-conversion Process:
Socialization: From Tacit to
Tacit
Tacit knowledge accumulation Managers gather information from sales
and production sites, share experiences
with suppliers and customers and engage
in dialogue with competitors.
Extra-firm social information Managers engage in bodily experience
collection (wandering outside) through management by wandering
about and get ideas for corporate strategy
from daily social life, interaction with
external experts, and informal meetings
with competitors.

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Strategic Enablers
Intra-firm social information Managers find new strategies and market
collection (wandering inside) opportunities by wandering inside the
firm.
Transfer of tacit knowledge. Managers create a work environment that
allows peers to understand craftsmanship
and expertise through practice and
demonstrations by the master.

Externalization: From
Tacit to Explicit (Creating
Concepts)
Managers perform facilitation of
creative and essential dialogue, the
use of “adductive thinking”, the use
of metaphors in dialogue for concept
creation.

Combination: From Explicit

to Explicit
Acquisition and integration Managers engage in planning strategies
and operations, assembling internal and
external existing data by using published
literature, computer simulation and
forecasting.
Synthesis and processing Managers build and create manuals,
documents, and databases on products
and services and build up material by
gathering management figures and /or
technical information from all over the
company.
Dissemination Managers engage in planning and in
implementation of presentations to
transmit newly created concepts.

Internalization: From
Explicit to Tacit
Personal experience: real- Managers engage in “enactive liaisoning’
world knowledge acquisition activities with functional dept. by using
cross functional development teams.
Search and share new values and
thoughts: share and try to understand
management visions and values through
communications with fellow members in
the organization.

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 Knowledge Management (KM)
Stimulation and Managers engage in facilitating
experimentation; virtual- prototyping and benchmarking and
world knowledge acquisition facilitate the challenging spirit within
the organization; managers form teams
as a model and conduct experiments and
share results with the entire dept.
Source: Adapted from Nonaka, Byosiere, Borucki, and Konno (1994).

Activity 1
Give examples of any three organizations is the Indian context which,
in recent times have become success stories as a result of knowledge
conversion.
a) …………………………………………………………………..........
b) ………………………………………………..………………………
c) ……………………………………………………………………......

11.4 Knowledge Creation

Most, if not all, firms in developing countries are engrossed in activities to
catch up with advanced countries. Even the majority of firms in advanced
countries are engaged in catching up, as not all firms can be pioneers of
novel breakthroughs even in these countries. Nonetheless, research on
organizational knowledge creation and innovation is concentrated mainly
in advanced countries and is focused mostly on the pioneering process.
Research on those subjects in the catching up process, particularly in
developing countries, is, however, scanty.
Knowledge creation, whether for imitation or innovation, takes place at
two levels- individual and organization. The prime actors in the process
of knowledge creation are individuals within the organization. Knowledge
creation in organizations is not, however, the simple sum of knowledge
creation by individuals. Rather it is the process that creates knowledge,
which is distributed across the organization, is communicated among its
members, has consensual validity, and is integrated into the strategy and
management of the organization. Individual knowledge creation is, therefore,
an indispensable condition for knowledge creation in the organization but
cannot be the sufficient one. Organizations create knowledge only when
individual insights and skills become embodied in organization routines,
practices, and beliefs. Only effective organizations can translate individual
knowledge creation into organizational knowledge creation.
Knowledge creation is a function of an organization’s absorptive capacity.
Absorptive capacity requires a learning capability and develops problem-
solving skills. Learning capability involves the development of capacity
to assimilated existing knowledge (for imitation). While problem-solving
skills represent a capacity to create new knowledge (for innovation).
Absorptive capacity has two important elements: prior knowledge base and
intensity of effort. First, the prior knowledge base refers to existing individual
units of knowledge available within the organization. Accumulated prior

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Strategic Enablers knowledge increases the ability both to make sense of and to assimilate
and use new knowledge. Relevant prior knowledge base includes basic
skills and general knowledge in the case of developing countries, but it
includes the most recent scientific and technological knowledge in the case
of industrially advanced countries. Thus prior knowledge base should be
assessed in its relation to the task difficulty involved. Second, the intensity
of effort refers to the amount of energy expended by organizational members
to solve problems. Learning how to solve problems is usually built up over
many practice trials involving related problems. Such effort intensifies
interaction among organizational members that facilitates knowledge
conversion and creation at the organizational level.

11.5 Knowledge Management

Framework
All mid –sized and bigger organizations need to look at KM seriously- It
is not just a fad anymore nor a far of concept- it is real and here and is now
available- it is of strategic importance and we cannot afford to postpone
it any longer except at the cost of survival. Each industry has its own KM
system evolved to suit its needs. Though the entire process starts with a
bang, but somewhere down the line the entire process stands still. Following
on the CMM Working model, we can devise a similar model for effective
working of a KMS in the organization as depicted below in figure 11.1.

Level 5
Corporate and Individual
Performance

Level 4
Delivery of Knowledge

Level 3
Grouping of Knowledge

Level 2
Technical Infrastructure and Knowledge
Resources

Level 1
Creation of Strategy for KMS

Figure 11.1: Working of a KMS in an Organization.

Level 1: Creation of a Strategy for KMS
This level involves a process where the Best Practices of the organization
are listed and accumulated. A strategy is evolved for accumulation of entire
gamut of the organizational and personal knowledge. Identify organizational
needs/objectives in line with the systems needs/ objectives. Establish
policies, which are to be adhered to.

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Instead of putting the entire process to be unpredictable, we create a process, Knowledge Management (KM)
which makes the organization run on a particular schedule. Performance of
the system is gauged by the capability of the individuals and the organization
collectively with their innate skills, knowledge and motivations. Policies
for managing the system, implementation procedures are established. An
effective process can be characterized as practiced, documented, enforced,
trained, measured, and able to improve.
Level 2: Technical Infrastructure and Knowledge Resources
This level would involve the design of repository, collaboration,
dissemination, and hardware specifications. Technology requirements
as in capture, store, search, retrieve, message, structure, navigate, share,
collaborate, synthesize, solve, recommend, integrate, are maintained in
detail in the process and functionality scope of the system. The output of
one process would/may overflow as the input of another process. Hence
knowledge need not necessarily be sequential. After knowledge is acquired,
synthesized, or created, it needs to be codified, accessed and transferred
again. The knowledge cycle is supported by collaboration.
Functional scope would include the technology, comprising of KM. Semantic
functionality utilizes technologies such as clustering, categorization,
linguistics analysis, data extraction, and knowledge maps. It would also
include functionality filters identification of experts, and alignment of users
into communities (net groups threaded conversations, network directories).
Visualization addresses navigation and retrieval. Scale addresses the range
of data types and physical locations available to KM users.
Technology requirement scope lists technologies that collectively comprise
full function KM. Not every enterprise needs all functions, and no KM
vendor/tools fulfill all of these requirements. The selection of technologies
is preceded by the clear definition of KM strategy and scope. KM deals
with enterprise-wide structured/unstructured data source, representing
multiple data types and formats. KM must bridge knowledge resources to
be accumulated as in the process of existing knowledge, knowledge sharing,
knowledge discovery, identification of intellectual assets of the personnel of
the organization and implementation of KM framework.
The level 2 of the system should allow us to summarize the planning
and tracking of the entire process. The process is under the control of a
knowledge office and each knowledge worker has the right to make the
necessary contribution to the system.
Level 3: Grouping of Knowledge
This level would involve the proper grouping of all the knowledge
accumulated during level 2. Knowledge can be classified in the following
groups: Individual Group/Project/Corporate.
Individual Knowledge: Acquisition of knowledge would involve the
following, search, filter, integrate, capture, store, validate and personalize
the entire process. It would also let the user learn, analyze, interpret,
comment, evaluate, explore and classify the intellectual asset of the person.

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Strategic Enablers Group/Project Knowledge: Individualistic knowledge to be integrated
with the group. What counts here are the integration, management and
recording capability of the group knowledge. Each individual should be
competent enough to know what is happening in his/her group.
Corporate Knowledge: This would cover the knowledge of the
organization, policies, practices, market trends, industry trends and the like,
integration of external sources in the knowledge base. Monitor, comment
and synchronize the entire process of the organizational knowledge. At the
end of this level, all these three groups are to be in sync with each other.
Attention should also to be given to peer groups, inter-group coordination,
intra-group coordination, training program, organization process, and
organization process focus. This level should also ensure that the process
is based on a common, organization-wide understanding of the activities,
roles, and responsibilities in a defined process.
Level 4: Delivery of Knowledge
The level would start with the strategy of identifying audience for all the
resources accumulated. Personalization of the knowledge acquired would
be done here. Audience identified would have to be summarized and the
entire visual to be presented to them for proper usage to establish a common
bond and provide seamless access.
Level 5: Corporate and Individual Performances
This level would require the knowledge office to measure the performances of
the corporate and the individual performances after effective dissemination
of knowledge through the KMS. The information, which has been gathered,
has to be used effectively for better performance of the organization and the
individual.
An effective KM should have the following feature: acquisition, creation,
packaging, or application of internal and external knowledge as a primary
objective of the work. The inputs and the outputs will have high levels of
variability and to a certain extent some degree of uncertainty equivocally,
and incompleteness. The process of knowledge work tends to be variable,
and difficult to analyze as a set of procedures or steps. Characterized by
exception rather than routine, it is performed by professional or technical
workers with a high level of skill and expertise. Knowledge and work
processes include such activities.
Any KM project should essentially have the following four components:
•• Create KR (Knowledge Repository): Involves finding and collecting
internal knowledge and best practices. Some of the knowledge may
be found in organizational documents such as memos, reports, and
presentations and can be easily stored in a repository. Other knowledge
is discovered through discussion. Discussion databases are another
form of knowledge repository. Tools like Lotus Notes and Microsoft
Exchange Server facilitate these discussion databases.
•• Improve Knowledge Access: Involves determining ways to facilitate
finding the person with the required knowledge and then transferring
the knowledge to another person. Sometimes, simply storing the
knowledge in a repository is not sufficient. Face to face transfer of
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 knowledge can be more effective. Technology, such as desktop video Knowledge Management (KM)
conferencing, can enable face-to-face knowledge access.
•• Enhance Knowledge Environment: Involves changing the way people
work. Employees are encouraged to share knowledge as well as reuse
existing knowledge. Coaching and training in learning and sharing
practices will probably be necessary. This may be a very difficult task if
the organization’s culture does not currently share information.
•• Manage Knowledge as an Asset: Involves demonstrating that
effectively using the knowledge management repositories or face-to-
face transfer of knowledge has allowed the organization to save or
make money. This is currently difficult, but will probably become
more accepted as knowledge management becomes more widely used.

11.6 Benefits of Knowledge

Management
Some of the tangible benefits of knowledge management are directly related
to their bottom line savings. In today’s information-driven economy,
companies continuously tap most of the opportunities and ultimately derive
most value from intellectual rather than physical assets. According to
many experts, to get the most value from a company’s intellectual assets,
knowledge must be shared and served as the foundation for collaboration.
Consequently, an effective KM program should help a company leverage
the assets and provide the following benefits:
•• Fostering innovation by encouraging free flow of ideas.
•• Improving customer service by streamlining response time.
•• Boosting revenues by getting products and services to market faster.
•• Enhancing employee retention rates by recognizing the value of
employees’ knowledge and rewarding them for it.
•• Streamlining operations and reducing costs by eliminating redundant
or unnecessary processes.
•• A creative approach to KM can result in improved efficiency, higher
productivity and increased revenues in practically any business
function.
Knowledge Management’s (KM) role is to connect knowledge owners with
knowledge seekers. The knowledge of one is transferred to the mind of the
other, so that a new decision can be made or situation can be handled. KM
provides a means to capture and store passing knowledge and broker it to
the appropriate individuals.
Examples where Knowledge Management can offer greatest benefit
KM is beneficial especially in both social and business segments. Here are
to few examples where KM could provide great benefits:
Social (Governmental)
1. Coping with natural disasters
2. Safety in aviation/railways
3. Research and education
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Strategic Enablers Business
1. Research and Development: Faster solutions and reduction of
redundant research.
2. Design and Development: By allowing easier access to past design
documents, best practices and better designs become available,
faster, making faster deliveries gaining a competitive edge for the
organization.
3. Operations: Problems reported from the field greatly aid in improving
manufacturing practices and add to product quality.
4. Cultural Change: From striving to create and own ideas and objects-
to sharing improving and reusing, in addition to create new ideas and
objects.
Activity 2
Give real world examples in the following areas where KM has been
beneficial.
Company Product
R&D ……………………… ………………………
Design & Development ……………………… ………………………
Cultural Change ……………………… ………………………

11.7 Pioneers in Knowledge

Management
1) Anderson Consulting: Created a system called knowledge Exchange
to facilitate the sharing of problem resolutions and project documents.
2) USAA Insurance Firm: Created a customer feedback system which
increased customer loyalty, cut marketing costs, in addition to raising
profit.
3) GE: GE has since 1982 collected all customer complaints in a database
that supports telephone operators in answering customer calls. GE
has programmed 1.5 million potential problems and their solutions
into its system.
4) Ritz Carlton: All staff members are required to fill in cards with
information from every personal encounter with a guest. These data
plus all guest requirements are stored and printed out to all staff
when the guest arrives again, so that each guest receives a personal
treatment.
5) Agro Corp USA: Sells fertilizers and seed. Data on farmers’ soils are
combined with weather forecasts and information crops. Analyses are
fed back to the farmer via sales representatives to help farmer select
best combinations of crops.
6) Dow Chemical USA: Has put all its 25000 patents into a database,
which is used by all divisions to explore how existing patents can
gain more revenues. The experience from this application is now
being transferred into other intellectual assets, like brands.
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7) Boeing 777 USA: First “paperless” development of aircraft included Knowledge Management (KM)
customers in constructed sub parts, rather than usual organization
design team, construction team. Suppliers worldwide used same
digital databases as Boeing.
8) Beckman Labs USA: A biotech firm has reorganized itself to optimize
knowledge sharing. Has created Knowledge Transfer Department to
co-ordinate efforts. Employees best at knowledge sharing gain both
financial rewards and management positions.
9) McKinsey and Bain and Co: These two management-consulting firms
have development “knowledge databases” that contain experiences
from every assignment including names of team members and client
reactions. Each team must appoint a “historian” to document the
work.
There are many others in the field now in India, all the leading software
development organizations have some kind of KR. Especially those
organizations that have been assessed at level 5 of CMM model of SEI have
initiated KM activity in their organizations. Some of those KM initiatives
are discussed in the following section.

11.8 KM Initiatives in Indian

Organizations
Knowledge Management Initiatives at Infosys
Infosys provides consultancy and software services worldwide to many
companies. It employs large number of employees and executes several
software projects at any given point of time in diverse areas such as
telecom, manufacturing, insurance, finance, etc. “Powered by intellect
and driven by values”, KM at infosys is founded on ‘Learn once and Use
anywhere concept. Needless to say, managing knowledge at infosys is a
huge challenge. Infosys manages organization-wide knowledge using three
centrally operated systems- Knowledge Shop (K-Shop); Process Assets
Database (PAD) and People Knowledge Map (PKM).
Knowledge Shop
Infosys built the K-shop architecture on Microsoft site serve technology,
and all employees can access it through a web interface. The company
encourages people to submit papers related to technology, domain, trends,
culture, project experiences, internal or external literature, etc. They can
submit the articles in any format that the web supports, and designed
templates for various content types to ensure uniformity. In addition, the
K-shop has an excellent search facility that offers search through multiple
parameters. K-shop documents are available to all infosys employees and
are segregated based on the users selected keywords and content type.
Process Assets Database
Process assets database is a database which capture the “as is” projects
deliverable. This database contains the employee’s experiences on projects,
projects artifacts such as project plans, design documents, and test plans.
Users can search the documents, based on domain, technology, project type,
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Strategic Enablers project code, customer name, and so on. This helps provide new project
with information on similar, previously executed projects and helps set
quantitative goals.
People Knowledge Map
The People Knowledge Map is a directory of experts in various fields. It is
an internet-based system where employees can search and locate experts. It
serves as the bridge between knowledge workers: the user and the provider.
Infosys intranet portal SPARSH serves as the window for all systems and
acts as the central tool. The company’s quality system documentation is a
repository of all process-related guidelines, checklist, and templates. These
serve to standardize the projects’ outputs. Infosys also has electronic bulletin
boards for discussing technical and domain-related topics. In addition,
there are news groups and newsletters brought out by various departments
that discuss technology and business trends.
The distinguishing feature, however, is KM with project level focus. Ready
reaction to customer request, improved productivity through rework, and
teamwork are some of the benefits of this approach. Dynamic KM, which
takes the form of web sites to manage knowledge content, training plan
with material to tackle project attrition, weekly knowledge sharing sessions,
defining the KM activities in the project plan (2%-3%) etc. - are some
project related KM activities.
Incentive for knowledge sharing is another feature of KM at infosys. When
an infosys submits a document to the K-shop, experts review the document
in detail. If found acceptable, the K-shop publishes it. The reviewer and
author are rewarded with Knowledge Currency Units (KCU) when an
employee reads or uses a document for the K-shop, he or she is encouraged
to give KCU, for that document based on the benefits gained from reading
it. Authors can accumulate KCUs for their documents and redeem them
for cash or other gifts. Thus, KCU serve twin objectives: they act as a
mechanism both for rewarding knowledge sharing and rating the quality of
assets in the repository.
Infrastructure supporting KM includes LAN/WAN/RAS facilities,
E-mail, internet, intranet, and extranets. Voice/Fax Networking/Chat,
Video Conferencing, Real Audio/Video/Web-cast, Business Solutions
Hosting, Systems Management, Technology Enabled Help-desk, Customer
Connectivity, etc. Recognizing and Rewarding Innovation and KM is
done through funding for presentation at conferences, Publications on web
sites, “Ideas beget wealth”- the syslabs awards for technical innovation,
best practice sharing, KCU- the Knowledge Currency Unit, innovation is
a criterion for the infosys Excellence Award, “Innovation management”-
a key result area in the infosys KMM (knowledge management maturity)
model.
The K-shop owns around 12,600 documents. Knowledge Management has
helped infosys increase its productivity and reduce defect levels. A rough
estimate shows that infosys reduced its defects level by much as 40%, thus
significantly reducing the associated rework and the cost of detecting and
preventing defects. Also, effective reuse has increased productivity by 3%.
All of this has been possible due to faster access to accurate information
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and reuse of knowledge. A team of eight full time employees designated as Knowledge Management (KM)
‘Brand Managers’ help build and maintain the KM infrastructure in infosys.
Knowledge Management Initiatives at BaaN
BaaN is a world leader in powerful, innovative, easy-to-use business
software. They are at the cutting edge of business technology used by
industry leaders all over the world- promoting collaboration between
customers and suppliers, linking people and processes across the world, and
using the internet to make business faster and more cost-effective.
They have turned towards knowledge management, in keeping with the
demands of time. Two departments, namely, “Knowledge Transfer” and
‘Knowledge Development’ are projected for this purpose. Their main
objective is to empower the members with skills necessary to meet the
external world. They have a centralized database system and it is christened
as “SCOPUS”. Intranet facility is provided for the members with their
identity and password to use the system.
One of the features of BaaN is the encouragement provided to the employees
for Knowledge management. “ASK HR” is one such technique that provides
a chance to the employees to make use of public folders and register their
doubts and genuine problems. Longer duration training programmes are
provided for new recruits. The others receive short or mini programmes to
update their knowledge.
BaaN’s attempts to multiply knowledge could be seen in the well-maintained
library for the purpose. They contain technical as well as non-technical
printed material and is used by those employees who crave for knowledge.
“SPANDANA” known as ‘reaction’ is keenly felt in their monthly meetings.
The people talk and they talk openly and freely with the management.
They are helpful in extending the sharing of the knowledge, which is
considered as rich source of knowledge. The meetings also make the
people to come out of their shell and express their genuine concern for
aspects that the organization stands for. Sharing of knowledge, beyond
doubt highlights the brighter side of the employees’ vast experiences in
particular fields, their updated knowledge, their concern for the system and
their sense of responsibility. Periodic Seminars and discussions help both in
documentation and multiplying the knowledge thus leading to an effective
knowledge management.

11.9 Software For Knowledge

Management
KM suites provide solutions for creating centralized repositories for storing
and sharing data (knowledge) as well as providing solutions and tools for
searching, retrieving and managing this data.
1. Retrieval ware by Convera- www.convera.com: Retrieval ware
creates a complete inventory of all enterprise assets, and then enables
users to search more than 200 document types on file servers, in
groupware systems, relational databases, document management
systems, web servers and more while respecting access rights- all
from a common user interface.
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Strategic Enablers 2. Rightnow Technologies- www.rightnow.com: Knowledge
Management Software. The self-learning-knowledge base completely
integrates all communication channels resulting in customers and
agents accessing information -whether they use self-service, submit
an email or initiate a live chat session.
3. IBM-Lotus- Knowledge Discovery Products: A discipline providing
the strategy process, and technology to share and leverage information
and expertise to do just that knowledge discovery products and
solutions can help rapidly achieve KM by capturing and organizing
knowledge in the form of content, expertise and communication
so it can be easily managed, located, evaluated and reused to drive
responsiveness, innovation, efficiency and learning. This is shown in
figure 11.2.

Data Warehouse Discussion Database

Communication Layer
(Managing/Groupware/Intranet/Internet)
Intelligence /Logical Layer
(Agents/Filters/Data Mining/Work Flow)
User Interface Layer

USERS
Figure 11.2: Technology Architecture

11.10 Trends And challenges In

Knowledge Management
Many software development organizations have been assessed for SEI’s
Capability Maturity Model (CMM) in India and many had been assessed at
level 5. This mandates that the organization have a KR- and thus most of
these organizations have instituted a KR in their respective organizations.
These are not accessible for public but are accessible to their organizational
members.
Presently the emphasis is being focused on Information Technology
related KM-creating tools and techniques that facilitate creation of KR and
effectively utilizing it.
Groupware (IBM-Lotus Notes, Microsoft Exchange Servers-Outlook) has
become the more popular tool. Reasons are not hard to guess-
•• It facilitates Discussion Groups very effectively
•• It is very economical and cost effective
•• Familiarity- they are the most popular e-mail tools
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•• Easy to use for creation of KR and using it Knowledge Management (KM)

•• Robust and reliable tools

•• However, analytical tools are absent
Data warehouse aids creation of KR. Data Warehousing has grown from
data repository to Knowledge Repository. Tools like, OLAP and data mining
techniques facilitate effective utilization of KR. These facilitate not only
extraction of information but also analysis. However, the costs are high in
this segment.
ETL (Extraction Transformation and Loading) tools facilitate extraction of
information from external sources including web pages, transforming them
to desired format and loading them into the organizational KR. Business
intelligence (BI) tools facilitate interpretation and form inferences, BI
coupled with KM is fast emerging as a very powerful Decision Support
System (DSS). This trend may, in near future, provide the success and
impetus to DSS, which it has been lacking so far.
Issues and Challenges in KM
“Organizations have dispersed for real and critical reasons,” says Chad
Weinstein, Director of Knowledge Management consultant for Sopheon
PLC, a Minneapolis-based professional services and software company.
‘It lets them get the best talent, the best resources and close proximity to
potential clients or crucial suppliers.” Along with the opportunities that
come with dispersion, a globetrotting, telecommuting workforce presents
challenges in managing and disseminating a corporation’s collective
knowledge.
The first of those challenges is merely getting individuals within the
company to communicate with each other wherever they are located,
according to Daniel Rasmus, vice president and KM research leader for
Giga Information Group Inc. in Aliso Viejo, Calif. “Ridiculous as it may
sound, many organizations have trouble getting people to share information
who aren’t on the same floor, so adding remote workers or those in other
geographical locations can prove difficult,” he says.
Enterprises are realizing how important it is to “know what they know” and
be able to make maximum use of the knowledge. This knowledge resides in
many different places such as: databases, knowledge bases, filing cabinets
and peoples’ heads and are distributed right across the enterprise. All too
often one part of an enterprise repeats work of another part simply because
it is enterprise impossible to keep track of, and make use of, knowledge in
other parts. At Tata Steel, one incident more than any other drove home this
point. In 1999, a foreign technical consultant was summoned to the Indian
steel giant to solve a problem. He replied that he had already been engaged
and solved it the year before. In other words, the company, despite having a
sophisticated IT infrastructure, did not seem to systematically “know” what
its problems were and how it had been solving them.
Enterprises need to know:
•• What their knowledge assets are?
•• How to manage and make use of these assets to get maximum return?
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Strategic Enablers Knowledge assets are the knowledge regarding markets, products,
technologies and organizations, that a business owns or needs to own and
which enable its business processes to generate profits, add value, etc.
Knowledge management is not only about managing these knowledge
assets but also about preserving knowledge; using knowledge, and sharing
knowledge. Therefore, knowledge management involves the identification
and analysis of available and required knowledge assets and knowledge
asset related processes, and the subsequent planning and control of actions
to develop both the assets and the processes so as to fulfill organizational
objectives. Success in an increasingly competitive marketplace depends
critically on the quality of knowledge, which organizations apply to their key
business processes. For example, the supply chain depends on knowledge
of diverse areas including raw materials, planning, manufacturing and
distribution. Likewise product development requires knowledge of
consumer requirements, new science, new technology, marketing, etc.
The challenge of deploying the knowledge assets of an organization to
create competitive advantage becomes more crucial as:
•• The marketplace is increasingly competitive and the rate of innovation
is rising. So that knowledge must evolve and be assimilated at an
ever-faster rate.
•• Corporations are organizing their businesses to be focused on creating
customer value. Staff functions are being reduced, as are management
structures. There is a need to replace the informal knowledge
management of the staff function with formal methods in customers
aligned business processes.
•• Competitive pressures are reducing the size of the workforce, which
holds this knowledge.
•• Knowledge takes time to experience and acquire. Employees have
less and less time for this.
•• There are trends for employees to retire earlier and for increasing
mobility, leading to loss of knowledge.
•• There is a need to manage increasing complexity as small operating
companies are transnational sourcing operations. A change in strategic
direction may result in the loss of knowledge in a specific area. A
subsequent reversal in policy may then lead to a renewed requirement
for this knowledge, but the employees with that knowledge may no
longer be there.
Another reason for the difference between tacit and explicit knowledge is
more than academic is that, by and large, the distinction determines who
owns the knowledge. Explicit knowledge is most likely the property of the
firm. One way or another it is either data or work product. But since tacit
knowledge cannot be codified, it effectively remains the property of the
knowledge worker. Companies have certainly tried to own this knowledge.
While the company employs them, knowledge workers are ethically—and
sometimes contractually—prohibited from sharing their knowledge with
competitors. But if the knowledge workers leave the firm they take that
knowledge and its inherent value with them.
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Making this distinction between knowledge and the knowledge worker Knowledge Management (KM)
makes it easier to account for knowledge assets. A knowledge worker
is an asset that appreciates over time. Knowledge itself is more often a
depreciating asset. Patents, for example, quickly lose their value if not
licensed quickly. A sales lead becomes worthless if the contact chooses a
competitor’s product or leaves the customer’s company for another job.
Unlike other resources, however, knowledge is not subject to the law of
diminishing returns; it is not depleted through use.
KM technology solutions themselves pose a challenge to implementation.
Existing solutions often require customization that puts a “significant
burden” on implementers. A survey with IT executives also said that
they are waiting for some collaboration and communication tools to fully
develop, such as voice recognition technology. The process approach
allows an end-to end view of how best to structure, sequence, and measure
work activities to reach the targeted outcomes. Processes are described as
“specific ordering of work activities across time and place, with a beginning,
an end, and clearly identified inputs and outputs: a structure for action.”
The process approach promotes an examination of what and how things are
done from a viewpoint of producing value for a customer. The capabilities
of information technology (IT) also promote an explicit management of
knowledge processes. IT can be used to capture, codify, distribute, and
apply the firm’s best knowledge.
Getting employees on board is a major issue in an environment where an
individual’s knowledge is valued and rewarded. Establishing a tradition
that recognizes tacit knowledge and encourages employees to share their
knowledge are ways companies motivate employees to participate in KM.
Incentive programme is another way. However, there’s the danger that
employees will participate solely to earn incentives, without regard to the
quality or relevance of the information they contribute.
KM is not a technology-based concept. It needs careful planning and
analysis. While technology can support KM, it is not the be all and end all
of KM. KM decisions should be based on who (people), what (knowledge)
and why (business objectives). Also a KM programme should be in sync
with the business goal. While sharing best practices is a good idea, there
must be an underlying business reason to do so. Without a solid business
case, KM is a futile exercise.
Knowledge is not static. As with many physical assets, the value of
knowledge can erode over time. Since knowledge can get stale fast, the
content in a KM programme should constantly updated be amended, and
deleted. Further, the relevance of knowledge at any given time changes,
as do the skills of employees. Therefore, there is no endpoint to a KM
programme. Like product development marketing and R&D, KM is
constantly evolving business practice. Another most important fact is that
not all information is knowledge. Companies diligently need to be on the
lookout for information explosion and overload. Here quality is the key and
not quantity.

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Strategic Enablers
11.11 Summary
The importance of knowledge as a key source of competitive advantage is
now well established in management studies, as suggested by the growing
literature focusing on knowledge creation and transfer. Knowledge is
undoubtedly an indispensable resource to create value for the next generation
of society, industries, and companies. Yet, despite all the discussions
and attentions in both the academic and business worlds, very few have
articulated how organizations actually create and manage knowledge. Many
companies still seem to remain locked in the phase of building efficient and
effective information technology (IT) systems when they try to “manage
knowledge”.
It is imperative for today’s progressive organizations to integrate
Knowledge Management (KM) in their routine operations. Incentive for
this is the falling cost of hardware and availability of appropriate software
tools to capture and manage corporate knowledge. Now the sources of
knowledge are moving from paper to soft copy form and on to the web-
thus- available to all, either freely or through payment of a nominal fee.
This soft copy form of information/knowledge lends itself to automatic
collection, transformation and manipulation besides being amenable to fast
distribution to all concerned- all these can be accomplished automatically
without human intervention. KM progresses through four stages namely,
create Knowledge Repository, improve knowledge access, create knowledge
environment and manage knowledge as an asset.
Challenges in effective implementation of KM in organization stem from
new forms of acquiring information, new tools to store and manipulate
information, new tools for transformation of information, new ways
of working over distance and time, and to shift from information access
and sharing to knowledge networking. KM has been progressing from
Groupware and Data warehousing to Business Intelligence through usage
of sophisticated software tools. KM can give significant benefits to
organizations by assisting them to improve quality of service delivery, avert
disasters and reduce costs through early recognition patterns, alerts and
probable actions.

11.12 Key words

Combination: Explicit knowledge to explicit knowledge conversion takes
place when an individual combines discrete pieces of explicit knowledge
into a new whole.
Externalization: Tacit knowledge to explicit knowledge conversion can be
said to take place when an individual is able to articulate the foundations of
his and her tacit knowledge.
Explicit Knowledge: can be codified and expressed in a human or formal
language. It can be expressed in works and numbers and shared in the form
of data, scientific formulae, specifications, manuals and the like. This kind
of knowledge can be readily transmitted across individuals formally and
systematically.
Internalization: Explicit knowledge to tacit knowledge conversion takes
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place when new explicit knowledge is shared throughout the firm and other Knowledge Management (KM)
members begin to use it to broaden, extend and reframe their own tacit
knowledge.
Knowledge: is collection of facts, ideas, learning’s and policies, practices
and a lot more. Knowledge can also be defined as agreed- upon explicit or
formal facts, rules, policies and procedures.
Knowledge Management: is the collection of processes that govern the
creation, dissemination and utilization of knowledge.
Skills: are information processing competencies that can generate explicit
knowledge. Skills are learned by doing; knowledge is learned by studying
or investigating.
Socialization: Tacit knowledge to conversion takes place when tacit
knowledge within one individual is shared by another through training.
Tacit Knowledge: is highly personal and hard to formalize, making it
difficult to communicate or share with others.

11.13 Self-Assessment Questions

1) What is Knowledge Management (KM) and how does it enhance the
competitiveness of a firm?
2) Describe the various steps involved in a KM framework. What are the
essential components of a KM project?
3) Search for articles and information about Indian companies that have
taken KM initiatives. Highlight some important issues discussed in
those articles.
4) What are the problems and challenges in the implementation of a KM
system?

11.14 REFERENCES / Further Readings

Civi E. (2000). “Knowledge Management as a competitive asset: A Review”,
Market Intelligence and planning Vol 18 (40).
Duffy, (2000). “Knowledge management –to be or not to be?” Information
Management Journal, Vol 34 (1), 2000.
Eisenhart. (1989). “Knowledge Management- Building Theory from Case
Study Research”, Academy of Management Review, Vol 14.
Noneka, Ikujiro. “The Knowledge Creating Company”, Harvard Business
Review, Vol 34 (6).
Van Krough, George. (1998). “Care in Knowledge Creation”, California
Management Review, Special Issue on the Knowledge and the Firm (pages
135-53).

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