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Knowledge Management: Concepts, Practices and Effects

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Abstract

Today Information Technology is gaining new heights with greater leaps. This enables new age managers to develop newer tools to manage business better. IT has not only expedited the intra and inter organizational communication but also enabled us to manage a lot of data effectively.

Knowledge management is emerging as a key management tool for the new century. Although it can be defined in a variety of ways, the process of organizing knowledge in order to get a sustainable development can be termed as Knowledge management. It consists of identification, representation, distribution, application and utilization of available knowledge to get improved performance. Knowledge Management in a company is carried out by systematically organizing the intellectual capital to achieve its business goals. The intellectual capital means the company's intangible assets which increase its valuation. The Core competencies of a company go together with the sustainable competitive advantage.

This report explains the process of Knowledge Management to bring in Competitive advantage in the Indian IT industry. It also elaborates on the methods on how innovation can be encouraged in the company. Further, the challenges for KM like resistance to culture change and tacit knowledge sharing are discussed. In India companies have started taking knowledge management as an important aspect as it not only gives a good working culture but also improves the return on investments eventually. However, there is still a good scope of improvement in the field of Knowledge management for the Indian IT industry.

The research uses questionnaires and interpretations from interviews to collect primary data .Though it gives a comprehensive analysis, it leaves a further scope for research in the field.

CHAPTER 1:

INTRODUCTION

Knowledge Management is relatively new buzz in the corporate world. It is a tool developed to safeguard the organization from competition in future. Apparently, the physical assets and tangible capacities are not sufficient to sustain a competitive advantage in today's market place. What make difference in the long run are the intangible assets, such as Brands, Intellectual property, knowledge etc. These assets can not be bought but have to be created within organization, by the members of organization over a period of time.

Aim

The aim of this report is to identify and analyse the concepts and current practices of Knowledge management in order to recommend ways of propelling innovation and competitive advantage within the companies.

Objective

The Research Objective is to

  • Get a comprehensive idea of the current Knowledge Management practises.
  • Identify and analyse the challenges faced by the organizations in implementing Knowledge Management
  • Know the ways of how companies can propel innovation and competitive advantage.
  • Recommendations in order to improve the company culture.
  • Suggest the methods to attain sustainable competitive advantage handling the challenges faced.

Key Questions

The guiding principal of my research is as follows

  • How do companies integrate KM with their company policies?
  • How change should be initiated?
  • What are the levels of hierarchy?
  • When the change does actually happen?
  • Is KM just for innovation, competitive advantage or more?
  • Are rewards and recognition the way to drive KM?
  • What are the basic challenges for KM?

Research Approach

The research philosophy is Positivism -- Philosophy that involves working with an observable social reality. The emphasis is on highly structured methodology to facilitate replication, and the end product can be law-like generalisations similar to those produced by the physical and natural scientists. (Saunders, 2000) This research contains mainly qualitative data collection methods for both primary and secondary data. Primary data was obtained by interviewing the key people of some of the IT companies in India. Questionnaire was designed to get the views of the employees working in the IT industry.

Questionnaires were also designed and used to obtain primary data. The response of these questionnaires is being used in order to obtain a particular result in the form of percentage. The secondary data has been collected through books, journals, websites, etc. All of the research methods will be discussed in further detail in the relevant chapter.

Research Outcomes

The key outcome of this research would be a perfect understanding of the knowledge management practises and to know how companies use it in India for competitive advantage and innovation. Thus using this knowledge the researcher expects to identify main problems in the current trends and evaluate solutions for them. Finally, it also determines the difference between being a multinational corporation (MNC) and small to medium enterprise (SME) with respect to knowledge management.

CHAPTER 2:

METHODOLOGY

This chapter describes the research methodology adopted for the report. To start with, this report elaborates on the research philosophy - Positivism, moving on towards the various stages of research like primary and secondary data collection methods. The reasons behind selecting the particular method are also explained in the report.

2.1 Approach

This report includes both primary and secondary data collected from various sources. Secondary data refers to data already collected by someone else and primary data is collected for a specific purpose by the researcher (Saunders, 2000).The research philosophy is Positivism -- Philosophy that involves working with an observable social reality. The emphasis is on highly structured methodology to facilitate replication, and the end product can be law-like generalisations similar to those produced by the physical and natural scientists. (Saunders, 2000)

2.1.1 Research Strategy:

This research is based on the quantitative research strategy which involves collection of data from various sources. It also proposes to collect some primary data through interviews and questionnaires from people from the IT industry in India.

A survey is a method whereby a sample of subjects is drawn from a population and studied to make analysis about the population. The survey strategy enables the researcher to collect a large amount of data in a highly efficient way.

2.1.2 Sample Size:

For the interviews there was no such constraint of number of questions. The interviewees were asked questions in order to know the KM practices in their organization. In case of the questionnaires due to restrictions of time and access, only 500 questionnaires were distributed to various IT company employees. The reason for distributing the questionnaires to the employees from all the levels and department was to get a clear idea of how employees take the concept of Knowledge management at their workplace.

2.2 Research Stages

2.2.1 Secondary Data Collection: The first stage of the research was a critical literature review to obtain the secondary data. Secondary data collected includes the information and concepts from books, journals and websites based on Knowledge management, Organisational behaviour, Knowledge Integration etc. The list of various sources referred can be viewed from the relevant chapter of the report. Access to the books and journals was through Coventry University Library and electronic library databases like FAME, Engineering Village2 etc. Case studies of various companies as mentioned in the appendices were analysed by the researcher in order to get the relevant information and to decide on certain concepts considering them as the evidences.

2.2.2 Interviews: The second stage of the research was to interview some key people of various IT companies in India. Selection of these companies for the interview was done on the basis of how KM practices are being carried out there. These vary from the Market leaders to the new entrants in the IT industry. Many companies are such that they have been practising good KM processes since a long time, but a few have just started to get into it. This was done so because it gave researcher a clear idea of the current scenario in the Indian IT industry. Selecting the best companies alone would not have helped in introducing the scope of improvement for the research. The interviews were face to face interviews and the researcher has written down the important points from the session. The people who have been interviewed were mainly the Knowledge Management Executives in the companies. These were the people who knew exactly what processes are being practised in the company, so interviewing them was the best way to get the details about the KM practices in the companies. Their designations were like senior knowledge officers, Chief knowledge officers etc. Confidentiality was requested by the interviewees so company names are not mentioned anywhere.

2.2.3 Questionnaires:

The final stage for primary data collection was through questionnaires. The questionnaires designed were distributed to the employees of junior level in the IT companies. It had just 10 questions but they were selected in such a way that the they would serve the main purpose of the survey - to understand the current scenario in Indian IT industry among that class of employee by whom the KM practices are expected to follow. Questions selected were simple to answer so that the respondents are interested in answering till the end of the questionnaire. This also makes it possible to collect maximum responses. These questionnaires were not passed on to the management level or the KM people as the interviews were carried out with them. The researcher wanted to extract information from the employees in the Indian IT companies regarding their views about the Knowledge Management processes in their companies. This was also helpful in getting an overview of the facts about the how aware the Indian corporate world is in regards with knowledge management.

CHAPTER 3:

CRITICAL LITRATURE REVIEW

3.1 Introduction

3.1.1. What is knowledge?

Definition of knowledge provided by Schulz (2001) beginning with the 1992 American Heritage Dictionary: ‘knowledge is what has been learned from experience or study. Knowledge is a broad concept that usually includes insights, interpretations, and information. Organizational knowledge refers to knowledge and information that all, part, or parts of the organization share, and that is frequently stored in standard operating procedures, routines, or rules'.

Today, knowledge has emerged and is accepted as the most critical resource available to an organization (Bartlett and Ghosal 1993, Davenport and Prusak 1995, Drucker 1993, Leonard-Barton 1992, Nonaka 1991, Nonaka and Takeuchi 1995, Nonaka et al. 2001, Stewart 1997 and 2001, Toffler 1990 and World Bank 1998).

Knowledge can be defined as the understanding of a concept gained by education, experience or even by mere observation. To acquire knowledge means processing of information with the help of learning, communication, perception, reasoning and linking. It is the theoretical or practical understanding of information and facts which is obtained by correctly processing the raw data.

Here arises the need to understand the difference between data, information and knowledge. Data is the collection of certain facts or values about a particular concept. Information is the processing done on data using relevant theory. The organization of data is nothing but information. The extraction of information on the basis of proper understanding is Knowledge. This can be further explained by considering an example of solving a quadratic equation. The variables are in the form of information, a value of the variable is data and the operation we carry out with them for calculating the answer is our knowledge.

The following figure shows the DIKW (Data Information Knowledge Wisdom) hierarchy as stated by Clark, 2004.

Figure 1: The DIKW hierarchy (Clark, 2004)

Knowledge is generally personal, subjective and inherently local - it is found “within the heads of employees” (www.ichnet.org/glossary.htm 2004)

3.1.2 Classification of Knowledge:

Knowledge can be classified as:

1. Tacit Knowledge - This type of knowledge is hard to formulate and communicate because it is gained by experience. Tacit knowledge is personnel and context specific. People carry tacit knowledge in their brain, thus it is not easy to share it. There is no systematic approach to store tacit knowledge as people are many times unaware of their tacit knowledge. However it is the most valuable form of knowledge as it is can be acquired only by experience and is not easily found written anywhere.

2. Explicit Knowledge - Explicit knowledge is transmittable into a formal systematic language with the help of tacit knowledge. Thus, the codification of ones tacit knowledge results into explicit knowledge. Explicit knowledge can be in the form of books, manuals, notes, documents etc. The definition of some phenomenon is the explicit part whereas the practical understanding behind the phenomenon is tacit.

3. Embedded Knowledge - The knowledge contained in some kind of physical form is known as embedded knowledge. For example the design of an artefact gives us the basic idea of where it can be used.

3.1.3 Knowledge Management.

Knowledge management is defined as the process of getting the right information to the right people at the right time, and helping people create knowledge and share and act upon information in ways that will measurably improve the performance of organization and its partners. This means providing access to information at the time people need it to make the best decisions possible for mission safety and success.

According to Wally Block of The Intranet Journal, the following points make up the generalized term: Knowledge Management.

  • Knowledge management is the way that organizations create, capture and reuse knowledge to achieve organizational objectives.
  • Knowledge management can also be defined as a process with four parts that comprise a loop.
  • Knowledge is created. This happens in the heads of people.
  • Knowledge is captured. It is put on paper in a report, entered into a computer system of some kind or simply remembered.
  • Knowledge is classified and modified. The classification can be the addition of keywords; it may be indexing. Modification can add context, background or other things that make it easier to reuse later. The test of this step's success is to determine how easily people in the organization will be able to find and use the knowledge when they need it.
  • Knowledge is shared. When knowledge is shared and used, it's modified by the folks who use it. This takes us back to knowledge creation.

The process of organizing knowledge in order to get a sustainable development can be termed as Knowledge management. It consists of identification, representation, distribution, application and utilization of available knowledge to get improved performance.

Knowledge Management in a company is carried out by systematically organizing the intellectual capital to achieve its business goals. The intellectual capital means the company's intangible assets which increase its valuation.

3.2. Knowledge Creation:

According to Nonaka “the key to knowledge creation lies in the mobilization and conversion of tacit knowledge”. The process of Knowledge creation is done my transformation of tacit and explicit forms thus giving rise to four forms of transformations. This can be further explained with the help of the following diagram:

Fig: Nonaka's Spiral model.

Source: Nonaka, I.  (1991)  "The knowledge creating company." Harvard Business Review, 69, (Nov-Dec)

  • Tacit to Tacit: Socialization

Team meetings are held to share the experiences of the team members. This provides everyone to share their ideas and also solution of similar problem in the past can be used.

  • Tacit to Explicit: Externalization

This can be done by having question answer sessions. Here the senior employees are capable of solving the queries of their juniors.

  • Explicit to Explicit: Combination

Sharing of documents is the best example of this type of transformation. The case studies, notes etc can be exchanged in order to have a faster creation of knowledge.

  • Explicit to Tacit: Internalization

Internalization can be done by reading and understanding documents prepared by others. Extracting knowledge from an e-mail received from a colleague is the best example of this.

3.3 Knowledge Capture

3.4 Knowledge Sharing

The World Bark (1998) identifies and discusses the most important decisions that an organization must make in establishing its knowledge management program. These are:

Deciding with whom to share; deciding what to share; deciding how to share; and deciding to share.

3.5 Learning Organization:

A "Learning Organization" is one in which people at all levels, individually and collectively, are continually increasing their capacity to produce results they really care about. The learning organization focuses on enhancing its systems (including people) to continually increase the organization's capacity for performance.

The concept of learning organization can be better understood by considering the following points:

  • Development

An organization learns many important aspects of business, skills and technology during the process of learning. For an organization to grow in a competitive world, it is very important to never let the learning process end.

3.5.2 Levels of learning:

  • Aligning learning with corporate priorities
  • Designing learning for maximum impact
  • Using e-business technologies to enable formal and informal interactions
  • Obtaining recognition by the entire organization that learning is a critical enabler to success
  • Community of Practice

Ardichvili, Page and Wentling (2003) study community of practice at Caterpillar Inc and find that when employees view knowledge as a public good belonging to the whole organization, it flows easily. However, even when individuals give the highest priority to the interest of the organization and of their community, they tend to shy away from contributing knowledge out of fear of criticism or misleading the community members. Trust increases knowledge sharing.

Essex (2000) discusses a study titled .Beyond knowledge Management: New ways to Work and Learn undertaken by the Conference Board in New York in early 2000. It says that management support and corporate culture, not technology, drive successful KM projects.

CHANGE -- what draws people to share varies from organization to organization and matches the core values and other processes. Alignment with the current culture and a practical purpose to share is, specifically, what draws people most strongly to share knowledge.

(Blue -- http://gbr.sagepub.com/cgi/reprint/7/1/119)

The concept of a community of practice (often abbreviated as CoP) refers to the process of social learning that occurs when people who have a common interest in some subject or problem collaborate over an extended period to share ideas, find solutions, and build innovations

  • Communities of Action
  • Communities of Circumstance
  • Communities of Interest
  • Communities of Position
  • Communities of Purpose

(Source: Shin and Bickel (2008) - in Chris Kimble and Paul Hildreth (2008). Communities of Practice: Creating Learning Environments for Educators. Information Age Publishing)

  • Obstacles
  • Performance Management

NECESSITY OF KNOWLEDGE MANAGEMENT

A systematic capture, transfer, and use of internal and external know-how are a vital part of any business strategy.

  • With no common processes for sharing information among employees, partners, and customers, limited information exchange will occur among suppliers and the engineering, manufacturing, and service functions. Consequently, the organization will experience ineffective design reuse, and product launch mistakes will be repeated.
  • If there is no company standard expertise locator or people finder, then the inability to locate subject matter experts will result in lost opportunities, lost time, and being incapable of applying the right resources to significant problems. And with too many different systems, proposals, and pricing sheets, sales representatives cannot have access to information they need when they need it. This can prolong the sales cycle and lead to less-than-best sales solutions offered to the client
  • With retirement and turnover, knowledge is walking out the door everyday. New hires do not have the benefit of past experiences and lessons learned, yet their time-to-competence needs to be compressed.
  • Mergers and acquisitions result in two bodies of knowledge and expertise and two cultures that must assimilate quickly.
  • Portals and e-business are drivers of knowledge management. People want information they can use and trust from a single point of access. Also, an often neglected point is that customers want access to your knowledge and to their business transactions with you.
  • Another driving factor is e-learning. Firms now must know where and how knowledge is really being created and acquired. Knowledge management can set the framework for how learning fits into the overall picture of developing employees and making them productive.

The key component of a good knowledge management system is the content itself. If the knowledge management system does not provide users with timely, accurate information, inform them of best practices, and link them to expertise, organizations will not realize the full value of their investment in the system. One of the key steps in the strategic design of knowledge management systems is identifying the information already in use within an organization.  Although, in theory, an effective knowledge management system is a central database of data, information, and knowledge contained within the organization, the act of actually creating, maintaining, and using such a central repository is a challenge in practical terms.

One of the many benefits of knowledge management is the learning that occurs when a user takes a piece of information from one place, personally transforms it, and creates something new. Although the designers and developers of the knowledge management system can facilitate this type of learning by encouraging those who have the knowledge to capture it, and by designing a system that links end users to information that they might find helpful, neither the designers nor the developers could have planned or predicted such this particular act of learning. It happened informally, without the guidance of an instructor and without the suggestion of a designer.” (Carliner, section 1)

Knowledge Management takes advantage of a company's information experience and expertise to serve customers better and respond quickly to changing marketing conditions.

Successful companies build a corporate environment that fosters a desire for knowledge among their employees and that ensures its continual application, distribution and creation.  Less successful companies tend to take a top down approach: pushing knowledge to where it is needed.  Besides creating an environment that encourages knowledge pull, successful companies excel in applying, distributing, and creating knowledge.  (Hauschild, 2001)

Companies link all their information together and build models that improve processes, product and customer relations.  Such companies understand that true knowledge management requires them to develop ways of making workers aware of those links and goes beyond infrastructure to touch almost every aspect of business.

COMPONENTS OF KNOWLEDGE MANAGEMENT SYSTEM

“The key component of a good knowledge management system is the content itself. If the knowledge management system does not provide users with timely, accurate information, inform them of best practices, and link them to expertise, organizations will not realize the full value of their investment in the system. One of the key steps in the strategic design of knowledge management systems is identifying the information already in use within an organization.  Although, in theory, an effective knowledge management system is a central database of data, information, and knowledge contained within the organization, the act of actually creating, maintaining, and using such a central repository is a challenge in practical terms.

One of the many benefits of knowledge management is the learning that occurs when a user takes a piece of information from one place, personally transforms it, and creates something new. Although the designers and developers of the knowledge management system can facilitate this type of learning by encouraging those who have the knowledge to capture it, and by designing a system that links end users to information that they might find helpful, neither the designers nor the developers could have planned or predicted such this particular act of learning. It happened informally, without the guidance of an instructor and without the suggestion of a designer.”

Knowledge Management takes advantage of a company's information experience and expertise to serve customers better and respond quickly to changing marketing conditions.

Successful companies build a corporate environment that fosters a desire for knowledge among their employees and that ensures its continual application, distribution and creation.  Less successful companies tend to take a top down approach: pushing knowledge to where it is needed.  Besides creating an environment that encourages knowledge pull, successful companies excel in applying, distributing, and creating knowledge.

Companies link all their information together and build models that improve processes, product and customer relations.  Such companies understand that true knowledge management requires them to develop ways of making workers aware of those links and goes beyond infrastructure to touch almost every aspect of business.

ENTERPRISE KNOWLEDGE MANAGEMENT

Enterprise knowledge management entails formally managing knowledge resources in order to facilitate access and reuse of knowledge, typically by using advanced information technology. KM is formal in that knowledge is classified and categorized according to a prespecified—but evolving—ontology into structured and semi structured data and knowledge bases. The overriding purpose of enterprise KM is to make knowledge accessible and reusable to the enterprise.

Knowledge resources vary for particular industries and applications, but they generally include manuals, letters, summaries of responses to clients, news, customer information, competitor intelligence, and knowledge derived from work processes. A wide range of technologies are being used to implement KM systems: e-mail; databases and data warehouses; group support systems; browsers and search engines; intranets and internets; expert and knowledge-based systems; and intelligent agents. In artificial intelligence, knowledge bases are generated for consumption by so-called expert and knowledge-based systems, where computers use rule inference to answer user questions. Although knowledge acquisition for computer intervening is still important, most recent KM developments make knowledge available for direct human consumption or develop software that processes that knowledge.

Historically, KM has been aimed at a single group—managers—through what has been generally referred to as an executive information system. An EIS contains a portfolio of tools such as drill-down access to databases, news source alerts, and other information— all aimed at supporting managerial decision making. More recently, however, KM systems are increasingly designed for entire organizations. If executives need access to information and knowledge, their employees are also likely to have an interest in and need for that information. In addition, KM technology is ideally suited for non management groups—such as customer support, where customer service requests and their solutions can be codified and entered into a database available to all customer service representatives.

IMPLEMENTING KNOWLEDGE MANAGEMENT

As organizations store an increasing amount of information and knowledge in data and knowledge warehouses and in data and knowledge bases, they are attempting to manage that knowledge in more efficient ways. Historically, organizational knowledge has been stored on paper and in people's minds. Unfortunately, paper has limited accessibility and is difficult to update. And when people leave, they take most of their knowledge with them, so reuse is not always feasible. Thus, firms have moved to data and knowledge warehouses and to data and knowledge bases to improve accessibility, updatability, and achievability of data and knowledge.

Data warehouses

In many companies, one of the first KM tools is a data warehouse. A data warehouse acts as a central storage area—a warehouse—for an organization's transaction data. Data warehouses differ from traditional transaction databases in that they are designed to support decision making rather than simply efficiently capturing transaction data. Typically, data warehouses contain multiple years of transaction databases stored in the same database. Data warehouses are not updated on a transaction-by-transaction basis. Instead, the entire database is updated periodically. The size of data warehouses can be substantial. A leading bank in US has a 560-Gbyte data warehouse, for example, and MasterCard On-Line is a 1.2- Tbyte database available to member companies for a fee. With all the data accessible in one place, relationships between data elements can be more effectively explored. Users can browse the data or establish queries, though this type of analysis generally results only in knowledge for particular individuals. An alternative approach is to use a process called knowledge discovery to determine whether there is additional knowledge hidden in the data.

Knowledge warehouses

Rather than the kind of quantitative data typical of data warehouses, knowledge warehouses are aimed more at qualitative data. KM systems generate knowledge from a wide range of databases including Lotus Notes databases, data warehouses, work processes, news articles, external databases, Web pages (both internal and external), and people. Thus, knowledge warehouses are likely to be virtual warehouses where the knowledge is dispersed across a number of servers. In some cases, a Web browser can be used as an interface to a relational database. For example, Ford Research and Development uses a browsable Oracle database. The database contains manuals and design rules, specifications, and requirements. Another frequently used corporate application is a human resource knowledge base about employee capabilities and skills. Employee information can include education, specialties, previous experience, and other descriptors.

Historically, Lotus Notes has provided one of the primary tools for storing qualitative and document based information and for facilitating virtual groups. With the recent explosion of the Internet, however low-cost Web-based solutions within intranet environments have become the focus of KM.

Data and knowledge bases

Knowledge can come from top-down activity, work processes, news reports, and a wide range of other sources. Knowledge typically captured to meet top-down requirements includes manuals, directories, and newsletters. Knowledge bases capturing information generated from work processes are likely to include working papers, proposals, and other similar documents.

In addition, knowledge bases can be designed to provide continuity and history in activities like customer support.

“For countries in the vanguard of the world economy, the balance between knowledge and resources has shifted so far towards the former that knowledge has become perhaps the most important factor determining the standard of living - more than land, than tools, than labour.” - World Development Report, 1998

Knowledgeassetsare defined as (Boisot, 1998, p.3}: “stocks of knowledge from which services are expected to flow for a period of time that may be hard to specify in advance.”

Distinction between the three terms - data, information, and knowledge - is relevant for explaining the contrast between physical assets and knowledge assets. Knowledge builds upon information that is extracted from data (Boisot, p. 12). In contrast to data that can be characterized as a property of things, knowledge is a property of agents predisposing them to act in particular circumstances. Information is that subset of the data residing in things that activates an agent through the perceptual or cognitive filters. In contrast to information, knowledge cannot be directly observed. Its existence can only be inferred from actions of agents. Similarly knowledge assets cannot be directly observed in nature - they need to be apprehended indirectly (Boisot, p. 12). Hence, in contrast to the emphasis on tangible input-focused measures of physical assets, knowledge assets require understanding in terms of quality and content of performance outcomes. Boisot (1998) notes that knowledge assets are manifested in terms of technologies, competences and capabilities. Technology is defined a “socio-physical systems configured so as to produce certain specific types of physical effects.” Competence denotes “the organizational and technical skills involved in achieving a certain level of performance in the production of such effects.” Capability is interpreted as “a strategic skill in the application and integration of competences.”

World Bank (2004) emphasizes that the time is opportune for India to make its transition to the knowledge economy. India has ample scope for exploiting the global knowledge revolution and recent advances in technology to boost the productivity of agriculture, industry, and services and to reduce poverty. To get the greatest benefit from this knowledge revolution, India needs to press on with the economic reforms agenda, develop educated skilled workers, create an efficient innovation system and continue to implement the various policy and institutional changes needed to accelerate growth.

Knowledge management lifecycle: (Source - “Knowledge Management” Elias M.Awad and Hassan M. Ghaziri p.24)

  • Capturing : - data entry
  • scanning
  • voice input
  • interviewing
  • brainstorming
  • Organising - cataloguing
  • indexing
  • filtering
  • linking
  • codifying
  • Refining - contextualizing
  • collaborating
  • compacting
  • projecting
  • mining
  • Transfer - Flow
  • Sharing
  • Alert
  • Push

*** ROLE OF TRUST IN KM LIFE CYCLE -

Trust means integrity, consistent communication and proven willingness of the organisation to integrate employees into the decision making process (Source - “Knowledge Management” Elias M.Awad and Hassan M. Ghaziri p.24). The culture of the organisation can play a vital role in building up trust in the organisation.

CHANGE -- This literature review brings out five important points:

1. Organizational culture is crucial for successful KM initiatives. Lack of focus on the cultural issues involved has led to the failure of many KM initiatives.

2. Its quite difficult to create the right kind of organizational culture. Successful organizations dont change their culture altogether for KM, instead, they use practical ways to incorporate it.

3. Communities of Practice are very useful in creating a knowledge sharing culture.

4. The organizations core values trust and the vision and commitment of leadership are crucial for creating the right kind of culture.

5. There is a lack of in-depth studies in the Indian context on this aspect of knowledge management. This provides the justification/rationale for undertaking this research work to fill the gap.

CHAPTER 4:

DATA FINDINGS

The primary data collected from the interviews and questionnaires are discussed in this chapter. Case studies of various companies under consideration are also analysed here as it gives the researcher a better understanding of the current Knowledge Management scenario in India. The past of KM practices in India is also discussed in this chapter to virtually plot the progress line for the knowledge management scenario and to check how far it has reached till now. This study will help to suggest some recommendations to the companies in India. The details about the case studies, questionnaires and interviews are given in the relevant section of the appendices of this report. The comparison of the facts coming across through the data findings can be compared with the concepts cited in the critical literature review to come to a conclusion.

4.1 Case Studies:

Infosys Case study

The first case study considered as a part of research was the case of Infosys Technologies - a global Most Admired Knowledge Enterprise (MAKE). According to the information gained from this case (Refer Appendix A) in 1999, Infosys encountered a problem in their organizational knowledge flows. This was detected while the improvement of their core business processes. The CEO of Infosys was pleased by the success of a 5 year old KM program, but while moving towards the 4th level of KMM (knowledge management maturity) they realised that some strong metrics were missing in order to assess the KM program. He had a lot of pressure from the board of directors asking for the Return on investment reports for KM.

The overview of the history of Infosys can be described as follows. As per the findings from the case, by 2005 Infosys made profits of $688 million and emerged as the 2nd largest firm in India. However when they went to the fortune1000 companies to sell their services, most CIO didn't believe that an Indian company could build IT applications. They didn't take Infosys seriously at the 1st impression. Here was the need of a GDM (global delivery model) in order to achieve the operations like a virtual corporation. (Please refer appendix A for details about GDM). Even though it was quite advantageous but there still a void as regards to knowledge flow as stated by the CEO. There was clear cut knowledge redundancy issues found in the organization. As he proceeded there were cases that knowledge existed somewhere but it was not known where it is.

Learning Organisation:

The scalability strategy would be successful only if knowledge resources were made accessible to every employee. This was stated by the CEO as per the case study. Thus the importance of being a learning organization is explained here.

Need / Necessity of KM:

The CEO believed that scalability demanded efficient capacity utilization. They had to be ready for project opportunities in new functions and technical domains. This gave rise to the initiation of KM program. They formed a steering committee in order to implement KM strategy. Their main intension was “to make Infosys an organization where every action is fully enabled by the power of knowledge where every employee is empowered by the knowledge of every other employee. Thus knowledge sharing was supposed to be incorporated in the company. They revealed that a significant number of requirement were for explicit knowledge such as project documents, client reports, reusable code etc. however the improvement of tacit knowledge flow was kept as the primary goal for long term. Thus KM was now started with the conceptualisation of the KMM - Knowledge Management Maturity model (Please refer Appendix A for details of KMM). To achieve level 2 of KMM the first thing to be done was to increase awareness among the employees so that the initial knowledge capture process is successful. As for KM process to be successful the knowledge capturing and sharing acts as a very good foundation. Thus it was the point to develop the initial technical infrastructure to support KM. the investment was increased in the training by creating a Research and development centre.

The next level was attained to convert the interest into serious involvement. They introduced a new scheme in which users will award quality points called KCU (knowledge currency units). But the officials explained “while the scheme was serving as our initial purpose, it was an imperfect instrument to sustain a long term involvement of employees”.

Resistance to Knowledge Sharing:

The KM executives at Infosys created a Project Learning system (PLS) to which project managers were asked to submit detailed account of their learning from the project. But they faced very strong resistance from them with the reasons like “lack of time” or “project deadlines”. However they knew that the reason behind this was just that the project managers didn't want to share their proprietary knowledge. So this system was scrapped and an existed system Integrated Project Management (IPM) was modified. IPM had a low component of the proprietary knowledge.

Moving towards KMM level 4:

By this time, Infosys was recognised as Asia's Most Admirable Knowledge Enterprise (MAKE) for 2003 and in 2004 was recognised among Globally Most Admirable Knowledge Enterprise. But the board of directors were not very happy with the success as they were waiting to get the ROI (return on investment) for KM program. The main challenge they faced was improvement of tacit knowledge flows. This demanded advanced training programs, which in turn needs further investments in the KM process. The financial report at this point stated that there was a 15% lower defect rate in those projects where good amount of knowledge sharing was done. The project cost also lowered by 13% of the overall project quality. Project leaders reported savings of over 4 man-days per person per year as a direct benefit as a direct benefit of reusing project related knowledge. Their operational efficiency also increased from 2 to 4 percent. (Source: Journal of Information Technology (2007) 22, www.palgrave.com).

Competitive Advantage:

Nandan Nilekani, the CEO of Infosys had the challenge to explain the board on how KM has helped in giving a competitive advantage. He then recollected one project which he gained because the same type of application was already being developed with someone in the organisation. It was being identified what the client was actually looking for. Thus the Infosys got that project because with the help of KM system.

But a question arises that of many projects will he be able to put in front of the board to convince them? Do the board members ever understand the need of KM in an organisation? And above all, do the employees understand the need and necessity of KM in the organization? Well, an attempt to answer these is done in the critical analysis of the report.

- Also discuss tata steel case.

4.2 Interviews:

Face to face interviews were carried out by the researcher in India so as to get the exact information about the current scenario of knowledge management in India. The actual interview notes taken down during the session are given in the appendix. Many companies were visited for the interviews but in order to maintain the flow of the report all of the interviews will not be discussed here. The main interviews according to the researcher were of those companies who are either having a good cultural background for knowledge management, the companies who have applied KM practices and are really successful today, the companies who tried and did not succeed, and also those who have just started with it. Thus these few types will be discussed here. As stated earlier the name of the company will not be mentioned anywhere as the interviewees requested to remain anonymous due to security reasons.

The actual notes taken during the interview can be found in the APPENDIX C. Following is the discussion based on the interviews with KM executives of various companies

Company A

The first company under consideration for discussion was one of the market leaders in field. They had started using and implementing KM practices since a long time and are today successfully running not only in India but they also have their offices in US, UK etc. when asked about their KM practices the CKO answered that they have a intranet based site named “K-Shop”, containing info on project it encompasses Knowledge transition plan which ensures people transferring their knowledge gained in the organisation. Every employee contributes two BoK's which is linked with their appraisal n performance, which is duly scanned by the review committee to prevent violation of intellectual property rights (IPRs). The data collected is separated into two categories: general data: which consists, and WRITE ALL

E-LEARNING: it is an intranet based application also called I-Lite that provides online training material to all employees. It is extensively used by the company to train new employees and develop skills. Learning modules are prepared and tests are organised after a stipulated period of time. At the time of appraisal line managers need to check how many tests have been taken and passed by the employees and decides the learning and training requirements of his sub ordinate in the following year. This is directly related to performance management system.

INDUCTION programs are a training program for the new joiner that is conducted over a period of six days where new candidates are formally introduced to the senior management team. Classroom training is given to the new employees to educate them a bout the organisation, its structure, culture and business goals,

Discussion forums are held where all are encouraged to write down their skills n competencies in different levels.

RADAR is a defect preventive system. When any tip, session or performance is reviewed, all the defects are uploaded in RADAR.

Pride for Quality is a repository of templates, design, document stating the requirements of clients, coding, and standards etc. there is also a system appreciation document which is to be read by the new comers.

Company B

The KM website also known as ICM is reviewed by a committee that uploads reusable components related to knowledge.

LOTUS NOTES SERVER: stores information about new employees and stores them in a database. Knowledge on various topics such as application management, design architecture, domain knowledge is contributes by the employees.

Discussion forums: this company has one of the most modern tools for discussion forum. all employees are given IP phone lines from which they access any other access any other employee in the organisation. On the PC they can view any recorded conference by registration.

Training: customers giving feedback for training of an employee is a unique thing practiced by the company. On the company's global campus site, free training is available for all the employees on the area they need, online books are also available on the site.

Centre of competency (CoC): it's a formal classroom training in which assignmnts are given to the employees on which they are rated.

Database of people: is a new initiative by the company and is useful for accessing those people who have an expertise in a field.

Company I

This is a good example if how KM practices can fail in a company. The KM intranet site for this company is called Channel One which started in 2002, but failed because:

  • There was no ownership of data
  • no dedicated team responsible for KM

a second wave of Km was launched by the company. Middle n top management had identified 90 KM champions who were active, enthusiastic and industrious people in the teams. The KM champions were given the responsibility of creating case studies and putting all the relevant data which could be useful for future reference in a proper format.

The second phase of KM initiatives was analysed on these parameters:

  • Solution provider
  • Reduced time to respond for the company executive to client problem
  • Addressing business needs not the technology needs
  • Improving quality of job

The KM champions were made owners of KM initiative, while the usage of KM is restricted to senior associates only. Every vertical has a separate KM portal where access is restricted to senior business analyst as it contains sensitive informative.

The business analyst who heads the project team delegates the case (write paragraph)

The rejection of materials happens due to Incompleteness, Language, Lack of illustration, or not following standard template.

For junior associates, technology network and discussion forums are available for upgrading skills.

Company K

Idea-logy.com was launched in 2000-01 with the objective to participate in the idea generations in their day to day working for process improvement. Everybody from s worker on shop floor to top management was supposed to contribute. However it failed because no rewards were awarded for idea generated, was voluntary, lacked motivation and had no motivation to current problems at hand.

MI net: daily secondary sales data and stock related information is update don this site accessible to both sales force and head office. It is successful because knowledge is structured, relevant knowledge was available on the net, knowledge about eligibility, ethics and incentive policy was found and it helped new recruits reduce their learning curves.

E lerning portal: an intranet portal whose objective was to create a learning site across depatments. It was used to induct a new person in the organisation but failed because there was no revision, it was driven by IT, older employees were not motivated, no sustenance model was thought of and because no evaluation was ever done.

4.3 Questionnaires:

A questionnaire was designed by the researcher to distribute among the IT professionals in India. The sample copy of an unfilled questionnaire is given in appendix of this report. There were 10 questions asked through the questionnaire. The 1st two questions were based on the information about the respondent designation in the company and work experience counted in number of years of service. Confidentiality was requested by the respondents, so name of the employee or the organization are not mentioned any where throughout the report.

On the basis of the study results it can be fair to state that the knowledge management for IT field in India is on a progress level as 94% of the respondents said that knowledge management practises are formally being carried out in the company they work. Thus the analysis of the responses to the first question shows that in India the IT professionals are fairly aware of the concepts of KM. The next question was a multiple selection type in which the respondent was given few options to choose as their response to what main KM practices are being carried out in the organisation. It is clear from the survey done that majority of companies are using their intranet or web portals for the processing of KM practices. Nearly 78% of the respondents belong to the organization where intranet and web portals are being used. 62% of the respondents go through the KM processes with the help of knowledge repositories in the company. However, the percentage of companies having discussion forums and assignment patterns are 36% and 23% respectively.

Now to find out the awareness of KM in the industry it was important for the researcher to know that how much importance employees give to the KM processes. This was accomplished using the next question in which the respondents were asked to rate the significance of KM in an IT company. The response shows that 61% of the people questioned feel that KM is extremely important whereas remaining 39% feel that it is fairly important. It is really good to see that there is no class of employee who feel that KM is not important or people can work without it as well. The importance of KM alone does not give the reason for it to be so important. When asked about the major achievement of the company with the help of good KM practices 64% of the respondents said that competitive advantage, innovation, good working culture and employee empowerment, all of these can be achieved with the help of good KM practices. The respondents who think that only competitive advantage can be achieved are 21% whereas those voting for Innovation achievement are 24%. Very few people think that KM can be helpful for employee empowerment and for creating a good working culture. The percentages for these were 13% and 10% respectively.

Knowledge Management can not only improve the company's future but it can also help the employees to enhance their career by giving it a good shape for progress. Nearly 85% of the IT executives in India feel that the use of KM processes in their company has helped them to make some progress in their career. 13% are still in a process of deciding whether the KM process has helped them or not career wise. Hardly 2% respondents do not agree that KM processes in their companies have helped them in their career. It shows that the Indian IT sector employees are also counting on KM practices of their company to look forward for the progress in their company.

The maximum usage of the KM processes is done by the junior to mid-level employees of the organization. The researcher feels that the reason behind this would be because they are suppose to follow the KM rules and regulations set by the management (mainly Knowledge officers) people. Thus it is very important that the employees are happy with the KM processes running in the organization. To know the scenario in the Indian IT industry the questionnaire included this option in which the respondents were asked whether they were happy with the current KM processes of their organization. Almost 76% of them say that they were happy with it whereas there were 24% of the survey population who were not happy with the knowledge management practices in their organization.

There were two descriptive type of questions asked in the questionnaire. The first one was to get the contribution of the respondents to KM in the company. The response was really varied. Many employees said that they contributed to the KM process by training their colleagues. Whereas some said that they created a few web blogs or newsletters. Some of the respondents declared that they conducted seminars or presentations in order to contribute to their KM process. A few respondents also said that while coding the program they used such a code that will be reusable in the future for other projects. This was a good case overall as employees were interested in the betterment of the company through KM. But, to the researcher's surprise, none of the respondents said that they contributed in order to encourage innovation in the field of KM. There was no answer that dictated suggestion of new strategies in the organization for knowledge management.

The next descriptive question also gave surprising responses. The respondents were asked if they had any suggestions in order to improve the KM practices in the company. Majority of the respondents suggested that they wanted everyone to be involved in the process of enhancing the company's state with the help of KM. thus; it is fair to conclude that the employees are not happy with the amount of involvement from everyone in the organization. This reflects the fact that there is a resistance to change issue somewhere in the organizations, the details of which shall be discussed in the critical analysis chapter.

CHANGE -- These findings have serious implications for the organizations under study, as well as the industry and the country. The public sector, in particular, needs to take a serious look at its organizational culture in the present time of privatization and liberalization. In this knowledge-driven, services-led global economy, knowledge is the most critical resource and if we are not able to create a culture of knowledge creation, sharing and dissemination, then the competitiveness of our firms, our industry and our country is at stake.

CHAPTER 5:

CRITICAL ANALYSIS

  • KNOWLEDGE MANAGEMENT FOR COMPETITIVE ADVANTAGE
  • INNOVATION WITH KM

(Source:http://www.scribd.com/doc/128856/InnovationImperative-for-Indian-Software-Service-Industry)

CHANGE --

INNOVATION BASED SERVICE PROVIDERS

Innovation in companies is a mix of innovation culture and innovative system. Hence, innovation must envelope everything a firm does that is critical for its continuing survival and growth. Such innovations have to take place not only in product and process breakthrough's but also in host of business, organization and process-related areas that are critical for facilitating product and process innovations. Key management processes of new product development, capital project appraisal and resource allocation need to be carefully redesigned making them conducive to the innovation process within the firm. As the Industry moves in this direction, individual organizations must establish knowledge & innovation management systems that will help them identify and quantify their domain expertise. The systems established must ensure that in areas where significant domain expertise already exists albeit at other organizations, the company can consider options such as licensing to avoid reinventing the wheel. Service providers must look at a new paradigm that encompasses Research & Development, IP Generation & Management, Co-Development & Cross licensing and tie-ups with Manufacturing.

  • KM IN SME AND MNC - A COMPARISION
  • SURVIVAL WITH CULTURE CHANGE

-- CHALLENGES FOR KM

**KM for good ROIs

With the help of km following improvements can be done in the company:

  • decision making is improved
  • better ability to get new partners up to speed up quickly
  • improved morale bcoz employees are making more effective decisions
  • increasing customer loyalty due to better trust in ur employee expertise

(source: managing knowledge, Wayne applehans alden globe greg laugero )

(same source: Hiring people - page 69 )

(Source: http://www.scribd.com/doc/128856/InnovationImperative-for-Indian-Software-Service-Industry)

CHANGE -- Initially India focused on rendering high quality software development services. In order to reduce costs, maintenance and lower-end jobs will move to cost beneficial locations. This will force companies to work at higher technology levels and on significantly more challenging work scenarios. They will need to accept the risks involved in development of technologies, which was not the case some years back. Companies will also need to accept probable failure as a possibility. Although the Services Industry has not traditionally been considered an “Innovation-base”, it must move towards this goal if it must sustain itself in the long run. Software Services companies need to think outside the box and look to ways of contributing their domain expertise into the knowledge pool of the global market leaders in specific technology segments.

India is today the Research & Development choice for MNC's. Around 200 global companies have already set up their Research & Development centres in India. [5]

CHAPTER 6:

RECOMMENDATIONS

ADD THIS IS RECOMMENDATIONS -- Fahey and Prusak (1998) draw attention to a set of pervasive knowledge management errors based on their observing or partaking in over a 100 knowledge projects. After discussing the 11 errors, they suggest three critical set of actions, namely, managers need to continually reflect on knowledge as an organizational phenomenon; they must be obsessive about noting and correcting errors in their stock of knowledge; and must also be vigilant about detecting and correcting errors in their process of knowing-the generating, moving and leveraging of knowledge throughout the firm.

CHAPTER 7:

CONCLUSIONS

CHAPTER 8:

LIMITATION OF STUDY

CHAPTER 9:

REFERENCES AND BIBLOGRAPHY

www.findwhitepapers.com

http://www.managementhelp.org/research/research.htm

1. American Productivity and Quality Centre (APQC) International Benchmarking Clearinghouse. 1999. Creating a Knowledge-Sharing Culture, APQC, Texas. www.apqc.org

2. Ardichvili, A., V. Page and T. Wentling. 2003. .Motivation and Barriers to Participation in Virtual Knowledge-sharing Communities of Practice., Journal of Knowledge Management, Kemptson, 7 (1): 64.78.

3. Bartlett, C.A. and S. Ghosal. 1993. .Beyond the M-form: Toward a Managerial Theory of the Firm., Strategic Management Journal, 14: 23.46.

4. Bontis, N. 1999. .Managing an Organisational Learning System by Aligning Stocks and Flows of Knowledge: An Empirical Examination of Intellectual Capital, Knowledge Management and Business Performance., The University of Western Ontario. Dissertation Abstracts on Disc, ProQuest Searchware, Jan. 1999.Sept. 2000.

5. Brown, S.J. and P. Duguid. 2003. .Balancing Act: How to Capture Knowledge Without Killing it., Harvard Business Review, 81 (3), May.June: 73.80.

6. Bukowitz, R.W. and L.R. Williams. 1999. The Knowledge Management Fieldbook. Hurlow: Pearson Education Ltd.

7. Clark D. (2004) http://www.nwlink.com/~donclark/performance/understanding.html accessed

December 2004

7. Davenport, T.H. and L. Prusak. 1995. Working Knowledge: How Organisations Manage What They Know, pp. IX. Harvard Business School Press, Boston.

8. Denning, S. 1998. .Building Communities of Practice., American Productivity and Quality Council, Texas. www.apqc.org.

9. Drucker, P.F. 1993. Post-Capitalist Society. London: Butterworth-Heinemann. p. 166.

10. Essex, D. 2000. Knowledge Management Programs Pay Big Dividends, ITworld.com, Aug 01. www.itworld. com

11. Fahey, L. and L. Prusak. 1998. .The Eleven Deadliest Sins of Knowledge Management., California Management Review, 40 (3). Spring.

12. Handzic, M. and D. Ahahari. 2004. .Knowledge Sharing Culture: A Case Study., Journal of Information and K


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