Knowledge Management Initiatives For The World Bank Group

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Executive Summary

This report discusses the problems and issues regarding the implementation of a knowledge management system in World Bank. The first part summarizes the case study of identifying the problems whilst second part highlights the techniques which needed to be adopted in order to overcome these problems whilst introducing a knowledge management system with security features and make sure the investment is properly invested. World Bank does projects with long term projects that would entirely reshape a country's future. Different projects need different approaches. Most of the project requires large amounts of capital allocated to be spread over a long term period. Eventually there are two concerns which need to be done Quantitative and Qualitative factors. These are not commercial project to expect a profit value, but they are all community related projects which is done with the main intention to uplift a society so the main concern is whether the money invested in these projects have clearly achieved their targets. The introduction of knowledge management needs to support these objectives, where the report discusses the issues related to introducing knowledge management.

As the above diagram illustrates the knowledge management is a continuous area where the above cycle needs to continue in order to the efficient performance of the organization.

Adopted from [Third Edition Managing Information Systems Managing pg 434]

The Implementation of a Knowledge Management System for the World Bank Group

World Bank Group and the need for a Knowledge Sharing System

World Bank started in June 1946, with an authorized share capital $12 billion US $ to help the world economy with the main intention to promote economy growth, build infrastructure, promote health and education in the developing nations. During the 1970s and 1980s the Bank was criticized as a representative of US, and promoting US policies through the Bank's Policies. These allegations were the first reason for the Bank to initiate a global common Knowledge Management System in order to adopt a common business practice and a bank policy across the world. The first initiative of Knowledge Management was started by Stephen Denning with several other key people and there was continuous research where the Bank normally has spent nearly $50 million US $ between 1997-2000.

The bank funds for so many development projects across the world , but the bank realized these funded projects did not give 100% success as to the geographic location and the delay in the communication process. Most of the decisions were taken in Washington DC where the Head Office and key personnel stay. The bank had its serving organizations across the world but most of the communications were done through post which made the decision process delay. Further the bank had to face immense competition from large private banks , where their conditions to get a loan were slightly relaxed compared to the World Bank conditions.

As the above diagram the World Bank group has the above organization structure for its different missions and business cases. The bank's operations were more and large quantity of data being collected spending large amount of cash. The data collected did not serve the purpose as a result there was a need for knowledge system to streamline the operation.

The Main Aims of Implementing A Knowledge Management System for World Bank and the Issues in implementing them

The Bank wants to achieve the following aims

  • Streamlining the business operation
  • Creating a global community
  • Thematic Groups and Story Telling
  • Facilitating Knowledge Sharing

The bank wishes to achieve the strategic aims through the successful implementation of a knowledge management system; but implementing a knowledge management system has the following related issues.

Defining Knowledge Management

There is no key definition to knowledge management but for understanding purpose knowledge management could be defined as “a set of business processes developed by an organization to create, store, transfer and apply knowledge”.

Streamlining the Business Operation

Basing the above definition the knowledge management helps an organization to acquire data, process into information; storing and transferring whilst assist in decision making.

This was a challenge due to the lack of infrastructure in client countries. The countries which the World Bank operates is mostly developing nations. These nations had a poor standard of living rather than developed countries. As most countries had scarcity for water and electricity building a communication network was a difficult task.

Since there was not enough telecommunication facilities available the bank had to spend on satellite technology, but this did not gain much support from the bank staff as the costs were very high.

Implementing satellite technology did not get approval from the government of these countries due to security reasons especially from Pakistan and India.

The maintenance of satellite systems were another challenge where birds pecked these antenna covers and made nests or the thieves stole the equipment in the remote areas. Further monkeys too destroyed the antenna dishes.

The internal staff too did not much corporate with the bank's new vision because the staff did not want to think outside the paradigm box , where they were telling that there main business is to lend money and investing on knowledge management is not the main co of the business. Further staff did not want to co-operate where they were afraid that they may loose their jobs which was the main reason they did not want to adopt to the change and this caused the anxiety of welcoming the knowledge management system.

Creating a Global Community

Top management did not want to cooperate with any changes where there were frequent differing of opinions, which delayed the implementation process, where the World Bank President Wolgensohn made a public statement in October 1996 that the organization would not be transformed to a Knowledge Organization.

Commercial organizations invested on knowledge management to share business data and client data, but World Bank needs data about each and every country where the bank staff needed information about clients, partners, stake holders.

In order to do this the Bank first started with IBM during 1999 where the Bank first adopted to install ERP and chose SAP as its main vendor. But the bank had to incur high operating costs which was around $12.3 million , where it was higher than satellite bandwith. Later 2002 the Bank introduced the Internet Protocol system which also required a higher initial investment costs.

The bank introducing and adopting new technology was a major concern , but there was no thought about security. Where sharing sensitive information over the Internet for most instance would be tapped or accessed by hackers. this information could be tapped by outsiders. This had a hidden cost of security issues.

Thematic Groups and Story Telling

These were informal groups where people were brought from different field sectors to contribute their ideas and suggestions. It was important for the Bank to get experienced people from the different sectors in order to facilitate the bank employees to gain more knowledge. This was a tough task as people did not express their ideas openly and freely and the other was people though there ideas and suggestions may be not up to the standard.

The main important issue here is where most of the people joined on a voluntary basis and there is a question of how quality the information is. As the information needed to be structured and tagged so that by giving the correct key word the employees could access this information. The question is how far the quality of the information measured, and who measures them. Is there a quality rating given or are there are any internal appraisals for these information supplied by various people and professionals across the world.

Further there is another problem where loosing information, when people stop contributing or get retired. Though the Bank has invested in communication technology it did not fund for any personal to value the quality of these information where as everyone would start contributing there may be a danger of information being overloaded. There is also a hidden question whether the bank staff are matured enough to measure the quality of the information and only consider the relevant ones.

Apart from the information quality as people start contributing information freely some times intruders or attackers will try to overload the server by uploading more information where the server may not be able to handle them this would cause the server to break, thus creating a server attack.

As the cause of the denial of server attack, this could disrupt the whole operation of the bank. As most of the systems are interconnected to one network there may be a danger of the whole world wide operation itself being stagnated and thus losing valuable information. In order to bring the whole function back to normal the firm would need to spend a large amount of money to restore information and get back on track.

Facilitating Knowledge Sharing

To facilitate the knowledge sharing capability the bank introduced the matrix structure during the year 1996. Operations were divided between regions and sectors, where they jointly worked as one unit. Most of the directors were transferred to the operational units , rather than working in the client countries. This action by the world bank is not a sensitive move where if these directors do not understand the country culture how can the organization operate in that particular regional country. Further moving the director from regional country would cause another problem , where the director would be an experienced person who knows about that country well. This will hinder the performance of that client country's office when transferring one key personal. Further the money being allocated to the client country some times would not be fully utilized.

Analysis of the Main Issues at World Bank Group

  • Top Management working as a team and getting the staff support
  • High level cost of technological investment
  • Transferring key regional directors
  • Concerns regarding information securities
  • Maintenance of satellite systems

Top Management working as a team and getting the staff support

Firstly it is important for the top management to appreciate the importance of knowledge management systems and give a supporting hand in order to successfully implement the knowledge management system within the business unit of the bank's operation.

The operational staff needed to be educated about the importance of introducing a knowledge management system and the main reason for introducing is to assist the staff's work. Adequate training needs to be given in order to fill the skills gap in using the system.

High Level of Technological Investment

Investing in technology of introducing knowledge management systems should be given careful thought in order to make sure that they go hand in hand according to the bank's strategy and business case. The bank needs to adopt a step by step approach without entirely introducing across the whole world. Firstly the system needs to be introduced in the developed regions then introducing in developing regions. Further the bank could adopt value form money audits when making large investments in technological projects so that it could have a forecast to verify the financial viability of the project.

Transferring Key Regional Directors

Transferring or removing regional directors is not a wise decision because they only know the cultural background of the country they are operating. If they are removed or transferred or replaced with another director it would take up some time for the new person to learn about that country's system so it is worthwhile to keep a permanent director their so the bank head quarters has more control over that division. The best possible action to take is appoint two directors , where one person would be a national from the regional country and other from another country with more powers so that the bank could maintain more control as the other country director would be unbiased and can control the bank's business operation. Transferring the other country director is a wise operation because he/ she would become multicultural and the know how could be used to the bank's performance.

Concern Regarding Information Securities

Introducing a knowledge management system would not serve the purpose if the information is open to everyone. The bank needs to introduce high level security system like encrypting data so that intruders cannot access the information when passed. Further the bank needs to have a dedicated work system so that they do not access the external system and the risk of information being attack reduces drastically. Each contributor for the new system should need to register and get a username and password so that each and everyone do not gain access only the relevant and genuine people would join the knowledge sharing forum, thus minimizing the denial of service attacks.

More technological staff needed to be trained through the sponsorship of investment programs like science and technological education which would enable the skills to employed trained people from the client countries itself.

Maintenance of satellite systems

Specific security measures needed to be implemented like electron-sing the satellite dishes in order to protect them from thieves and monkeys. The electron -sing system only should be a minimum voltage one so that its only used as a protection mechanism not to hurt anyone only to give a warning and protect the systems. In addition it would be better to employ security personal so the satellite dishes are watched constantly.

Recommendations and Future Courses of Action

The main important factor which needs to be considered would be the cost of implementing a knowledge system and the security issues. World Bank has to segregate its branches across the world and study what types of systems it needs to implement according to the need and relevance. This would enable the bank to do a cost benefit analysis and implement a suitable system relevant to the need of the client country. As mentioned earlier it is better for the bank to adopt a step by step approach in implementing a knowledge system across the world, rather than a radical change. The step by step approach would enable the bank to save money and get the support from the staff from higher level to operational level.

Further the bank has to invest in training staff and It security measures in order to protect the information. Information protection is important where there is large amounts of funds being transferred across the computer networks if these details were tapped it would enable the funds being transferred to wrong accounts. When training and recruiting staff according it is important to consider the seven barriers of knowledge transfer lack of trust, different cultures, vocabularies, frame of reference, lack of time and meeting places, status and rewards going to knowledge owners[Daven and Prusak 1998]. Daven and Prusak further suggest the best way to transfer knowledge would be through conversations, direct lectures and forums. In developing countries it is important to have two trainers one from the main head office and another trainer from the local country which would be enable the knowledge transferring process easier.

Presently with the emergence of e-business and online trading practices the bank could easily benefit from these technological facilities but needs to still adopt a step by step approach when adopting them in developing nations.

The bank has to comply with legal and ethical issues when handling sensitive data, also with copy right issues. In order to successfully use the Knowledge Management System the bank also needs to employ skilled staff in order to operate successfully.


  • Kenneth Laudon, Jane P Laudon Third Edition Managing Information Systems Managing Digital Firm Pearson International Edition
  • Michael Kennedy (2000) Michael Kennedy Accounting and Finance Pearson Custom Publication
  • Knowledge Sharing Initiatives at the World Bank
  • Tacit Dimension Lecture -9 Week 11 Information Management and Social Factors Zuboff and Davenport
  • Chun Wei Choo- Perspectives of Managing Organization - Davenport and Prusak section