Aim Of Knowledge Management Business Essay

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CRM is an integration of technologies and business processes used to satisfy the needs of a customer during any given interaction. More specifically, CRM involves acquisitions analysis and use of knowledge about customers in order to sell more goods or services and to do it more efficiently. (Bose, 2002. Pg1)

Customers are now more than ever demanding a different relationship with their supplier, managing a close relationship has become a central aspect in delivering the business goals (Xu, Yen et al, 2002). With the increase in technology available to customers today the world has become a much smaller marketplace and the relationship an ever more important selling aspect (Strategic Direction, 2002). Walton and Xu (2005) explain that CRM is widely regarded as method of retaining and developing customers, through increased loyalty and satisfaction.

A company's product can quickly be compared to another, and many companies are offering very similar products or services to each other. With this in mind the service, quality and relationship experience becomes one of the greatest competitive aspects for a business's survival. Companies are also realizing they can more easily lock in customers by understanding their needs and competing with exceeded expectations, something which CRM systems can help organize (Kale, 2004).

According to Drucker (1996) knowledge is the only meaningful resource and the only real competitive differentiator. Xu and Yen et al (2002) further state that successful companies will use customer information systems to build relationships on the levels that customers want them, and by organizing the information about each customer a singular view can be made of each client throughout the company no matter how many customers they have.

Knowledge management

The aim of knowledge management is the optimal organisation of the knowledge infrastructure in an organisation. As a result an organisation is able to operate flexibly in a turbulent environment without losing sight of its management objectives.

It is probably partially because of the increasing interest in the economic value of 'knowledge' that the problem of knowledge management has quickly become progressively popular on the plans of political figures, plan makers and top management. There are now numerous nationwide and worldwide educational and conferences on the topic. Nowadays 'information' has become an essential new development aspect in the way we think and act in economic conditions. The more we have designed this idea the more we have come to the conclusion that organizations should not become obsessed by the logistics of information. It is just as essential to pay attention to the organisation's proficiency in working with information. The only way of dealing with information overload is to create knowledge. Effective knowledge management then becomes essential for every organisation. Especially when we recognise that nations can only survive in a international economic system by becoming knowledge economies.

Evidence shows that organisations are increasingly paying attention to their systems of knowledge management to ensure that they are capturing, sharing and using productive knowledge within their organisations to enhance learning and improve performance. Indeed, the adoption and implementation of knowledge management practices, whether formal mentoring, rewards for knowledge sharing or systems to capture external knowledge, may be seen as a critical stage for corporations wishing to integrate into an increasingly knowledge-based economy (OECD, 1997).

Knowledge Management has been considered the most important asset of an organization. Furthermore, organizations are now realizing its importance due to its success factors like reuse of past knowledge, experiences and innovations. Knowledge management can be defined as the process of sharing, distributing, organizing, creating, storing and understanding of knowledge about organization policies, processes and products (Dingsoyr and Conradi, 2002). Further, as the size of organization grows it becomes very hard to know each other, share experiences and ideas. Likewise, to find appropriate solutions of the problems and store knowledge for future use, therefore, a proper strategy is needed to store and retain this most important intellectual asset i.e. knowledge of organization. Besides, organizations are also facing difficulties when an expert leaves an organization because the expert knowledge is lost. Therefore they have to hire new people which require more trainings and time, thus there is need to retain and manage effectively expert knowledge to be used in future (Rus and Lindvall, 2002).

Strategic Planning

A strategic plan is an important tool to guide the work of any organisation. It will help maintain a focused, long term vision of the organisation's mission and purpose, and aid decisions about the allocation of human and financial resources (Strategic Planning).

Why is planning so important and why must it be done in line with a strategy? From a macro viewpoint, business these days gets done in an international industry. change is happening at an unprecedented speed. Time and distance keep becoming less and less important thanks to the rapid development of technological innovation and the Internet.

There was a time when strategic planning was done by the biggest organizations, and those who lead change. Now it is a requirement just to survive. Management of companies must be looking forward, expecting change, and creating a way to proactively and efficiently get around through the disturbance created by change.

At a micro perspective, the stage of any company, strategic planning provides a company objective and direction. How are you going to get somewhere if you do not know where you are going? Everyone in a company needs to know what you offer or do, who your target market is, and how you compete. A good technique will stabilize income and productivity initiatives. Without strategic planning, companies drift, and are always responding to the stress of the day. Companies that do not have a strategy have significantly greater prices of failing than those that plan and apply well (Haines, 2000).