The Strategy Framework Of Knowledge Management Commerce Essay

Knowledge Management is a strategy, framework or system designed to help organizations create, capture, analyze, apply, and reuse knowledge to achieve competitive advantage. () A key aspect of Knowledge Management is that knowledge within an organization is treated as a key asset. A simple phrase that encapsulates a core aspect of Knowledge Management is “getting the right knowledge to the right people at the right time in the right format”. () KMS systems deal with information (although Knowledge Management as a discipline may extend beyond the information centric aspect of any system) so they are a class of information system and may build on, or utilize other information sources.

Bharti Airtel was the first one to provide mobile services in the private sector. It also provided internet and telephone services in 92 cities. Bharti Airtel won the award for ‘Best Knowledge Management’ at the MIS Asia IT summit 2006, which reflects the company’s robust efficiency in retaining, aligning and applying the information technology. (Indian television news)

In India the Telecom Industry is very complex. It requires a large number of Service Providers, enough trained Manpower, Local, Regional and Global changing variations and ever changing environment. () This brings many challenges to the company for the consumers which they have to fulfill. KM is not specified to any specific problem and it’s an umbrella which covers all the departments of an organization. ()

Airtel was one of those company’s which realised the importance of knowledge management at an early stage, which helped it grow and value its most important asset. The following provides a study about Airtel and its knowledge management.

Question no.1: BUSINESS OBJECTIVES AND STRATEGIES

Airtel Business Objectives

The company is formed of four strategic business units – Mobile, Digital TV, Enterprise and Telemedia. The former business provides services in India, Sri Lanka and Bangladesh. The Telemedia business offers broadband, IPTV and telephone services in 89 Indian cities. The Digital TV business provides DTH TV services across India (Airtel, 2010).

The objective of Airtel is to provide end-to-end telecom solutions to its corporate customers nationally as well as internationally long distance services to Telco’s.

Airtel has achieved specialization in offering customized solutions to address unique needs and requirements of different industry; IT, education, media, Manufacturing and distribution, telecom, Government and retails etc. (Airtel, 2010).

Due to Airtel’s co-opetion with leading technology companies all around the world and infrastructure, it presents entire range of telecom solutions. These solutions enable corporate to network their offices nationally and worldwide, give them infrastructure to operate important business applications and offer them ways to bond with their consumers and employees (Airtel, 2010).

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PORTER’S GENERIC COMPETITIVE STRATEGIES

Cost Leadership Strategy

Many customers have high expectations for purchasing at lower price, goods and services. A Number of firms engage themselves in activities which allow them to pursue low cost of production than its competitors and results in cost leadership in an industry (Hitt et al., 2009). Airtel has gain cost leadership by managing its processes and resources efficiently and effectively. It has successfully offered its products and services at lower prices by bringing down its operational costs. Due to the profit margins being greater or the increase in sales volume, Airtel has also earned higher profits.

The Cost Leadership Strategies for Airtel works great during a price war in the industry. Due to it’s Low Price Strategy, the firm has acquired profits compared to the competitors (MTNL, Idea, Tata, RCOM), which are bound to make losses (Rediff Moneywiz, 2010).

Focus Strategy

Firm chooses Focus Strategy when they intend to use their core competencies to serve needs of a particular segment of the industry rather than the entire market. This particular segment can be either a particular buyer group, or different segment of a product line, or a different geographic market. This results to customer’s loyalty to the firm and therefore new competitor is resisted to enter in that area (Hitt et al., 2009).

Airtel’s focus strategy is to focus on the customers with the monthly billing of landline more than Rs 10000 (>S$285). Airtel can also offer its service to a specific geographic area.

Differentiation Strategy

A company which adopts Differentiation Strategy needs to have sufficient ability and skills, so that they can differentiate their product from the competitors and influences the customers to pay a premium price. These attributes can be superior product quality, product itself, the delivery system or the market approach. Aim is to create brand loyalty towards customers (Eldring, 2009).

Due to this Strategy, many firms have successfully accessed advanced scientific research, a high level of skilled labour force, and effective customer communication strategies, etc.

Airtel offers free digital EPABX with free leased lines (no connectivity charges). Therefore the firm provides newest EPABX to the customer which costs approx Rs 50,000 (~S$1430). (APPENDIX 1)

Hyper-Competition

Bharti Airtel has been able to achieve dominant leadership position in the market with an RMS of 33% which is well ahead of the closest operator, mainly due to focusing on development of its global portfolio of services and networks. If any competitor wants to be on the top of league, it has to face some of the important factors like increase their international reach, right investments in the global cable systems as well as expansion of international points of presence (PoPs) and interconnects with the international carriers. Airtel just did that (Voice & Data, 2010).

Apart from this, Airtel emphasised on creating direct interconnects and relationships with international operators. It has signed over 400 interconnect agreements till date for these direct interconnects.

Milan Rao, CEO, global voice, Bharti Airtel says, “Despite the hyper-competition in the Indian wholesale market in the last two years, Airtel has emerged as a dominant leader in both NLD and ILD space. With our investments in domestic and international networks, global PoPs, strategic interconnects and state-of-the-art service delivery platforms, we are now poised to extend this leadership to the global market”(Voice & Data, 2010).

The government of India has taken major initiatives to liberalize the NLD and ILD licenses to increase the growth of the IT and BPO services in the country which will lead to more competition and force operators to focus on the QoS. This will cause not only Bharti Airtel, but all the operators to increase their investment to ensure 100% QoS to retain customers (Voice & Data, 2010).

Co-opetition

Co-opetition is the notion of concurrently winning in competition and cooperation within your market. This can effectively increase the broader market for everyone. Small firms can more readily benefit from co-opetition since the agreements can be easy, and small partners can grow faster than the large ones due to laziness and bureaucracy created by size. (APPENDIX 2)

Bharti Airtel has been a regular follower of co-opetition. Few of the many stakeholders of Bharti Airtel are Sony-Ericsson, Nokia and Sing Tel, holding a strategic alliance. This means that Airtel has the access to knowledge and technology from different parts of the telecommunications world. The co-opetition with Google develops the brand, and also gives Promotioning opportunities in India for Google. Now, iPhone will be introduced in India via distributorship of Airtel. Another example of Co-opetition is partnership held with BlackBerry Wireless Solutions.

Bharti Airtel is broadening with another partnership with Vodafone Essar and Idea Cellular to make a brand new sovereign tower firm called Indus Towers (Wireless Federation, 2010). This new venture will take over more than 60% of India’s network towers. Bharti Airtel has also reportedly entered into strategic business alliance with Cisco to assist the growth of Indian enterprises (Airtel, 2010).

In June 2010, the company teamed up with Taiwan-based Smartphone manufacturer HTC Corporation to launch India’s first Android powered mobile phone – the HTC Magic (Airtel, 2010).

Bharti Airtel Ltd. will partner with Ericsson and Huawei to expand and manage its mobile network in Bangladesh (Comm, 2010).

Question no. 2: Current Knowledge Management Strategies

APQC STRATEGY (AMERICAN PRODUCTIVITY AND QUALITY CENTER)

For the purpose of identifying the current IKM strategies into force at Bharti Airtel at the moment we chose the APQC strategy which encompasses a wide range of knowledge management strategies:

This model was proposed by Karl Wigg and APQC collectively to classify the business oriented knowledge management strategies. This encompasses 6 KM strategies which broadly touch every segment of the business.

Customer Focused Knowledge Strategy-

Bharti Airtel in Kampala, Uganda announced to outsource all call centers and back office staff to improve the quality of customer services in Africa. Bharti Airtel which operates the “Zain” brand in 16 countries of Africa picked IBM, Tech Mahindra and Spanco to deliver quality services to customers across these countries. Airtel operates for around 40 million customers in this region and targets for more than 100 million by 2013.(Muhumuza ,2010)

The company believes that this outsourcing would redefine seamless customer experience and would also provide quick, efficient and cheap customer services. Apart from the customer benefit factor this also helps the company to reduce the costs of operations and also develop the skills and competencies of its workforce as they get exposure to global practices and latest technologies.

Knowledge Transfer Strategy-

This strategy believes in the spillover effect, that is employees learn from each other and as well as the organization (Yang, 2010)

To deploy a network in Bangladesh Bharti announced an agreement with Ericsson and Huawei. The agreement includes network design, planning, implementation, project management etc. Ericsson plans to undertake a host of services on behalf of Airtel like expand and upgrade the circuit and the like. This helps in transfer of the knowledge from Ericsson to Airtel in order to improve the operational quality and efficiency. It also helps in the transfer of latest systems and technologies that Ericsson and Huawei deploy at their workplace to Airtel.

Personal Knowledge Asset Responsibility Strategy-

Bharti Airtel supports its employees in a number of ways to help them develop their skill and share knowledge. For the same, they have created numerous platforms like Bharti Learning Systems and Centum Leaning Systems. These systems provide end to end learning and skill development solutions to its staff; it focuses on people and processes and provides a broad range of training facilities like training through Blended Learning Programmes, Executive Coaching, Performance Coaching, Process Management and Certification etc. These systems not only help but encourage the employees to engage in skill building activities and share the knowledge amongst each other. (Sharma, 2010)

Knowledge Strategy as Business Strategy-

In this strategy KM means identifying broad, enterprise-wide business strategies and diffusing them across various locations and networks. (Haggie and Kingston, 2003)

Bharti Airtel’s chief executive Mr. Manoj Kohli states that Airtel focuses mainly on extending its reach. Company aims to encourage its existing users to talk more and also wooed new users by cutting rates. Although average revenue per user went down, the management isn’t worried, instead their objective is to sell minutes and earn healthy margins on them. Airtel expects their revenues to fall as they move to new strata of society every year. The company’s “rural strategy” is vital. Figures show that more than 50% of Airtel’s new subscribers come from rural India. Through this important knowledge management enterprise based strategy of cutting call rates and extending reach, Bharti Airtel efficiently managed to add 100 million subscribers in six months. (N/A, 2008)

Knowledge Creation Strategy-

Any strategy adopted by an organisation where innovation or creation of knowledge takes place in order to ultimately achieve their business objectives is a knowledge creation strategy. (Haggie and Kingston, 2003)

The Six Sigma initiative at Airtel is an important component of the company’s innovation strategy. The Six Sigma was adopted in order to achieve sustainable competitive advantage. Keeping in mind “replication of best practices takes much lesser time than implementation”, Bharti Airtel conducted many knowledge sharing sessions where all Six Sigma practices in the internal system of the organisation through emails and intranet. The best practice implementers also shared their success stories. (Shukla and Srinivasan, 2007)

Intellectual Asset Management Strategy-

A companies KM strategy where they make use of assets already in the company to create or transfer knowledge or just for knowledge management is their intellectual asset management strategy. (Haggie and Kingston, 2003)

Bharti Airtel creates strategies to make it critical for all employees to engage in KM activities. Bharti makes use of their employees as assets to create, share, replicate and to institutionalise KM. They have target to have 40% employee involvement in all directly customer- related processes within a year and double in 2 years. Bharti also has a knowledge- dollar (K$) scheme in which employees earn K$ each time they share knowledge or everytime they replicate or even apply knowledge shared by others. This scheme acts as a motivator and at the same time becomes a KM strategy where knowledge is getting created, replicated and applied by using assets that company already has. (Hariharan, 2005)

How do these strategies help attain business objectives

These strategies may be classified as above, but when closely seen in real practice they all are interlinked. Any strategy adopted by the organisation helps fulfil not only one but several other purposes too, e.g.: call centre outsourcing not only cuts costs but improves the customer services and help employee development.

The main business objective is to expand the network of Bharti Airtel and make it widespread, which actually is being attained by the above mentioned strategies. It improves its customer services in every strategy so as to improve and retain its customer base which is very evident from the above explanation. It trains and develops its employees’ potential at every possible level so as to improve their efficiency, productivity and inturn customer service, and finally network expansion.

In an industry where Bharti Airtel is competing with former monopolies like BSNL and MTNL, they realised that competition cannot not be sustained with price and technology only. Through in depth research they realised that the only source of competitive advantage for a telecommunication company was quality of service and hence they began the implementation of Six Sigma. They found out that Six Sigma provided them a more analytical measure in terms of accurate statistical tools, constant supervision and tracking of different parameters, and clear measurements of non-¬nancial parameters. By adopting Six Sigma, Airtel aimed at achieving competitive advantage by proving error- free service, but again ultimately targeting customer satisfaction. (Shukla and Srinivasan, 2007)

Question no. 3: Challenges Faced by Bharti Airtel

BUSINESS CHALLENGES

Business challenges force an organization to stay one step ahead of the competitiors, develop new strategies to stand out in the crowd in the ever changing marketplace.

Competitors

With the telecom boom in India, Airtel has a lot of competitors in the market. More and more telecom companies are being set up. With the telecom spectrum up for sale, India has seen many companies venture into the telecom sector. As a result, Airtel has been losing ground slowly but steadily. The government owned Bharat Shanchar Nigam Limited (BSNL) is Airtel’s major competitor, be it in terms of infrastructure, pricing, etc.

Pricing

Competitors have given stiff competition to Airtel in terms of pricing. Many of Airtel’s plans are priced more than its competitors, which is resulting in Airtel losing its market share to its competitors. BSNL, having great infrastructural advantage, has got the lowest call rates across India.

Staff retention

Many employees of Airtel leave within 2years of joining. As such Airtel doesn’t have a stable employee force (at the lowest level of the hierarchy)

Adaptation

Whenever there is a change in technology, of a shift in price, Airtel takes its own time to adapt to it. For example, recently, Vodafone and idea cellular slashed their roaming rates by almost 50 %.

Airtel nearly two months to revise its roaming plans. Meanwhile many customers of Airtel had already shifted to the other operators.

Customer loyalty

With so much of advertisement, Airtel has not been able to capture much of its competitor’s customers. May advertisement campaigns were targeted at the youth and very little attention is given to the rest of the segments.

The old strata of the society have remained loyal to BSNL for various reasons.

KNOWLEDGE MANAGEMENT CHALLENGES

Organizations need to define knowledge in specific context and content. It is necessary to distinguish between data and information on one hand and knowledge on the other.

Managing knowledge is very crucial for any organization, if knowledge is not utilized properly, it will be undervalued, which will refrain the organization from outbeating the competition.

Airtel is one of those companies which realized the value of knowledge management at an early stage and has taken many steps to further it. The challenges faced in this due course are:

Aligning KM with Organizational Goals:

The link between KM and business is sometimes absent or only implicit in the planning stage. In the ever changing business environment, it is very important that knowledge management keeps a pace with the changing organizational objectives and help it go ahead rather than stagnating it.

The KM managers at Airtel must ensure that the issue of linking KM to business results is addressed by determining the purpose of KM. They should measure the performance by all means so as to make sure that the KM strategies implemented are serving the purpose and taking the business towards a desired direction.

Application of KM Models in real practice:

Despite of the fact, that bharti Airtel has separate platforms like Bharti learning systems and Centum learning systems for putting knowledge management concept into practice, it is clearly visible that there is a lot of gap between the aim and the actual practice. The employees find it difficult to put the acquired knowledge management tacts into use. It creates a confusion between the business and knowledge management strategies and thus, the whole purpose of KM is lost.

The company should make sure that each individual in the company can differentiate between a business and a KM strategy, for this, the company should include demonstration of the application of KM strategies, may be through on the Job training methods.

E.g. Airtel has also facing a new challenge from its competitors and has lack of managing the knowledge and technology can be seen when its competitors have launched 3G, Airtel has failed to utilize its resources effectively.

3. Non Awareness of the concept Knowledge Management

Persuading knowledge workers to create, share and apply knowledge is a very challenging task in airtel. This concept is very new to the employees in the organization so it will take some time for the employees to get used to it.

Mere deployment of technologies at appropriate places is not enough, a good area of research then, is to redesign the knowledge work processes or modify them so that they channel the flow of knowledge in the right direction. Airtel should have some experts in the field of knowledge management so that they can stimulate people in organization to create, share or apply knowledge.

4. Competition within the organization leads to failure of KM strategies

Internal Competition within the employees of the organization leads to failure of knowledge management strategies such as knowledge transfer, the employees do not want to share information or skills with each other in order to have an edge over one another. Sometimes, they don’t share information because of lack of trust or time too. This leads to stagnant knowledge which ultimately is of no use since the company runs as a team and not by an individual. (APPENDIX 3)

Question no. 4: Recommendations for using KM to meet these challenges

Competitors

Airtel in order to move ahead of its Competitors must start Owning its Towers ,so that they can not only provide Wide Coverage Nationally but also bring down their Costs and have advantage over their Competitors. The KM Team needs to Survey and find out the Markets where their Customer Base is Strong and recommend to the Management to have their ” Own Towers ” in those Locations to give Customer the Best Service to stay ahead of Competition. (Airtel annual report 2009)

Pricing

Airtel in Order to become a Global Leader must have a Competitive Pricing Policy in place to move ahead of Competition. They need to be abreast with the Plans / Offers offered by Competition . They should not wait for Competition to announce their Offer and Slash Prices based on their Offers. Through use of Knowledge Management , they should follow the Module of Earning per Minute instead of Earnings per Customer and by which they can arrive at their Costs and accordingly Price their Products lower than their Competitors.(www.airtel.com)

Staff Retention

Airtel were one of the Pioneers in Mobile Telephony. When they started they had no Dearth of Talent ,as they were one of the first market players. They could mould their Employees the the Airtel way. As more players started emerging in the Market the Demand for their Staff increased . All new players wanted to understand the Airtel Mantra and started poaching Airtel Employees. Inorder to maintain a Higher Retention Rate ,the Knowledge Management Team should have Strong Work Ethics inculcated in their Employees, Good Soft Skills Training to the Key Personnel . The Best way to have Higher Staff Retention was by having the HIGHEST SALARY in the Industry, so that Competition cannot afford them anymore.(www. knowldege business.com)

4. Linking Knowledge Management to Business Objectives

Airtel needs to increase Customer Satisfaction and provide a consistent Good Customer Experience. The Number of Customers which Airtel is catering is very high so, they also need to have the Infrastructure to Cater to their Large Base Of Customers. The KM team at Airtel should conduct a detailed discussion with their functional heads on their Vision of Customer Satisfaction and Customer Experience’s. These detailed discussions will lead them to establish a few vital parameters, which can be derived from Critical Customer-Impacting Business Processes. The aim should be a reduction in performance variation across regions, we should hope to achieve by quickly replicating best practices. Replication of proven good practices from within or outside the organization is always faster than starting from scratch.

Capturing, Sharing and Replicating will also ensure the Institutionalization of best practices: Individual Knowledge can be converted into Organizational Knowledge, which can be re-used at later stage. Naturally, this will also reduce the Organization depending on particular Individual Employee.

Aggressive Advertisement

Airtel should focus on their advertisement in a specific way through KM,while targeting the consumer they should be very specific which segment of the consumer they want to target, the current market target of Airtel is Generic in nature, which does not clearly speak whom are they targeting. They should be specific to Gender and most important Age. Their competitor Vodaphone have done very well in last few years because they have targeted the young crowd in the market which has given them wonderful results. When targeting a Younger Audience their Advertisement should be Young in Nature so that the Particular Age Group is able to relate themselves to the Advertisement.

6. More Impetus on Research and Development

Airtel is well renowned Telecommunication Company in India, and should constantly endeavour to do more Market Research to Update their Technologies, Promotion, Targeting consumer in the market. Airtel is spending relatively low in R&D when compared to its competitors which itself is a big setback for them, even though Airtel is the Market Leader in most of the Circles they are present in.

7. Cohesive and Coordinated Approach to Decentralization

Implementation of Billing and Order Management Systems and High-Quality Customer Service was a relatively straightforward element of the solution. While the Comverse Kenan systems were in place to run Airtel’s entire business using a Two-Instances Billing and order Management platform for Postpaid and Wireline Business, De-Centralization made the Operations and Optimization – of these System more Challenging.

Under India regulation, each circle was essentially a separate Business Entity with Distinct Business Owners, thus opening the door for Competing, and/or Redundant Processes. To support this De-Centralized Organization, Airtel needs to deploy a Cohesive and Coordinated approach to Operating its Systems. Another challenge is to ensure the Operator’s Longer-Term Self-Sufficiency by building a model that would not rely on Third Parties for Support. (Comverse-making network stronger)

CONCLUSION

Information knowledge Management System is the Backbone of an Organization. It must be integrated with all the Departments, so that the knowledge can be transferred between the employees and from External Sources like Third Party and Rest of the World. More investments can be made in the Research and Development to develop New Technology and products as per the needs of the customers. New technology can be implemented in the existing products to efficiently cut cost than developing new products.The Billing Software needs to be improved from time to time to make it Consumer Friendly and also at the moment Each Circle is a Different Entity and when Government of India decides to merge all the Circles as one, the Software should be available to implement the same.

New Software should also address to minimise the Number of Billing Cycles for the Consumer within various Circles. The proposed Information Knowledge Management tools can benefit the organization. Trust can be developed from the Customers and Employees if they satisfy the needs of the Customers. Consumers are focusing more on Customer delight then just Customer Service in the Present Day and Age. Its very important to make them feel special, when it comes to Telecommunication Industry. It is the right time for Airtel to make a move and make their CRM stronger. The Professional Services Team must meet all the Challenges and Goals by flexibly addressing Unique Operator needs. The implemented services facilitate Revenue Growth and build loyalty by providing users with Choice, Convenience and Control. The Sales and Marketing Teams need to Develop Strategies to significantly improve Airtel’s competitive advantage at little to no additional cost by using tools such as Rate Plans, Discounts, Payments, and Revenue. All this will create Loyalty among Consumers for Airtel with Choice, Convinience and Control.

APPENDICES

APENDIX 1

APPENDIX 2

APPENDIX 3

(Source: Managing knowledge in project-based organizations: A cultural perspective  By Mian M. Ajmal)