What is Knowledge Management? Source, Acquisition, Workers, Strategic Advantage

What is Knowledge Management?

Knowledge is a necessary input in any business scenario. It is gained through understanding and evaluating information. Knowledge helps an organisation in making effective and innovative decisions. To make decisions, the management of an organisation analyses the hidden patterns of information and generates new concepts and principles. For decisions to be effective and rational, the management must have knowledge about the requirements, resources, opportunities and threats to the organisation.

Effective knowledge management is an important factor for the success of an organisation. With adequate knowledge, an organisationcan easily determine the relevant actions to be taken for different situations and explore innovative business practices. As the organisation uses knowledge to gain competitive advantage, it also benefits by sharing and updating its knowledge. Knowledge is not just information processed through information systems; it is the knowledge of all the employees in the organisation.

An employee can share his/her knowledge in the organisation to improve the efficiency of business processes. The organisation must facilitate and manage this flow of knowledge between the management and staff. Most organisations rely on experts and staff to remember knowledge through experience and cognitive learning. They store this knowledge shared by experts to provide support in the future.

A good example of knowledge from experts is Frequently Asked Questions (FAQs). An organisation creates FAQs by using knowledge from experts. The organisation records these FAQs in knowledge network systems to provide answers to knowledge seekers. Knowledge networks are used to store the records of best practices, which can be referred by individuals who want to learn about them.

Dimensions of Knowledge

Knowledge is divided into different areas, which are called the dimensions of knowledge. The significant knowledge for any business has been divided into eight dimensions, as shown in Figure:

Knowledge Culture

A new trend among organisations is to develop a knowledge culture. Organisations are emphasising on creating a knowledge culture because of the increasing requirement and acceptability of knowledge as a significant differentiator in business. Knowledge culture removes organisational bias that restricts knowledge sharing. Knowledge culture involves three primary activities, as shown in Figure:

Let’s discuss each activity as follows:

• Experience Sharing: It refers to the gathering of information from highly experienced employees. This is generally done at the time of their retirement or when they are leaving the organisation. As they have spent a long period in the industry, they are a valuable resource of knowledge.
  
  
• Exploring Knowledge: It refers to access to various knowledge avenues, such as the Internet, and accessibility of the employees to the experience of others so that fresh knowledge can be explored.
  
  
• Sharing Knowledge: It refers to the facility of communication portals and information sharing opportunities among employees. Their ideas and thoughts improve the knowledge base of an organisation.

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Knowledge Management

Knowledge management is the process of improving an organisation’s ability to change, innovate and develop information, data, and facts. An organisation that can quickly gather, process and share knowledge has a natural competitive advantage over its competitors. There are six types of knowledge required by an organisation to achieve a competitive advantage.

These are:

• Declarative Knowledge: It refers to information about facts and concepts.
• Procedural Knowledge: It refers to information that is obtained by following steps.
• Explicit Knowledge: It refers to knowledge that is consciously acquired and understood.
• Tacit Knowledge: It refers to knowledge that is already known to a person.
• Individual Knowledge: It refers to knowledge that is held by an individual.
• Collective Knowledge: It refers to knowledge that is relevant to a particular group.

Shift From Information Age to Knowledge Age

Till the late 1980s, most organisations were living in the information age. They had different systems for different departments, which needed to be coordinated among various system users. If a network database needed to be developed, policies and procedures were formulated regarding the use of data. Organisations felt a need to understand the relationship between data and information. This understanding helped them to identify rules and patterns hidden in that data and information.

Organisations used these patterns and rules to create knowledge by establishing principles and rules of thumb. Managers used to spend more time in creating knowledge. Gradually, expert systems were developed to provide more interactive user support. Later, organisations realised that knowledge was more in the minds of people than in documents. This gave birth to the concept of knowledge management, which aimed at collecting, creating, storing and distributing knowledge in an organisation.

Several organisations implemented knowledge management as a competitive strategy and gained advantage in terms of profit. Today’s business environment belongs to the knowledge age, where knowledge is a major contributor of economic growth. Knowledge based on experience is a more productive resource for an organisation than land, labour, capital and entrepreneur. Therefore, knowledge is considered an asset for an organisation.

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Modes of Knowledge Conversion

The World Bank Institute along with the Hitotsubashi University conducted a research named “The New Dynamism of the Knowledge-Creating Company.” This research indicated that knowledge creation moves through four modes of knowledge conversion. These modes are socialisation, externalisation, combination, and internalisation and are known as SECI for short. Using the SECI modes, the knowledge conversion process is able to create a spiral model. This spiral model amplifies the interaction between tacit and explicit knowledge.

The spiral becomes larger in scale as it moves up the ontological levels which are the individual, group, organisational, and inter-organisational levels. Knowledge created through the SECI process triggers a new spiral of knowledge creation, expanding horizontally and vertically across organisations. This expansion surpasses sectional, departmental, divisional, and even organisational boundaries.

As the spiral expands beyond organisational boundaries, there is interaction of knowledge among universities, suppliers, customers, competitors, local communities, government, and others, which further enhances the knowledge-creating process.

To create a knowledge spiral, various conversions or syntheses are required, including:

• Tacit knowledge and explicit knowledge
  
  
• Levels (individual, group, and organisational) within the company
  
  
• Functions, departments, and divisions within the company
  
  
• Layers (top management, middle manager, and front-line worker) within the company
  
  
• Knowledge inside the company
  
  
• Knowledge outside the company created by suppliers, customers, dealers, local communities, competitors, universities, government, and other stakeholders.

These synthesising capabilities make or break the knowledge-creation process.

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Sources of Knowledge

There can be different sources of knowledge for an organisation, as shown in Figure:

Among these sources, written sources are the most required and trusted sources because they contain less ambiguous information. For unwritten sources, the organisation needs to collect information in the written format so that it is easily understandable. Expert sources are developed because they are not conventional sources. Thus, knowledge managers must discover these sources and explore information from them to develop the knowledge.

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Knowledge Acquisition

The first step in knowledge management is the acquisition of knowledge. The process of knowledge acquisition is also known as knowledge engineering. The people involved in knowledge acquisition are called knowledge engineers. Knowledge engineers adopt different approaches while acquiring knowledge, namely top-to-bottom and bottom-to-top.

• Top-to-bottom: The methods generally followed in knowledge acquisition from the top level to the bottom are as follows:
  
  
  • Interview method: It involves general interviews, personal interviews, object- oriented interviews and structured interviews.
    
    
  • Questionnaire method: It involves answering open-and closed-ended questions.
    
    
  • Group discussion method: It involves a knowledge sharing discussion on some topic. The ideas and thoughts of participants help in knowledge creation.
    
    
• Bottom-to-top: The methods generally followed in knowledge acquisition from the bottom to the top level are as follows:
  
  
  • Observation method: It involves the observation of a process and the performance of employees in the process.
    
    
  • Protocol method: It involves the identification of general formulae while solving any problem in an organisation. This information helps in creating thumb rules used in problem solving.
    
    
  • Expert opinion: It involves an expert or a group of experts to share their ideas and opinions about particular situations or problems. This information also helps in forming the principles of solving those types of problems.

While using these knowledge acquisition methods, knowledge engineers must consider the following aspects:

• Adequate skills are required to select a proper knowledge acquisition method.
  
  
• Although paperwork and documentation are important, they should not consume too much time in the knowledge acquisition process.
  
  
• It is necessary to continuously improve knowledge acquisition methods with the feedback of participants.

Knowledge Base

A knowledge base represents an organised storage of knowledge, with or without the use of a computer. A knowledge base stores knowledge such of rules, principles, theories, best practices, etc. Employees can access this knowledge stored in the knowledge base as and when it is required. A knowledge base helps to improve the efficiency of an organisation.

However, to ensure that the knowledge base is optimally used, organisations must manage it properly and avoid its wastage. An organisation can manage its knowledge base through a computer. Organisations can procure and customise several knowledge-based software to support their knowledge bases. Knowledge management requires an organisation to develop a knowledge base to effectively manage the knowledge in the organisation.

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Knowledge Worker

Knowledge workers are those employees of an organisation whose primary work is to create knowledge. They comprise researchers, scientists and knowledge engineers. Their main qualities include a high educational qualification, judgement ability, logical ability and reasoning ability. Knowledge workers generate knowledge from information and update the knowledge base with the newly explored knowledge.

To support the job of knowledge workers, organisations develop knowledge work systems equipped with advance processing capabilities and graphics. These knowledge work systems (mostly computers) can be used to perform complex calculations and access external databases. With these systems, knowledge workers can quickly locate, access and present complex information.

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Strategic Advantage With Knowledge Management

Knowledge management supports organisations with an easily accessible knowledge base and encourages learning. Learning is the foundation of continuous improvement in processes, which ultimately provides a competitive advantage to the organisation. Every organisation has to adopt a learning strategy so that it can be updated with the changing business environment.

Figure lists these learning strategies:

Let us discuss each strategy in detail in subsequent sections.

Knowledge-Creating Company

As the name suggests, a knowledge-creating company engages itself in continuously creating knowledge. The knowledge is circulated throughout the company for implementation in business operations and decision-making as required. The main objective of a knowledge-creating company is to continuously update the existing knowledge, which in turn creates new knowledge and encourages innovation.

As a knowledge-creating company continuously updates its existing knowledge, it gets better at understanding and predicting business uncertainty in the marketplace. To deal with business uncertainty, the knowledge-creating company emphasises on innovation, which in turn provides it with a competitive advantage. The knowledge-creating company uses knowledge management methods that support the creation, application and distribution of updated knowledge. Examples of knowledge-creating companies include Honda, Cannon and Sharp.

Learning Organisation

A learning organisation believes in continuous learning and improving its business practices and activities through its learning. According to David A. Garvin, “a learning organisation is an organisation skilled at creating, acquiring, and transferring knowledge, and at modifying its behaviour to reflect new knowledge and insights.” A learning organisation adopts a learning approach to development, and it learns through industry experience.

It follows a knowledge management system to create knowledge that guides its future operations. Moreover, a learning organisation adjusts its functions according to what it learns from the market. Strategic decisions in learning organisations are based on market knowledge and learning about market practices.

The main features of a learning organisation are as follows:

• Learning from experts and adopting a systematic approach to problem solving
• Using innovative concepts and approaches
• Learning from concepts and best practice
• Creating knowledge and disseminating it efficiently throughout the organisation

To create a learning organisation, there should be enough opportunity available for its creation. There should also be the desire to create a learning organisation. The next step is the structuring of the organisation and finally the execution and development of the organisation.

Figure shows the process of creating a learning organisation:

In Figure, each step includes the factors that contribute to these steps in the process of creating a learning organisation. For example, in the first step, the internal factors (knowledge accepted for growth, dynamism, and dissatisfaction with the existing structure) and external factors (opportunity of growth in the market and competition in the market) contribute to the emergence of opportunity for the creation of a learning organisation.

Value Chain With KSS

Knowledge management enables an organisation to build a value chain with Knowledge Support Systems (KSS). A value chain is a chain of knowledge management processes adding value as a margin of effective functioning. Each step of the knowledge management process drives the organisation forward towards improvement in its core services.

Figure shows a value chain developed with knowledge management:

According to Figure, an organisation first acquires knowledge in the knowledge management process and develops a knowledge base. The management applies this knowledge in various business processes and decisions. It also receives intelligent support from the knowledge base and attains innovation-making capabilities. Therefore, knowledge acquisition gradually develops a knowledge culture in the organisation.

An organisation can develop KSS to support its management. This knowledge support helps the management in improving customer relationship management, supply chain management and production operations management. These improvements result in overall performance improvement, thus creating a competitive advantage for the organisation.

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Knowledge Management at Infosys Ltd

Infosys Ltd is an Indian multinational corporation that provides various IT-based services, including business consulting, information technology, software engineering and outsourcing services. Headquartered in Bangalore, Infosys is the third-largest IT services company in India in terms of revenue and the fifth largest employer of H-1B visa professionals in the United States.

Infosys provides various knowledge management services including knowledge management process consulting, portals, content management, collaboration and knowledge management applications, document management, enterprise application integration, and security and workflow to various national and international clients. As a process, knowledge management aims at capturing, developing, sharing, and using organisational knowledge to achieve organisational objectives by making the best use of that knowledge.

Knowledge management services by Infosys help its clients to assess their needs, evaluate technologies and recommend solutions in the context of business problems. Today, the knowledge management programme provided by Infosys leads the organisation to be known as one of the Asia’s Most Admired Knowledge Enterprises (MAKE). Infosys has a comprehensive knowledge management infrastructure with a completely dedicated team and fully functional technical infrastructure.

Infosys foresees its future as a knowledge-based organisation with the following characteristics:

• An organisation where every action is enabled by the power of knowledge.
  
  
• An organisation that believes in leveraging knowledge for innovation.
  
  
• An organisation where each employee is supported by the knowledge of other employees.
  
  
• An organisation that is known as a knowledge leader worldwide.

The knowledge management initiative is leading the company towards a “learn once, use anywhere” model. Infosys has built a Knowledge Management Maturity model (KMM) that defines five knowledge maturity levels:

• Default
• Reactive
• Aware
• Convinced
• Sharing

Each maturity level is denoted by a set of key result areas on three essential bases of knowledge management that include people, process, and technology. Infosys has made remarkable progress on all these three cores. A fully functional knowledge management portal works as the central reservoir that consists of all knowledge-sharing activities. This portal also allows for online search and sharing of content that could ultimately provide an integrated access to the corporate intranet.

Today, this knowledge repository, hosts over 75,000 knowledge assets, including empirical documents resulting from different aspects of the company’s business, formal customer deliverables and process-mandated artefacts. Infosys also believes in cultivating a culture of knowledge sharing and reuse as it is more critical than building a technology infrastructure. To accelerate the cultural change at Infosys, the company is paying attention to demonstrating business value of knowledge reuse and developing a system demand for knowledge sharing and reuse.