whitepaper

Knowledge Process Management—

addresses specific client needs
through customized domain expertise
Raj Kosaraju

The US, the UK, and other Western European countries are facing a shortage of
highly trained and specialized professionals in various knowledge-intensive high-skill
sectors. And, the problem is only expected to worsen.
During the last decade, an increasing number of North American and European
companies have successfully outsourced select Business Process Operations,
allowing them to save on capital and operational expenses. This success in cost
reduction, while improving quality has encouraged many firms to start off-shoring
their high-end knowledge work.
However, as companies evolve, not only do their IT strategies change but their
business processes also evolve in the quest for operational excellence. Such com-
panies will look for vendors who provide an integrated outsourcing model specific
to a particular domain to achieve continuous improvements. It is in this area, that
Knowledge Process Management (KPM) will play a critical role. Knowledge
Process Management (KPM) is a structured set of knowledge, related to
the organizational experience in a given domain or set of domains.

What Is KPO?
Knowledge Process Outsourcing (KPO) is the trend of off shoring high-end knowledge intensive business
processes to low wage destinations that require significant domain expertise. The central theme of KPO
is to create value for the client by providing business expertise.

What Is KPM?
Information Week describes Knowledge Management as “the process of capturing a company’s
collective expertise wherever it resides—in databases, on paper, or in people’s heads—and
distributing it to wherever it can help produce the biggest payoff.”

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whitepaper
Socio-Cultural and
Organizational Components

KPM focuses on and building strengths in specialized

domains such as pharmaceuticals, biotechnology, finance, Creation/
engineering design, etc. Acquisition

KPM builds on KPO, taking process management a

step further. KPM offers the client a completely integrated
solution by using specialized domain expertise.
Application Knowledge Organization/
Storage

What Does KPM Offer Beyond KPO

Domain Experts—Companies are realizing the importance
of having specialized professionals such as accountants, Distribution
scientists, economists etc., spanning various verticals, to
ensure continued quality enhancements. Technologies such
as databases, can store all the data imaginable, but they
cannot store the logic and analytics needed to make sense of
that data. Technology

Identification of Knowledge Gaps—KPM companies utilize

domain experts across multiple verticals, which allow them
to identify pain areas within their specialized industry, through
constant interaction with customers and industry experts.

Knowledge Repository—KPM organizations possess domain Knowledge Assets—Intangibles such as cross platform
experts who build libraries, containing information of present vertical exposures and industry standard quality paradigms
and past projects relating to that area of specialization. This such as Six Sigma are indispensable if a company is to
enables clients to access a rich repository of knowledge that maintain its competitive advantage. Information technologies
would takes years to build. cannot distribute human intelligence. A central repository of
data is useless unless people utilize and access the informa-
Centralized Place for all Project Data—Companies cannot
tion. Even then, the static data loses its relevance unless the
treat project management as isolated, linear plans. Underesti-
right people update and add to the existing knowledge base.
mating the importance of collaboration among all resources,
a centralized project management information site and Supply Chain Management—Domain expertise is the
integrated project components can result in staggering budget differentiating factor in solving supply-chain problems because
overruns. KPM offers a single business management solution you need to understand industry-specific business processes
in one centralized place for all project data. and practices. Organizations want solutions to address their
business problems and they want the people who walk in the
Retention and Reusability of Knowledge—Since all knowl-
door to know their business.
edge is retained in a repository, clients find it easier to work
with a KPM partner when looking for a customized solution, or Knowledge Transfer and Process Diversification—KPM
when implementing an internal solution. enables an organization to align the right people with the right
job, at the right time, at a fraction of a cost.
Continuous Improvement—KPO involves delegating a
specific high-end process or task to a third party. However,
with a KPM partner, the domain experts close the loop
between the client and the vendor by providing recommenda-
tions for improvement, identify debilitating bugs, providing
ideas on architectural improvements, as well as helping the
client foresee future needs, thus allowing the company to
maintain a competitive edge.

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whitepaper
Identify gaps and domain knowledge needs

Discovery of existing domain knowledge

Acquire Create new

domain knowledge Library repository domain knowledge

Store and organization Share domain knowlege

domain knowlege

Use application domain knowledge

The KPM Framework©

KPM Methodology
KPM combines domain expertise across several verticals to create industry-specific knowledge bases
and repositories. This sharing, reuse and retention of knowledge leads to continuous improvement and
expansion of the organization’s products and services as well as accelerated project implementation.

Central to the KPM methodology is the assessment and the process-based knowledge map. These
techniques help organizations identify their strengths, weaknesses, knowledge gaps and critical business
functions. This helps the organization improve resource allocation, while identifying priorities.

KPM Assessment
The KPM assessment evaluates the strengths and weaknesses of an enterprise’s knowledge processes
to create a KPM-driven solution.

The intent of this assessment is to identify opportunities for performance improvements across the enter-
prise. Opportunities for improvement extend across organizational lines and cover managerial, operational,
social, and technological issues that are interrelated.

Through a KPM assessment, an unbiased understanding of the company’s business, vision, strategies,
operation, and strengths and weaknesses are developed.

Two critical components to a KPM assessment are:

• Involvement of key senior resources
• Reuse of corporate assets

The rapid pace of a KPM project and its short duration mandates reuse. Reusable assets (listed here)
expedite the delivery of KPM while minimizing risk.

• Reuse of knowledge assets, such as technical templates, business templates, process templates, and
package software
• Reuse of skills with an industry and a technology focus
• Reuse of process assets, including methodology, task structure and work plans, metrics, techniques
and iterative delivery

How the operational aspects, social systems and technological aspects of KPM are bound together and
leveraged to achieve maximum customer satisfaction is the true focus of KPM.

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Process-Based Knowledge Map

One of the integral tools used within the KPM methodology is the process-based knowledge map, which
is a diagram that visually displays knowledge within the context of a business process. In other words, the
map shows how knowledge should be used within the process and sources of this knowledge.†

Knowledge Inputs Business Process Knowledge Outputs

Tacit knowledge: Tacit knowledge:

individual knowledge = Activity 1 team knowledge =
a best practice from an expert expert advice on performing
Activity 2 a business process activity

Activity 3
Explicit knowledge: Explicit knowledge:
knowledge in a document = Activity 4 report = results of business process
a website article performance

Any type of knowledge that drives the process or results from execution can be mapped. This could include
tacit knowledge (knowledge in people such as expertise, experience, and intuition) and explicit knowledge
(codified knowledge such as that in documents).

The knowledge map becomes the basis for a knowledge management program, a set of knowledge man-
agement activities within a business initiative, or a knowledge management project (such as a community of
practice or a collaborative workspace). Needed competencies can be captured on a knowledge map, which
are used for a competency/ skill development plan.

The mapping technique has several advantages.

• First, the knowledge map represents a simple, clear visual that is easy to understand, update, evolve,
and use. The map becomes a valuable tool during the life of the project.
• Second, the mapping methodology forces participants to identify key knowledge areas that are
strategic and/or critical to their business.
• Third, the analysis of the knowledge map generates ideas that are most suited to the organization and
the business context.†

The Maxil Advantage

Institutions that have spent millions of dollars to attract and retain world-class experts find specific expertise
difficult to locate.

Take the example Cummins Engine Inc., a world leader in providing diesel and natural gas engines for
various applications.

“CARB and EPA have imposed very strict 2007 emission levels on the Heavy Duty diesel industry. We want
to be the first to launch 2007 EPA compliant engines in the market, before Caterpillar or Detroit Diesel. We
utilized all our resources to find engineers who specialize in controls and mechanical design using ProE to
help us make our engine module software 2007 ready, while developing new engine prototypes, but we met
will little success. We started believing that the expertise did not exist. Luckily, we found a vendor in India
with access to a rich pool of engineers and designers who had specific domain experience. Today, most of
our controls software and new engine designs are being developed by our vendor and we are confident of
meeting our deadline.”

†
Source: Deborah Plumley, Process Based Knowledge Mapping, Destinationkm.com

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Added Value of KPM
KPM delivers higher value to organizations that outsource
their domain-based processes, thereby enhancing KPO’s
traditional cost-quality paradigm.
KPM creates value for the client by providing business
expertise combined with process expertise.
Maxil Technologies Solutions Inc. provides KPM consulting
that has a proven record of:
• Transferring and implementing large volumes of work for
clients in multiple specialized domains
• Sustaining major projects sent offshore
• Leveraging experience in an international environment
• Providing clients with zero risk services and solutions

KPM necessitates shifting from simple delivery of ‘standard-

Maxil offers some inherent benefits to the client:
ized processes’ to implementations that demand advanced
• Low investment
analytical and technical skills, as well as critical judgment.
• Low commitment level
KPM enables enterprises to: • Low risk
• reduce design-to-market lead times • Quick start
• manage critical hardware efficiently • Flexible approach
• provide research on markets, competition, products • Quick Implementation
and services • Healthy ROI
• enhance organizational effectiveness in business
administration Companies with their captive units offshore, face major risks
• help in dealing with rapidly evolving business scenarios and drawbacks:
• Large and long-term investment requiring considerable
management time
• Once committed, it’s not easy to withdraw
• Challenges of starting and running an operation in a
foreign country
Domain Expertise
Maxil has invested in establishing dedicated domain groups
for its lines of business:
• Insurance
• Finance
• Healthcare

Maxil understands the importance of a dedicated vertical team

to address a specific business line. For example, our Insur-
Technology client Solutions
ance Domain Group comprises of 15 internationally certified
insurance consultants, each with an average of more than a
decade experience in specific areas of the insurance industry
such as life, property and casualty, reinsurance and broking.

There are five compelling reasons for choosing Maxil as your

KPM partner:
Maxil ekpm© • Intangible assets
• Domain competence
• Scalability
• Bundling of KPO and IT
• Multi-site/Multi-country presence

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The Maxil KPM Value Proposition

Strategic Levels Value Areas Benefits to the client

Domain Knowledge Cost Speed to market

Technology Platform Quality Lower total cost of Ownership
Cultural Alignment Speed Flexibility
Methodology & Tools Reliability Reliable Solutions
Processes Flexibility Competitive Advantage
Reusability Improved Efficiency & Effectiveness
Energy

Maxil KPM Offerings

Maxil’s KPM solutions provide clients with a synergistic combination of deep domain expertise and strong
operational excellence in:
• Knowledge Strategy
• Business Strategy
• Knowledge Mapping
• Practice Communities
• Intellectual Capital and KPM

Summary
Vertical specialization is becoming a market requirement and crucial to market success. More companies
are facing an acute shortage of workers with specialized expertise and deep knowledge in specific
fields. Consequently, KPM consultants, leveraging their experience and capabilities in particular industry
segments, are invaluable.

KPM consultants start with a solid grasp of processes and workflows. Since 70 to 80 percent of a
company’s business rules are representational of all businesses operating within a vertical, your KPM
partner focuses all his energy and time on adding functionality or customization specific to your needs.

The Future of the IT Professional and KPM

The IT professional of the future will adopt to the KPM model. No longer will it be sufficient to say “I work
in IT.” Instead, a new breed of IT professionals will have technical aptitude, local knowledge, industry
expertise and leadership ability.

Gartner predicts that by 2010, six out of ten IT professionals will assume business-facing roles.

The new IT professionals are people whose numerous roles, assignments and experiences enable them
to synthesize knowledge and context to fuel business value. They are applying their skills and experiences
to situations and challenges, while implementing cross-organizational insight to supplement teams and fill
competency gaps.

Your KPM partners with broad insight, deep process knowledge and industry orientated competencies
will help companies incorporate innovation and multiple perspectives into IT-based processes, products,
services and technologies.

The KPM model is fast becoming an integral component of any organizations planning process. Those that
ignore it will do so at their own peril.

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whitepaper

About the Author

Raj Kosaraju, Maxil CIO and Director
Raj Kosaraju brings more than 15 years of experience to
Information Systems consulting and software development.

As co-founder of Maxil Technology Solutions, Inc.,

Mr. Kosaraju serves as CIO and director of this rapidly growing
information technology firm. Additionally, Mr. Kosaraju
works closely with its offshore development partner Ancent
Software International Limited in Pune, India, overseeing
project planning and the software solutions delivery manage-
ment practice. He also was responsible for Maxil undertaking
web development technologies including E learning and
Linux based applications. Additionally, Mr. Kosaraju was
instrumental in setting up Maxil operations in UK, Singapore
and Malaysia.

Prior to joining Maxil Mr. Kosaraju held technical field sales,

logistics and consulting positions at Honda Motor Company,
Sterling Group, Zee Plus Infocorp. UK & GNFC a joint
sector conglomerate company in India with diversified inter-
ests in chemicals, electronics, and automobiles.

Mr. Kosaraju earned his MS in Information Systems

& Management from the Universidad Internacional De Las
Americas in Costa Rica and received his MBA from
Texas A&M University.

© Copyright 2006 Maxil Technology Solutions Inc. All Rights Reserved. www.maxiltechnology.com