Knowledge Management and Learning Organisation

Aner studying this chapter, you should be able to: understand comprehend knowledge management and the different approaches of knowledge to build a knowledge management system

the importance

and application

management

know how to institute knowledge know how to make knowledge understand the challenges

management effective and how to measure its effectiveness and the reasons for its failure culture and what are the benefits of a learning

management

of knowledge

management

know how to build a learning organisation

organisation

with a learning

What the railroad was to the 19th century enterprise, what the assembly line was to the 20th century manufacturing, knowledge is proving to be just that to the 21 st century business. Management guru

Peter F. Drucker2 asserts, 'Knowledge is the only meaningful resource today'. Information and knowledge are playing such a vital role in modem business organisations that the present times are referred to as the 'information age' or 'knowledge economy'. With so many information-based intelligent products available in the market, we are virtually witnessing an information revolution. This knowledge revolution differs from the industrial revolution. The industrial revolution was labour- and capital-intensive, whereas the knowledge revolution is education- and human intelligence-intensive. Before we discuss in detail the concept of knowledge management, it is vital to understand the nuances or distinctiveness of data, information, knowledge and wisdom. Without this fundamental understanding, it may not be appropriate to discuss the domain of knowledge management.

In practice, the terms 'information' and 'knowledge' are often used interchangeably by business writers, but they are significantly different. Information evolves from data which represents an abundant and necessary resource. Data is transformed into information when it is organised in a proper manner. Information means understanding the relationships between data. In other words, when a meaning is attributed to data by associating it with other numbers, things and previous contexts it turns into information. Information becomes knowledge when an individual is able to realise and understand the patterns in information and their implications to draw actionable inferences. As an individual attains the ability to assimilate and synthesise this knowledge for a productive purpose, it leads to wisdom. Wisdom arises only when one can understand the eternal truths among the patterns representing knowledge. Pictorially, the data-to-wisdom transformation has been depicted in Figure 24.1.
Context independence Wisdom /understanding Knowe dge principles I ~nderstanding patterns Information ~nderstanding relations Data--------
/ L

Understanding
__

iiii?

Figure 4.1

Relationship

between Data, Information, Knowledge and Wisdom

)

=__0_.,

Source: Gene Bellinger, Durval Castro and Anthony Mills, http://www.systems-thinking.org/dikw/dikw.htm

It must be kept in mind that a collection of data is not necessarily information; a collection of information does not automatically become knowledge; a collection of knowledge is not always wisdom; and thecollection of wisdom may not always be truth. This is because the whole (i.e. a collection) represents more than the sum of its parts. For instance, a collection of data for which there is no relation between the pieces of data is not information. Whether data would lead to information also depends on the understanding and knowledge of the interpreter and the associations he/she is able to discern within the collection of data. Therefore, we can draw the following inferences about information, knowledge and wisdom.

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Information: It describes or defines perspectives, like what, who, when, where, etc. Knowledge: According to Fred Nickols, Executive Director, Strategic Planning and Management, Educational Testing Service, knowledge refers to a person's state of being with respect to some body of information. This state may be of ignorance, awareness, familiarity, understanding, facility, and so on. Knowledge represents information that is put to productive use through development of strategy, practice, method or approach. It helps guide a practitioner how to do a particular thing. Michael Polanyi3 categorised knowledge into the following two categories: (a) Explicit knowledge: It is referred to as 'formal knowledge', which can be articulated in language and transmitted among individuals. (b) Tacit knowledge: It is referred to as 'informal knowledge', or 'personal knowtedge' rooted in individual experience. Tacit knowledge is often viewed as the real key to getting things done and creating new values. Therefore, there is an emphasis in a 'learning organisation' on internalisation of information (through experience and action) and generation of new knowledge through managed interaction. As knowledge is very distinct from information, it requires a different set of concepts and tools. The distinct characteristics of knowledge and information are presented in Table 24.1.

Knowledge Knowledge is created through understanding sis of information. Knowledge Knowledge Knowledge is the output of thinking. belongs to individuals and communities. moves around in communities. and analy-

Information Information is created through processing already available. Information Information Information Information is the input for thinking. resides in hard and soft form in different media. is static until accessed. relates to data a"d facts. of data that is

Knowing is a human process.

Wisdom: It represents fundamental principles, insights and moral values that are developed on the basis of people's understanding why something should be done or not.

The practice of knowledge management (KM) has been in existence in the past as well. Corporations had some processes to synthesise their experience and integrate it with information acquired from outside sources to create useful knowledge pool for managing organisational operations. But, with the advent of information technology and development of computing power, knowledge management has acquired a very critical role in the growth and survival of business organisations. Experts have defined or interpreted knowledge management in their own ways. Given below are some definitions of knowledge management.

Knowledge Management and Learning Organisation

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Knowledge management is a systematic endeavour for tapping, consolidating and preserving the knowledge that employees bring and add during their tenure. We can also say that knowledge management is a business process through which firms create and use their institutional or collective knowledge. It includes the following three sub-processes4: Organisational knowledge. leanting: The process by which the organisation acquires information and/or

Knowledge production: The process that transforms raw information into knowledge to be made useful for solving business problems. Knowledge distribution: The process that allows employees to access and use the collective knowledge of their organisation. Knowledge management represents both the process of knowledge management as well as the system or infrastructure that enables an organisation implement the knowledge management process. As a system, it includes appropriate IT infrastructure (relational databases, computer networks, sophisticated e-mail system and software), incentive schemes, organisational culture, people and teams involved in knowledge management processes and internal rules that govern these processes. Therefore, knowledge management is a technology and a system that transforms raw information (individuals' experiences and data acquired from external sources) into knowledge that is useful to solve business problems. Andersen Consulting defines knowledge management as the preparation, preservation and exploitation of accumulated business knowledge in a manner that expedites the provision of the right information to the right people at the right time5 S K Palekar6, Senior Vice President, Marketing and Knowledge Management at Eureka Forbes, articulated that 'knowledge management is not just about creating a library or an archive where one has all kinds of information available at the click of a mouse. Instead, it is about ensuring that employees access and use the documented knowledge that is available within the system, to perform better in their day-to-day business dealings along with bringing strategic benefits to the organisation.'

Evolution of Knowledge Management

The discipline of knowledge management has evolved over a period of time. The different phases of its evolution are described below.

Phase 1- Prior to 1980: At the outset, Drucker and Strassmann introduced the importance of information and explicit knowledge as organisational resources. Subsequently, Senge focused on the cultural and systemic dimensions of managing knowlcdge in learning organisation. Everett Rogers' work at Stanford about diffusion of innovation and Thomas Allen's research at MIT in information and technology transfer, in the late 1970s, contributed a lot in developing the understanding about how knowledge is produced, used and diffused within organisations7. The importance of managing knowledge in an organised manner got a boost with the spread of computing technology in business organisations. The computer technology that contributed to generation of huge amount of information started to become part of the solution to manage this information. Doug Engelbart's Augment (for 'augmenting human intelligence'), introduced in 1978, was an early hypertext/groupware application capable of interfacing with other applications and systeJDs.

 Phase II-1980s: By the mid-1980s, the importance of knowledge as a competitive assetw clearly apparent. Rob Acksyn's and Don McCracken's Knowledge Management System(KM an open distributed hypermedia tool, was one of the first major tools in this domain. The 19 witnessed the emergence of knowledge management systems that were developed on the basis artificial intelligence and expert systems. The concepts, like 'knowledge acquisition,' 'knowl engineering,' and 'knowledge-base systems' were also coined during this time. In the year 1989, a consortium of US companies started the Initiative for Managing Knowl Assets to provide a technological base for managing knowledge. The term 'knowledge management' entered the managerial practice and literature when knowledge management-relatedartiel started appearing in journals, like Harvard Business Review, Sloan Management Review,Orgamsational Science, etc. Senge's The Fifth Discipline and Sakaiya's The Knowledge ValueRevolution were among the first books on organisationallearning and knowledge management. In 1989, International Knowledge Management Network (IKMN) was established in Europe. Phase III-Post 1990s: By 1990, leading US, European and Japanese firms had institutedf~ cused knowledge management programmes in their organisations. A good number of management consulting firms also established in-house knowledge management programmes duringthe 1990s The most widely read work on knowledge management, The Knowledge-Creating Company. How Japanese Companies Create the Dynamics of Innovation by Ikujiro Nonaka and Hirotaka Takeuchi, was published in 1995. The Internet also contributed in a big way in spreading awareness about knowledge management during the mid-1990s. In 1994, the International Knowledge Management Network (IKMN) went online and soon the US-based Knowledge Management Forum and other KM-relatedgroups and publications joined it. At present, knowledge management has gained a wide acceptance in business organisations around the world. It is also being viewed as an alternative to failedTQM and business process re-engineering initiatives. Professional organisations working in areas,like benchmarking, risk management and change managc.ment, are exploring a relationship of knowledge management to their areas of special expertise.

Constituents

of Knowledge Management

The domain of knowledge management has emerged from the cross-disciplinary application of a wide range of disciplines and technologies. The constituents of knowledge management are described below. Computer-supported collaborative work (groupware): Groupware technologies, like Lotus Notes, that enable sharing and collaboration of information are extremely vital to organisationa\ knowledge management. They have contributed so much to the discipline of knowledge management that they have almost become synonymous with it. Expert systems, artificial intelligence and knowledge base management systems (KBMS): The learning from these technologies is directly applicable to the domain of knowledge management. Management Sciences: The fundamental knowledge with respect to organising, retrieval and application of knowledge has been provided by the fundamentals enshrined in the discipline of management.

Knowledge Management and Learning Organisation

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Cognitive science: It has provided insight about how we know and learn and has contributed in improving the tools and techniques for acquiring and disseminating the knowledge. Library and information science: The knowledge of the discipline of library and information science that makes libraries work has provided a key conceptual background for the classification and organisation of knowledge. Document management: The document management technology that enables the accessibility and re-usability of the information content plays a key role in knowledge management activities. Decision support systems: Decision support systems enable managers take effective decisions. Considered a key component of knowledge management, these systems are based on insights from the fields of cognitive sciences, management sciences, computer sciences, operations research and systems engineering. Semantic networks: Semantic networks are now used in mainstream professional applications to represent domain knowledge in an explicit way that can be shared. Relational and object databases: Relational and object-oriented databases, used primarily as tools for managing 'structured' data and 'unstructured' content respectively, help in representing and managing knowledge resources. Simulation: 'Simulation' technology also plays a significant role in advanced knowledge management that enables development of projections for the future.

The domain of 'knowledge management' is multifaceted and can be approached and applied from very different perspectives. Different categorisations of and approaches to knowledge management are described below. (a) Karl-Erik Sveiby8's two 'tracks' of knowledge management: It classifies knowledge management into the following two categories: Management of Information: It approaches knowledge as an object that can be identified and handled in information systems . -Management of People. It approaches knowledge as 'a complex set of dynamic skills, know-how, etc., that is constantly changing'. (b) Knowledge Praxis' three-part categorisation: Rebecca O. Barclay, Managing Editor, and Philip C. Murray, Editor-in-Chief, Knowledge Praxis, have categorised knowledge management according to the following three approaches. (i) Mechanistic approach to knowledge management: This approach is characterised by the application oftechnology and resources to do more of the same in a better manner. The main requirements of the mechanistic approach are: Better accessibility to information. Networking techIlology as key solution. Technology and large volume of information to work.

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Although enhanced access to corporate intellectual assets is vital, yet there is no guarantee that access itself will have a substantial impact on the business performance. Unless there is leveraging of cumulative experience, the net result may not be that positive, and not much berter than what it used to be before the application of knowledge management. (ii) Culturallbehaviouristic approach: This approach views the domain of 'knowledge management' as a management issue, and technology is perceived as a tool but not a solution. This approach focuses more on innovation and creativity and aims at creating 'learning organisations'. The assumptions behind this approach are: The processes are more important than the technology. Organisational culture and behaviour of employees need to be changed to effectively implement knowledge management. People are more important and nothing would happen until they accept and make use of the knowledge management system. The cultural and behavioural factors are usually underestimated. The implementation of knowledge management can become more effective when these factors are taken into consideration. (iii) Systematic approach: The systematic approach to knowledge management focuses on the rational analysis of the knowledge problem. Some basic assumptions of this approach are: Focus should be on sustainable results, not on the processes or technology. There is need to model the different aspects of the organisation's knowledge to transform it into an effective resource. Even the cultural issues should also be analysed and tackled systematically. This approach towards knowledge management has been widely adopted by organisations to solve the problems of today's business.

Importance of Knowledge Management

Knowledge management in its present form is gaining increasing importance in the corporate world. It is playing a key role in enhancing an organisation's ability to deal with its purpose, gain a competitive edge, deliver the results and cope with the change. It enables the members of the organisation to not only deal with their current situation but also effectively envision and create their future. This importance is accorded to knowledge management due to the following reasons: Knowledge as Critical Asset: In the present-day business scenario, access to other resources is no longer limited. Capital flows freely across borders, seeking out companies that need it. Technology is available to organisations that cannot develop it for the right price. Raw material is free to be transported across the globe. Information is available to everyone on the digital highways. The most valuable assets of a 20th century company were its production equipment. But the most valuable assets of a 21st century organisation will be its knowledge workers and their productivity9. Knowledge that a corporation gains from years of cumulative experience in manufacturing, engineering and sales, together with information gathered from outside sources, is a critical resource and often called the intellectual capital 10.

Without knowledge management, every situation in an organisation is responded to by the concerned individuals in a manner that they deem fit. Through knowledge management, organisational issues and concerns are responded to by applying the collective learning of everybody in the organisation about a situation of a similar nature. Knowledge as Competitive Advantage: In the knowledge economy, the learning organisation will have better chances of survival and growth. The ability to learn, create, codify and utilise knowledge faster than the rivals and quicker than the environmental changes will provide organisations with a sustainable competitive advantagell. Therefore, Knowledge-driven Manufacturing: Global competition is gradually killing high-cost and lowquality manufacturers and is bringing forward new organisations those are nimble and knowledgedriven. In order to compete and survive in present times, more and more intelligent human intervention is required to extract the maximum from machines. Hence, manufacturing is becoming increasingly knowledge-driven in all aspects for organisations to be competitive in the present-day business scenario 12. Increased Amount of Data in Organisation: The enterprise data is multiplying at a very fast pace. This calls for an effective management of information to transform it into useful knowledge. 'By some estimates, the average knowledge worker spends about one-third of his/her time just looking for information,' says Ashok Chandra, Sr. Vice President at Verity, a developer ofknowledge management products at Sunnyvale, California. Increased Business Opportunity through Knowledge Management: If organisations harness the accumulated knowledge to their full and optimum potential, there can be numerous gains for them in terms of new product development, productivity gains, customer satisfaction, etc. Retaining Know-how within the Organisation: Organisations have understood the fact that they can't stop people from shifting the jobs. But, if they are able to retain the knowledge of their employees within the organisation, they could reduce the extent of damage that is posed by this phenomenon of attrition. Thus, knowledge management makes an attempt to capture the experienCiS of employees on the projects that any company undertakes. The knowl~dge manager and his associates in KM cell at Amarchand Mangaldas, a law firm in Mumbai, interview different employees once a week about the work done during that week. The aggregated information is fed into an IT support system for later usel3. Knowledge-based Economy: Today's economy runs on knowledge and most companies are working diligently and tirelessly to capitalise on the accumulated knowledge. They are using crossfunctional teams, customer- or product-focused business units, quality circles and work groups to capture and spread ideas and knowledge to make their processes more effective and efficient. Increasing Importance of the People Factor: The people who generate, utilise and disseminate information have become an extremely critical resource for business organisations because of the following factors14: The significant source of knowledge for an organisation is its people . Individual knowledge is the starting point for organisational knowledge.

 The knowledge pool of each individual cannot be replicated. Only people can spread knowledge resources across the company. It is only people who can convert knowledge into efficient action. With the migration of people from one organisation to another, this vital asset of the organisation also moves along with them.

Objectives of Knowledge Management

Knowledge management aims to accomplish the following objectives. Sustained individual and business performance through ongoing learning, unlearning and adaptation. Enabling achievement of breakthrough business performance through the synergy of people, processes and technology . Focusing on the management of change, uncertainty and complexity. Giving importance to human sense-making processes underlying decisions, choices and performance. En.abling'smart minds' use 'smart technologies' to leverage strategic opportunities and challenges. Using the knowledge component in the strategy,policy and practice at all levels of the organisation. Establishing a connection between the organisation's intellectual assets and its business results. Enhancing creativity and creating new knowledge value. Leveraging existing knowledge for achieving substantial savings, significant improvements in human performance and competitive advantage.

How to Build a Knowledge Management System

In general, there are two significantly different approaches towards application of knowledge management in the industry15: (a) Bottom-up, Decentralized KM System: The bottom up, decentralised knowledge management system puts more emphasis on people, and the management is involved only in loose coordination of the knowledge management process. As in this system, knowledge is built by the users themselves, it is likely to be more relevant and easy to use. In this system, insufficient information originates from outside the organisation. This system generally makes available the firm's existing wisdom, but it might not be ideal for generating new ideas that lead to breakthroughs. (b) Top-down, Centralised KM System: The top-down, centralised system is built and managed from the top. It is generally based on advanced information technology. In this system, COlmections among people are established through largc central knowledge centres, which synthesise and distribute the organisation's knowledge. The main advantage of centralised systems is that they provide the opportunity for visionary breakthroughs. But their disadvantage, is that they are very expensive and their benefits are very hard to measure. Norn1s, incentives and corporate culture must be explicitly built to encourage people to use the centralised knowledge management system while decentralised systems tend to evolve automatically from the very philosophy of the system.

Process of Implementing

Knowledge Management in an Organisation

The implementation of knowledge management in an organisation is a systematic process that includes the following steps. Step I: Identifying intellectual assets within an organisation and mapping them. Step II: Instituting groupware and intranet technology for provision of access to information. Step III: Generating new knowledge within the organisation for attaining the competitive advantage for the organisation. Step IV: Making the corporate information accessible to employees and other stakeholders and enabling the sharing of best practices.

Even the simplest of the technologies can generate great results when they are implemented by competent, motivated and committed human resources. On the other hand, the greatest of technologies may produce below-average or even poor results if they are applied by incompetent or de-motivated human resources. Therefore, collection of data and its transformation into information is of little use if it is not translated into meaningful decisions and actions for sustained performance. Thus, knowledge management is not as easy as it might appear to be. The employees too busy with their daily operational work may not automatically become a part of the knowledge management system. Organisations need to develop strategies to convince their employees to actively contribute to the generation of knowledge and then utilise it for the enhanced productivity. Some strategies to institute knowledge management in an organisation are described below16. (a) Launching a Portal: In order to collect, integrate and share knowledge, a company can launch an internal portal. As people from different departments and divisions could upload information, this portal integrates various departments to enable organisation-wide exchange of knowledge. (b) Making it User-friendly: Companies should employ such knowledge management tools that are easy to use. If the employees do not possess computers, then the company can link their mobile phones to the system. The employees can send SMSes to dedicated numbers for getting any infor mation. This information could be provided through SMS or callback on their cellphones. (c) Providing Incentives to Emplo)lees to Collect and Use Information: The employees might not always upload or download information from the knowledge management system because of their high-pressured and demanding work. Companies can institute reward points or launch contests to encourage the employees to use the knowledge management system and bring in necessary changes in their attitude and behaviour towards collecting and disseminating the desired information from the knowledge network. For instance, the moment an employee of Eureka Forbes used to log on to the portal, he/she would receive around 20 per cent points. There was five per cent weightage for contribution of ideas into the portal and five per cent weightage for utilisation of ideas. Once the employees accumulate the stipulated points, they become entitled for cash awards.

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Management

(d) Communities of Practice: Communities of practice are groups of people who are informally bound together by shared expertise and passion for a joint enterprise. People in communities of practice share their experiences and knowledge in free-flowing, creative ways that foster new approaches to problems. Some communities meet regularly while others are connected primarily by e-mail networks 17. As the communities of practice can complement the existing structures and radically galvanise knowledge sharing and learning, the companies can facilitate the creation of such communities to encourage their employees to share professional experiences and expertise with one another.

Application of Knowledge Management

Knowledge management can be beneficial for an organisation from multiple perspectives~ Some applications of knowledge management are discussed belowl8: KM as a Motivational Tool: Accumulated knowledge can be used as a tool to motivate the human resources. For example, Eureka Forbes created a literature, 'Eurobiographies', consisting of success stories of the sales force to motivate the sales force to achieve higher targets. Every morning, the company used to send a motivational SMS to its sales force along with a question related to a success story elaborated in 'Eurobiographies'. The question could be: What did the Star Performer' A' do with the performance rewards? The options would range from booking a house to buying a car to spending money on other necessities. As a reward was instituted to be given to a team often people who may have answered the question right, people were encouraged to look into 'Eurobiographies' loaded at the company portal. In evening the company would send the right answer to its employees. These questions and answers motivated some of the employees to excel and perfonn better. I KM as a Sales Tool: The knowledge created through knowledge management system can be utllised to sell more to the customers. The documentation of experiences and strategies with respect to selling the products can be uploaded on the company portal. All employees could derive relevant lessons from these experiences to sell effectively to the potential or existing customers. For instance, Eureka Forbes' scientists constantly study the water contamination levels at different places. One of their findings about higher water contamination in certain areas in Mumbai related to the floods that hit the city. This finding was utili sed by the sales team to sell more effectively in those localities where there was an opportunity to sell. Enhanced Employee Productivity: Organisations that deployed knowledge management observed improvement in employee efficiencies in a short span of time. Improved Decision-making: CRM and other knowledge management tools not only gather information but also create 'views' that can help a manager select exactly the information he or she needs at a glance in order to make faster, intelligent decisionsl9. Exchange of Knowledge among the Employees: The responses and solutions suggested by the employees can be uploaded on the company portal where they can be accessed by other employees.

Knowledge Worker Productivity

The concept of 'knowledge worker' was first provided by Peter Drucker in his 1959 book 'The Landmarks of Tomorrow'. Drucker was among the first to predict that the success of business and economy would shift from the ability of firms to make products to their ability to generate and use knowledge. Drucker pointed out that the productivity of knowledge/service workers is the most important challenge for the management in the 21 st century because it has either remained steady or declined in some cases. Drucker2 (1999) describes the following six major factors determining knowledge worker productivity: 1. To enhance knowledge worker productivity, we must ask the question: 'What is the task?' workers. They

2. The responsibility for productivity should be imposed on individual knowledge need to manage themselves, so they should be provided with adequate autonomy. 3. Continuing workers. innovation has to be an integral part of the job profile and responsibility learning as well as continuous

of knowledge

4. Knowledge work requires continuous knowledge worker. 5. The productivity quality. of the knowledge

teaching on the part of the

worker is not just a matter of the quantity of output but also its

6. For better productivity of the knowledge worker, it is essential that he/she is both seen and treated as an 'asset', not as a 'cost', so that he/she feels encouraged to work for the organisation in preference to all other opportunities.

Role of IT in Knowledge Management

Becoming a knowledge-based company in the present-day business scenario largely depends on having an IT infrastructure that organises knowledge and makes it easy to use and share21. Information technology plays the following roles in the knowledge management system22. It acts as an enabler of the knowledge It can help organisations management system. to draw on the latest thinking of

leverage their knowledge.

The Internet and e-mail have made it possible for professionals theirpeers no matter where they are located.

How to Make Knowledge Management Effective

Knowledge management can be made effective in the organisational lowing measures and strategies. setting by implementing the fol-

1. Integration: Organisations
order to leverage knowledge

need to create an integration for multifarious purposes.

of human and information

systems in .

2. Creating thinkingjorums:

Thinking transforms information into insights and insights into solutions and useful knowledge. Therefore, organisations need to encourage their people to think and not just create heaps of information in databases.

3. Integration with Day-to-Day

semination of knowledge

Operations: The system should focus on the creation and disas well as the organisation. This can

that is important for the employees

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be achieved by integrating the knowledge management system with the day-to-day operations of the organisation and natural flow of work. 4. Creating a Community: Establishment of an effective system for sharing of information among the employees helps create a community of employees who want to be in touch with each other and share information with one another. 5. Empowering the User Community: To leverage knowledge, focus needs to be on the community of users, not the knowledge itself. If an organisation wants to strengthen its knowledge management system, it should provide freedom to the community to decide what they want to share and how to share it. 6. Feeling of Belongingness and Sense of Ownership: The information system should preferably use the community's terms to organise the knowledge. This helps in creating a sense of belongingness among the user community. 7. Manage the Change: A culture change should be approached as a community issue, and the community should be used to bring in the desired change. 8. Using Unstructured Data: The traditional knowledge management targeted only the 'structured data' -the information developed in relational databases. But a large amount of 'unstructured data' is also created in organisations. Organising the unstructured data may not be that easy, but is a very useful source of information.

CHALLENGES OF I<NOWLEDGE MANAGEMENT AND REASONS FOR ITS FAILURE

'Despite aggressive implementations of CRM software for years, CRM is less than 10 per cent implemented across the Fortune 1000 organisations', says Peter McCullage23, Vice President of CRM Strategy for Siebel Systems in San Mateo, California. If this was the scenario with respect to knowledge management in the leading 1000 companies of the world in 2002, then one can imagine the state of affairs with regard to knowledge management in the other organisations throughout the world. Knowledge management is a cultural, technological, infrastructural and operational issue. Therefore, mere creation of an information network does not automatically result in a vibrant knowledge management tool. There are a large number of challenges affecting its successful implementation. Some of them are listed below24. Knowledge management cannot be established by the organisation merely by putting up a large amount of information on its company portal. The information system should be created in accordance with the information that is needed by the professionals. If a group of people don't have sufficient contact and don't already share knowledge, the implementation of information technology is not likely to create it. It can only be achieved by connecting people so that they can think together and utilise the insights and solutions that are created as a result of thinking. Information technology is a tool and enabler and cannot automatically lead to institution of know1edge management. Leveraging knowledge is very hard to achieve. It needs a systemic approach, understanding of needs and development of a strategy.

 Institution of knowledge management usually requires changing the organisational culture. But most knowledge management efforts focus on information systems and treat cultural issues as secondary implementation issues. This approach affects the effective utilisation of information networks and leveraging of knowledge by the employees. Inculcating a desire to share knowledge presents a challenge to traditional companies. Virtual teams need to build a relationship, often through face-to-face meetings, before they can effectively collaborate electronically25. Difficulty in changing people's work habits and encouraging them to take out time to create and share really good and useful information is a significC'.ntchallenge for the application of knowledge management in the organisational context. Madan Mohan Rao, a leading knowledge management consultant at Quality Assurance Institute (QAI), who has authored a book, KM Tools and Techniques, attributes the following reasons for the failure of knowledge management in delivering the desired results: lack of a common IT platform, inertia among the workforce in switching to new knowledge management tools, inadequate training on how to use some of these tools, lack of maintenance and upgradation of the tools, and lack of alignment between the tools and workflow.

Measures of Effectiveness of Knowledge Management System

Companies can create specific measures to know whether their knowledge management systems are delivering the desired results or not. These measures can be divided into four major categories26; . Technology Measures: These measures evaluate whether the right technology is put in place or not. The technology effectiveness can be analysed by measuring the number of emails, number of database queries that are being put by the employees, amount of traffic on the company portal, duration of portal sessions, frequency of usage of online forums, etc. Process Measures: The effectiveness of the knowledge management system can be measured by analysing whether the organisation has adopted the right processes or not. It can be achieved by evaluating the number of knowledge asset queries, number of knowledge assets used, degree of ease in accessing the knowledge assets, number of ideas submitted by the employees, number of best practices created, steps to distribute knowledge, etc. The effectiveness of the process of knowledge management system can also be measured in terms of the degree and extent of collaboration with suppliers and distributors, direct channels of communication with customers, real-time interactions with clients, response times to queries, etc. People Measures: By measuring the number of people who are using the knowledge management system and the extent of their usage, an organisation can determine the effectiveness of its knowledge management system. Business Measures: These measures enable the assessment of the effectiveness of the knowledge management system on the basis of its impact on costs, market share, customer satisfaction, customer loyalty, profitable partnerships, conversion of knowledge into patents and licences, improved productivity, risk management, etc.