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Knowledge Management


Presented by Brad L. Hershberger, Itthipat Limmaneerak, M.Faisal Fariduddin A. Nasution, Melanie Swearengin, & Scott Shaw Knowledge Management Trends Survey of 423 ... – PowerPoint PPT presentation

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Title: Knowledge Management

Knowledge Management
  • Presented by
  • Brad L. Hershberger, Itthipat Limmaneerak,
    M.Faisal Fariduddin A. Nasution, Melanie
    Swearengin, Scott Shaw

Knowledge Management Trends
  • Survey of 423 organizations in the UK, Europe,
    and the US found
  • 64 had KM strategy in place
  • 81 had KM, or were considering, a KM program
  • 75 believed KM can play a significant role in
    improving competitive advantage.
  • (KPMG Consulting)

Source Reference 1
Knowledge Management Trends
  • Overall worldwide spending on KM has been
    estimated to increase from approximately 3.1
    billion in 2000 to over 12 billion by 2004.
  • Document and Knowledge Management After-Hype
    KM Enters Critical Phase.

Source Reference 2
What is Knowledge Management?
  • What is knowledge?

Knowledge Hierarchy
What are data?
  • Data are a set of discrete, objective facts about
  • Data are facts, numbers or individual entities
    without context or purpose.
  • Example A company has total sales of five
    billion dollars in Q3 of the year 2003.

Source Reference 2 and 3
What is information?
  • Information is data that has been added value
    through context, categorization, calculation,
    corrections, and condensation.
  • Information has an impact on a users judgment
    and behavior ( to aid decision making).
  • Example Five billion dollars in Q3 of this year
    are 10 increasing in sales revenues in Q3 of
    last year.

Source Reference 2 and 3
What is knowledge?
  • Knowledge is the fact or condition of knowing
    something with familiarity gained through
    experience or association.
  • Knowledge is the human capacity (potential
    actual ability) to take effective action in
    varied and uncertain situations.
  • Example To gain higher growth rate in sales
    revenue, a company not only focuses on the
    domestic market, but also looks for the exporting

Source http//
and Reference 3
What is difference between information and
  • Knowledge life cycle

Knowledge Life Cycle (in business)
It must be created either within or outside the
The user will learn what worked well and not so
well as a result of applying the knowledge gained
It can be stored in somewhere
Those who need the specific knowledge must find
out where it is, when they need it
The knowledge can be put to use towards some
productive purpose
the user will then go through the act of actually
When does information become knowledge?
  • Without the learning component, the cycle becomes
    an information delivery strategy.
  • The concept of learning is a key contributor

Types of Knowledge
  • It is also important to know and distinguish
    between the two kinds of knowledge that must be
    addressed in organizations

Tacit Explicit Knowledge
Tacit Knowledge Defined
  • We know more than we can tell
  • Something that we know when no one asks us,
    but no longer know when we are supposed to give
    an account of it, is something that we need to
    remind ourselves of
  • All knowledge (is) personal and all knowing
    (is) action

Source Reference 6, 7 and 8
Tacit Knowledge Explained
  • Can you calculate the arc, velocity and energy
    needed to successfully make a free-throw?
  • Explain to someone the mathematical formula for
    riding a bike.
  • Why does your favorite recipe, cooked by your
    grandmother, never seem to turn out the way you

Whats wrong with tacit knowledge?
  • Tacit knowledge posses difficulties in
    Knowledge Management for 3 main reasons
  • We are not fully aware of having it
  • There is no personal need to make it explicit
  • There is a risk of losing power and competitive

Source Reference 9
Explicit Knowledge Defined
  • Explicit knowledge uses a different part of the
    brain than tacit knowledge
  • Explicit knowledge can be codified and explained
  • Explicit knowledge can be separated from the

Source Reference 10
Examples of Explicit Knowledge
  • Documentation
  • Procedures
  • Mathematical Formulas
  • Intranets
  • Information Explicit Knowledge

Whats wrong with explicit knowledge?
  • Instead of storing information in our brains, we
    design our environments to make it easy to find
    the information we need
  • Explicit knowledge is devoid of action and our
    knowledge is in our action
  • The narrative in itself is not enough for the
    other part to gain a complete understanding

Source Reference 11, 12 and 13
Knowledge Management (useful definition)
  • The systematic process of creating, maintaining
    and nurturing an organization to make the best
    use of knowledge to create business value and
    generate competitive advantage.

Source Reference 6 and 7
Interesting KM Statistics
  • Who is pushing hardest
  • The benefits achieved
  • Use of technology to manage information

Methodology KM Research Report 2000 by KMPG
Respondents Actual
USA 101 24
UK 100 24
Germany 83 20
France 77 18
Netherlands 15 3
Scandinavia 15 3
Elsewhere (Italy, Spain) 32 8
Total 423 100
Source Reference 1
Who is pushing hardest?
  • This indicates that the leaders of organizations
    understand the significance of KM and are driving
    their organizations KM initiative

Source Reference 1
The Benefits Achieved
  • The most significant benefits achieved included
    better decision making (71), faster response to
    key business issues (68) and better customer
    handling (64).

Source Reference 1
Use of technology to implement KM
  • Internet (93) and intranet (78) are favored
    technology used in accessing data
  • Data warehousing and mining techniques are
    favored technology used in analyzing data

Source Reference 1
KM in E-Business
The Transition
  • Reason ? The disconnect between IT expenditures
    and the firms organizational performance.
  • Transitions made
  • Transition from information processing to
    knowledge creation.
  • Transition from Total Quality Management to
    Business Process Reengineering.

Source Reference 4
The Transition
  • Old World
  • Phases
  • Automation.
  • Rationalization of procedures.
  • Reengineering.
  • What is the new world
  • of e-business?

Source Reference 4
The Transition
Source Reference 4
KM in E-Business Strategy
  • Transition ? paradigm shifts
  • Paradigm shift in business strategy.
  • Paradigm shift in design and use of technology.
  • Paradigm shift in the role of senior management.
  • Paradigm shift in organizational knowledge
  • Paradigm shift in economics of organizational
  • Paradigm shift in organizational design.

Source Reference 4
KM E-Business Strategy
  • Using intranet ? should be viewed as a KM
    environment with perspectives such as
  • Information perspective
  • Awareness perspective
  • Communication perspective

Source Reference 5
Case Study
  • BioTechnology research and manufacturing company
  • 5450 employees in 130 countries (Main
    headquarters in LaBalme, France. NA headquarters
    in Durham, NC.)
  • 63 different manufactured products in 4 different
    disciplines (Bacteriology, Hemostatsis,
    Immunoassays, Molecular Biology)

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Case Study
Company Profile

  • Employees -145,000 employees
  • Products -Audit Tax Consulting
  • Customers -SEC, Fortune 500
  • CIO reports to committee of partners
  • Over 400 IS professionals (25) on the SALT side.

Source Reference14
Merger - 1998
  • Price Waterhouse and Coopers Lybrand
  • Combined six lines of business across 24
    industries in over 152 countries worldwide with
    over 150,000 employees
  • Different IT platforms
  • Thousands of servers with various information

Source Reference 14
Goals for Merger
  • Meet Increasing Client Needs
  • Expand Globally with Clients
  • Establish a Global Knowledge Base (Intellectual
  • Expand Range of Services
  • Become More Technology Oriented
  • Grow Revenue
  • Dominate Market

Source Reference 14
Building the Knowledge Base
  • To a great extent it is all we have and all we
    share and sell. It is the basis of what we do.
    We sell to clients the knowledge our consultants
    have and have access to. So managing the
    resources effectively and making sure we can
    share it across the consultancy is vital to us.
    It is the lifeblood of the organization
  • -Julia Collins, Head of PwC Global Knowledge

Source Reference 14
Issues and Challenges of Building the New PwC
KM Tool
  • Each line of business at the old companies only
    had access to their knowledge.
  • Differences in IT systems and organizations
  • E-mail networking and Intranet using Lotus Notes
  • Integration of databases and servers
  • Eliminate the senior executives from controlling
    access to information

Final Results and Successes
  • IT staff worked on a region basis instead of
    local office
  • Choose consistent information language (SQL,
    Novell, etc.)
  • Combined databases and choose individuals to
    update them
  • Linked e-mail and lotus notes for a strong
    internal communication system
  • Creation of a global wide area network to link
    wide area networks of PW CL

Knowledge Management enable the efficient
prioritisation, creation, retrieval and leverage
of relevant content that
What is KM to Me?
  • Builds and strengthens our client relationships
  • Supports the professional development and
    productivity of our people
  • Facilitates the development of innovative,
    quick-to-market solutions
  • Fosters a continuous learning culture

PwCs Knowledge Management Tool (TALK)
How Do I Use PwCs KM?
  • What is TALK?
  • Tax and Legal Knowledge
  • A collection of resources, both internal and
  • A source for new developments, products and
    applications, research, publications, bulletins
    and discussion forums.
  • A complete archive of old information

TALK Facts Stats --1,000 databases --1,780
websites -- 62 countries
TALK U.S. Homepage
Knowledge Management divided into External
Internal sources
External Sources
  • BNA
  • WestLaw
  • CCH
  • Self study tutorials/reference guides
  • In-house training classes
  • Electives offered at major training conferences

External Sources
Internal Sources
  • WNTS
  • WNTS tax developments communicates legislative
    and technical tax developments to the U.S. tax
    practice through WNTS Alerts and Spotlights.
  • Info Source
  • Worldwide Tax Summaries
  • 123 countries
  • Corporate Taxes
  • Individual Taxes
  • Tax References Files
  • Technical documents Practice Tools
  • Speeches Presentations PwC Authored Articles

Internal Source
  • Incentives to contribute
  • Certain mandates to contribute when working on
    certain projects

Tax Daily News
  • Content Daily electronic US Tax newsletter
    including leadership announcements and a summary
    of TALK contributions
  • Mailed daily to each tax professional

Tax Yellow Pages
  • What is it?
  • Online, annually updated, directory of US Tax
    professionals and their principal areas of
  • What does it do?
  • Reduce the time spent by professionals locating
    people and expertise across the US Tax practice.
  • Issues Addressed
  • Clients want to contact PwC professionals with
    specialized experience PwC partners need to
    dialogue with peers whose competence they trust
    PwC staff need information on who works in area
    and how to contact them.

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Case Study
Company History
  • Founded by Dr. Stanley Buckman in 1945
  • 5 employees Initial customers were large paper
  • Customer base expanded
  • leather, paint, sugar processing, agriculture,
    plastics industries and water treatment
  • 1978 Sales 29 million 493 employees 20
    companies worldwide 8 manufacturing plants over
    1,000 specialty chemicals in their product line
  • New Leadership1978 Bob Buckman became chairman
    and CEO
  • If you expand the ability of individual members
    of the organization, you expand the ability of
    the organization.
  • Bob Buckman

Source Reference 17
Knowledge Sharing Evolution
  • STEP 1 ? Send out PhDs to gather best practices
  • Costly Inefficient
  • STEP 2 ? Runners
  • Slow Limited Knowledge
  • STEP 3 ? GMs connected through network for email
  • Wrong People
  • Conclusion ? The people who really need the
    information were the people in front
  • of the customer. Bob Buckman
  • STEP 4 ? Field Sales people given access

Knowledge Management Strategy
  • Simplify the lines of communication
  • Gives everyone access to the knowledge base of
    the company
  • Allow each individual to enter knowledge into the
  • Function across time and space with the knowledge
    base available 24/7
  • User friendly
  • Communicate in whatever language is best for the
  • Update automatically the accumulation of
    technical QA should generate knowledge bases for

Source Reference 17
Knowledge Transfer Department
  • 1992 Knowledge Transfer Department created
  • (Head reporting directly to the Chairman.)
  • Companys network on CompuServe, the public
    online service
  • Sales people got a leased notebook with a modem
  • Point-point link with headquarters by a phone
  • Time frame 30 days to implement
  • Cost 75,000 per month in access charges

Source Reference 17
KNetix System
  • Forums
  • Tech Forum open to all employees, message
    board, conference room, library section
  • Internal Forum focused on internal improvement
  • Business Forum focused on helping the customer
  • ALL Forums
  • Monitored by System Operators Section Leaders
  • All forums set up in English - translators were

Source Reference 18
  • Those individuals who have something
    intelligent to say now have a forum in which to
    say itThose who will not or cannot contribute
    also become obvious and can be intelligently
    eliminated from the organization.
  • Bob Buckman
  • 1994 invited 150 top knowledge shares to
    Scottsdale, Arizona for retreat
  • Received a new IBM ThinkPad 755

Source Reference 17
  • Ways to Improve
  • Increase participation by non U.S. Associates
  • Cultural issues - not cool to type or ask for
  • Language problems - Forums set up in different
  • Results
  • 1994 KTD 8.4 million (plans to spend 9.5
    million in 1995)
  • 65 of sales people out selling - 16 in 1979
  • 33 sales from products less than 5 years old -
    22 prior to KNetix
  • 1999 sales over 300 million
  • Received the Arthur Andersen Enterprise Award
    Smithsonian Computerworld for Knowledge Sharing

Source Reference 17
  • Definition of knowledge management
  • What distinguishes knowledge management over
    information and data
  • Types of knowledge
  • Interesting statistics of knowledge management
  • The transition to implement knowledge management
  • e-business
  • Implementing knowledge management to firms

Disadvantages of and challenges to implementing
knowledge management
  • Not all people in the firm would share their
  • Not all people in the firm understand the concept
    of and how to implement knowledge management.
  • The implementation of knowledge management can be
    considered as another expenditure to the firm by
    the senior executives and / or non-IT people in
    the firm ? the chance of failure like the other
    IT projects.

Best Practices
  • Foster communication between skill areas.
  • Promote product training.
  • Create open physical work environment.
  • Encourage independence and risk taking.
  • Provide extensive documentation.
  • Make support resources easily available.
  • Expect large learning curves in projects.

Best Practices
  • Developed to be highly specialized ? By country,
    industry, idea, business unit.
  • Divided by external and internal sources
  • Can take advantage from 3rd party information
  • Can take advantage of internal ideas.
  • Available to clients
  • Filtered information is available to clients.
  • Highly accessible to firm employees
  • Intranet, Lotus Notes and Internet.

Best Practices
  • Simplify the lines of communication
  • Get information to the people in front of the
  • Give everyone access to knowledge base of the
  • Operate 24/7
  • Operate in users preferred language
  • Track all research for later use

  • 1. KMPG Consulting Knowledge Management
    Research Report 2000, p.5-9, 14-16.
  • 2. Document and Knowledge Management
    After-Hype KM Enters Critical Phase. Computing
    Canada, April 14, 2000. p13
  • 3. The Introduction to Knowledge Management by
    Dr. Nancy Shaw, an assistant professor at George
    Mason University's School of Management, URL
    http// , slide
  • 4. Yogesh Malhotra, Knowledge Management for
    E-Business Performance Advancing Information
    Strategy to Internet Time, In the Executives
    Journal, V.16, No. 4, pp. 5-16, 2000.
  • 5. Dick Stenmark, Information vs. Knowledge The
    Role of Intranets in Knowledge Management, URL
  • 6. Polanyi, M. The tacit dimension. Reprinted in
    L. Prusak (ed.), Knowledge in Organization.
    Boston Butterworth-Heinemann, 1998, pp. 135-146.
  • 7. Wittgenstein, L. (1958). Philosophical
    Investigations. Oxford Blackwell.
  • 8. Tsoukas, H. Do we really understand tacit
    knowledge. Presented to Knowledge Economy and
    Society Seminar, LSE Department of Information
    Systems, 14 June 2002.
  • 9. Stenmark, D. Leveraging Tacit Organizational
    Knowledge. Journal of Management Information
    Systems Winter 2000/2001 17, 3 ABI/INFORM
    Global pp 9.
  • 10. Schachter, D.L., 1998, Memory and
    Awareness, Science 280, 59-60.

  • 11. Gorman, M.E. Types of Knowledge and Their
    Roles in Technology Transfer. Journal of
    Technology Transfer Jun 2002 27, 3 ABI/INFORM
    Global pg 219.
  • 12. Schön, D. A., The Reflective Practitioner,
    Basic Books, 1983.
  • 13. Stenmark, D. Information vs. Knowledge The
    Role of intranets in Knowledge Management.
    Proceedings of the 35th Hawaii International
    Conference on System Sciences, 2002.
  • 14. McCauley, M. PricewaterhouseCoopers Building
    a Global Network. Case Study, Centre for Asian
    Business Cases, School of Business, The
    University of Hong Kong. 2000.
  • 15. Behrend, E. Knowledge Management Resources.
    Tax Start, Philadelphia. August 13, 2002.
  • 16. Weinreibh, A. SALT Knowledge Management
    Resources. Tax Start, St. Louis. July 18, 2002.
  • 17. Fulmer, William E., Buckman Laboratories (A),
    Harvard Business School, 9-800-160, January 22,
  • 18. Buckman Laboratories,,
    October, 2003.
  • 19. Buckman Laboratories, Bulab Holdings Annual
    Report 2002.