Knowledge Management Systems: Issues, Challenges, and Benefits

1
????????Knowledge Management Systems Issues,
Challenges, and Benefits
Alavi, M. and Leidner, D. E., Communications of
the AIS, Vol. 1 No. 7, 1999, pp.2-36.

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2
Agenda

• Introduction
• Knowledge, Knowledge Management, and KMS
• Methodology
• Study Findings
• Discussion
• Conclusion

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Introduction

• Knowledge is the organizational asset.
• It enables sustainable competitive advantage in
  hyper-competitive environments.
• Barriers to the transfer and replication of
  knowledge
• Endow it with strategic importance
• Many organizations are developing information
  systems (IS) designed specifically to facilitate
  the sharing and integration of knowledge
• Such systems are referred to as knowledge
  management systems (KMS).

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Introduction (Cont.)

• Little research and field data exists to guide
  the development and implementation of such
  systems.
• This study provides an analysis
• current practices and outcomes of KMS
• The nature of KMS

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Knowledge, Knowledge Management, and KMS

• To define KMS, it is necessary first to define
  knowledge and KM.
• Definition of knowledge
• Nonaka (1994) and Huber (1991)
• Knowledge is a justified personal belief that
  increases an individuals capacity to take
  effective action.
• Vance (1997)
• Knowledge is information that has been
  authenticated and thought to be true.
• Maglitta (1996)
• Data is raw numbers and facts, information is
  processed data.
• Knowledge is information made actionable.

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Knowledge, Knowledge Management, and KMS (Cont.)

• The characteristics of knowledge
• Knowledge is not a radically different concept
  than information
• Information becomes knowledge once it is
  processed in the mind of an individual (Polanyi,
  1962 Nonaka, 1994).
• Two points from this conceptualization
• Because knowledge is personalized, in order for
  one persons knowledge to be useful to another
  individual, it must be communicated in such a
  manner as to be interpretable and accessible to
  the other individual.

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Knowledge, Knowledge Management, and KMS (Cont.)

• Hoards of information are of little value
• only that information which is processed in the
  mind of an individual through a process of
  reflection, enlightenment, and learning can be
  useful.
• The definition of KM
• KM refers to a systematic and organizationally
  specified process for acquiring, organizing, and
  communicating both tacit and explicit knowledge
  of employees so that other employees may make use
  of it to be more effective and productive in
  their work.

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Knowledge, Knowledge Management, and KMS (Cont.)

• The major challenge of KM
• Is less its creation and more its capture and
  integration (Davenport, 1997).
• The definition of KMS
• IS are designed specifically to facilitate the
  codification, collection, integration, and
  dissemination of organizational knowledge (Alavi,
  1997 Bartlett, 1996 Sensiper, 1997).

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Methodology

• A non-random sample of 109 participants in an
  executive development program in 1997.
• The participants come from 12 countries.
• They are CIOs, IS managers, and general and
  functional area executives.
• They were asked to respond to the study
  questionnaire.
• The questionnaire tapped into
• the respondents concepts and perceptions of KMS,
• Their perceptions of the current levels of KMS
  activities in their firms, their expectations of
  potential benefits, and their concerns regarding
  these systems.

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Study Findings

• The characteristics of sample
• Three perspectives of KM emerged
• Needed KM capabilities
• Key issues concerning KM
• characteristics of KMS

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The characteristics of sample

• By location 12 different countries are
  represented

18
2
4
64
2
8
2
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The characteristics of sample (Cont.)

• By industry

Manufacturing
Consumer products
Energy
Consulting
Chemicals
Other services
Retail
Financial services
Government
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The characteristics of sample (Cont.)

• By position

Managers of functional area
Directors of IS
Senior managers, non-IS
CIO
Managers of IS
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Three perspectives of KM emerged

• Information-based perspective characteristics of
  information
• Readily-accessible information
• Real-time information
• Actionable information
• Categorizing of data
• Corporate yellow pages
• Filtered information
• People information archive

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Three perspectives of KM emerged (Cont.)

• Technology-based perspective
• Data mining
• Data warehouses
• EIS
• ES
• Intelligent systems
• Intranet
• Multimedia
• Search engines
• Smart systems

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Three perspectives of KM emerged (Cont.)

• Culture-based perspective
• Collective learning
• Continuous learning
• Intellectual property cultivation
• Learning organization

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Needed KM capabilities

• Information-based
• External
• Client information
• Competitive information
• Customer information
• Market information
• Internal
• Activity-based costing
• Financial information
• Human resources information
• Product/ services information

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Needed KM capabilities (Cont.)

• Technology-based
• Integrated databases
• Interoperability of existing systems
• Larger bandwidth
• Global IT infrastructure
• Intelligent agents
• Consistent suite of email and web products
• Navigational tools
• Fast retrieval

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Needed KM capabilities (Cont.)

• Culture-based
• Teamwork
• Practical guidelines
• Knowledge sharing

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Key issues concerning KM

• Information
• Building vast amounts of data into usable form
• Avoiding overloading users with unnecessary data
• Eliminating wrong/ old data
• Ensuring customer confidentially
• Keeping the information current

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Key issues concerning KM (Cont.)

• Management
• Change management implications
• Getting individuals to volunteer knowledge
• Getting business units to share knowledge
• Demonstrating business value
• Bringing together the many people from various
  units
• Determining responsibility for managing the
  knowledge

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Key issues concerning KM (Cont.)

• Technology
• Determining infrastructure requirements
• Keeping up with new technologies
• Security of data on Internet

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Characteristics of KMS

• Initiators of KMS in organizations with or
  developing KMS

Staff
CIO
Senior functional manager
Senior general manager
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Characteristics of KMS (Cont.)

• Estimated average budget of KMS in organizations
  with KMS

10-50?
gt100?
50-100?
lt10?
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Characteristics of KMS (Cont.)

• Percent of KMS with various technologies/ tools

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Characteristics of KMS (Cont.)

• Importance of knowledge domain (1-7 max)

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Characteristics of KMS (Cont.)

• Perceived benefits of existing KMS
• Process outcomes
• Communications
• Enhanced communication
• Faster communication
• More visible opinions of staffs
• Increased staff participation
• Efficiency
• Reduced problem solving time
• Shortening proposal times
• Faster results
• Faster delivery to market
• Greater overall efficiency

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Characteristics of KMS (Cont.)

• Organizational outcomes
• Financial
• Increased sales
• Decreased cost
• Higher profitability
• Marketing
• Better service
• Customer focus
• Targeted marketing
• Proactive marketing
• General
• Consistent proposals to multinational client
• Improved project management
• Personnel reduction

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Discussion

• Several observations can be drawn from the data.
• KMS is not just for consulting and professional
  service firms
• The survey showed that interest in KMS goes far
  beyond professional services firms.
• A broad range of organizations from a variety of
  industries is looking into this area, feeling
  that they can potentially benefit from KMS.
• KMS are multi-faced.
• Effective KMS involve technology, cultural, and
  organizational issues.

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Discussion (Cont.)

• It is important to try to develop metrics to
  assess benefits of KMS
• Development of meaningful metrics for measuring
  the value, quality and quantity of knowledge is a
  key factor for long-term success and growth of
  KMS.
• Organizational performance includes customer
  satisfaction, product/ service innovations, time
  to market, cost savings, competitive positioning,
  and market shares..

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Discussion (Cont.)

• An integrated and integrative technology
  architecture is a key driver for KMS.
• KMS seem to require a variety of technical tools
  in three areas
• Database and DBMS, communication and messaging,
  and browsing and retrieval
• Knowledge in the context of KMS is perceived to
  constitute a new form of information not
  previously addressed in other systems such as
  MIS, DSS, and EIS
• Knowledge is created and shared on the basis of
  pull by individuals and not a centralized
  technology-enabled push of information to
  desktops (Manville and Foote, 1996).

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Conclusions

• The study provides a description of emerging
  issues and practices of KMS.
• The study was not intended to build or test
  theory but does offer some insights into needed
  and relevant research in the area of KMS.
• One useful line of inquiry entails an exploration
  of KMS-culture fit
• The success of KMS may be related to
  organizational culture than to organizational
  structure.
• Getting knowledge sharing accepted in their
  organizations

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Conclusions (Cont.)

• Another useful line of research would consider
  methods of making users active contributors to
  KMS.
• A third potential line of research would uncover
  the decision making process for determining what
  knowledge to include KMS.
• Finally, an important line of research will
  consider the issue of KMS benefits
• KM benefits will only be realized by
  organizations that are not only technologically
  adept, but that make the long term investment to
  align the cultural, managerial, and
  organizational elements for KM.