Knowledge Management and Business Intelligence Lecture 24

Today’s Lecture Knowledge Management  Types  Definitions  Activities  Cycle

Today’s Lecture What is Business Intelligence (BI) Core Capabilities of BI Why do Companies need BI Benefits of BI Examples of BI in use BI Golden Rules

Knowledge Management Knowledge Management focus on how knowledge within organisation can be created, captured, stored, and reused within organisation.

Introduction to KM KM is a cross industry field involving other fields like social science, computer science, and management science. There is no consensus on definition of Knowledge Management. However the definition could be defined by understanding the meaning of “Knowledge” which also lack clear-cut definition.

What is knowledge Knowledge can be referred to as understanding based on some learning activities or generated from long time experience. Knowledge can be categorized as:  Know-how knowledge  Know-what knowledge  Know-who knowledge

Introduction to KM… What is Knowledge What is knowledge Knowledge is a fluid mix of relevant experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information [Davenport & Prusak]  Experience (e.g. customer behaviour)  Values (e.g. understand/help/encourage customers)  Contextual information (e.g. customer buying patterns)  Expert insight (e.g. why specific buying patterns occur) Over 60s buying heavy metal music CDs for their grandchildren

Introduction to KM… Types of Knowledge There are two types of Knowledge  Explicit Knowledge  Tacit Knowledge Explicit knowledge can be easily captured and codified. It is in the form of documents, reports, video presentation, e.t.c Tacit Knowledge is a personal knowledge and is within the knower’s mind. It is based on the personal beliefs, intuition and experience, and is hard to codify.

Introduction to KM… Organisational Knowledge Organisational knowledge is a resource consisting of the sum of what is known in that organisation [Holseapple]  About internal matters (e.g. internal processes, know how)  About external matters (e.g. competitors, customers)  About trading partners (e.g. their processes, getting things done in partnership with them)  About not depleting the more it is used

Introduction to KM … The spiral of knowledge (1) The spiral of knowledge processes helps us understand how:  Knowledge is acquired  Knowledge is transformed or converted from one knowledge category to another  Knowledge is shared  Knowledge may be created In the past the processes that underpinned the model were largely informal, but now are becoming more formalised (e.g. encouraged, required, embedded in the way people work) “The key to knowledge creation lies in the mobilisation and conversion of tacit knowledge.” [Nonaka]

Introduction to KM … The spiral of knowledge (2) Explicit to Explicit Tacit to Tacit Tacit to Explicit Explicit to Tacit (Combination Process) (Socialisation Process) (Externalisation Process) (Internalisation Process) Nonaka

Introduction to KM … The Knowledge Spiral (Tacit to tacit) In the socialisation process knowledge is acquired and shared without being made explicit (i.e. without being captured)  For example by: One person talking to another (informal meeting)  If one person imparts knowledge to another then both have the knowledge; and so on One person talking to many (presentations)  A lecturer imparts knowledge to many Many people talking to many (formal team meetings, informal meetings)  Collaboration, Interacting and sharing experience Seeing how things are done (no articulation)  By observing a knowledgeable person solve a problem, a novice can attempt to solve the same or similar problems Socialisation usually occurs between people or within groups of workers with a common interest  However: Knowledge from different disciplines can lead to interesting insights New perspectives can question existing knowledge

Introduction to KM … The Knowledge Spiral (Tacit to Explicit) In the externalisation process tacit knowledge is transformed into explicit knowledge  For example by: An expert writing a document that describes an experience, a way of doing things, what he/she knows, etc. People producing a meeting report (sometimes), a research report, a video of a seminar, etc. Producing a documented list of “frequently asked questions” (with answers!)  Strictly speaking, externalisation is the articulation of tacit knowledge For our purposes, the articulation is captured in some form that can be shared widely  For example: a document that can be read by a select number of people, by all in an organisation (via the organisation’s intranet), or by millions of people (via the Internet)  Very hard process!

Introduction to KM … The Knowledge Spiral (Explicit to explicit) In the combination process various sorts of explicit knowledge are brought together to form more complex or more useful knowledge  Provides a more complete understanding  For example: All of the diagrams, plans, elevations (etc.) for a building produced by architects, surveyors, air conditioning engineers, electricians (etc.) contained in one document All the tasks required to manufactured a passenger aircraft in a volume of documents  The benefit in combination normally comes from the explicit knowledge of a multitude of experts being made visible as a whole

Introduction to KM … The Knowledge Spiral (Explicit to tacit) In the internalisation process tacit knowledge is acquired by examining explicit knowledge from many sources  By integrating this with existing tacit knowledge new insights may present themselves For example:  As a student you acquire much of your knowledge by reading different books covering different subjects  As a computer scientist who reads books on how the human brain works, you can see how programs could simulate some “brain processes”  In an organisational context, the acquisition of tacit knowledge leads to action!

Why knowledge management is necessary (1) Issue: organisations don’t know what they already know  Consequences: Time spent on rediscovery of knowledge that is already known Failure to apply existing knowledge Waste of time and money  What’s the problem? Knowledge within the organisation is not visible

Why knowledge management is necessary (2) Issue: employees don’t know what their colleagues know  Consequences: Inconsistent performance across different parts of the organisation Expertise localisation Repeated failures Inability to apply what is known Competitors innovate at a faster rate  What’s the problem? Knowledge is not shared rapidly within the organisation

Why knowledge management is necessary (3) Issue: knowledgeable employees leave the organisation or retire  Consequences: Critical expertise built up over years is lost overnight Expertise may move to competitors without being retained within the organisation Key customer relationships may be affected Overall organisational knowledge is reduced  What’s the problem? Tacit knowledge walks out the door (and doesn’t return)

Why knowledge management is necessary (4) Issue: employees closely guard their individual knowledge  Consequences: Knowledge is not visible Knowledge is not shared “Turf wars”: “this knowledge belongs to me (or my department) and is not yours” A belief that the knowledge is “owned” by the individual rather the organisation Opportunities for in-depth collaborations are minimised  What’s the problem? Knowledge hoarding by employees

What knowledge management is Definition:  Knowledge Management is a strategy, framework or system designed to help organizations create, capture, analyze, apply, and reuse knowledge to achieve competitive advantage.  A key aspect of Knowledge Management is that knowledge within an organisation is treated as a key asset.

What knowledge management is A simple phrase that encapsulates a core aspect of Knowledge Management is "getting the right knowledge to the right people at the right time in the right format".

Organise Knowledge Maintain Knowledge Target Knowledge Capture Knowledge Transfer Knowledge Knowledge management processes Knowledge Management Processes

What knowledge management achieves Makes visible organisational knowledge no matter where it is Provides access to an organisation’s collective expertise anywhere in the organisation Retains the organisation’s knowledge in times of change Exploits knowledge as a organisational asset Helps to ensure that knowledge is up to date and relevant Helps the organisation to do the right thing Embeds knowledge in the organisation’s processes Enables the survival of the organisation But:  Part science, part art Based on Awad & Ghaziri

Knowledge management scope Knowledge Management Based on Awad & Ghaziri Technology Business People Organisation

Ideal KM environment PEOPLE Knowledge Repository Existing methods/ Processes Learning New ideas Conversion Insights Knowledge Creation Organisational Benefits Codified Technology New products New markets Smarter problem-solving Value-added innovation Better quality customer service More efficient processes More experienced staff External Environment Awad & Ghaziri

Knowledge Management Cycle

KM Initiatives

KM initiative can be described as a systematic attempt to manage knowledge so as to make it visible, and accessible in the right format and at the right time for the benefit of the organisation. Any KM initiative focus on one or more KM processes

KM Initiatives Most of the KM initiatives have one of three aims:  Make knowledge visible through maps, yellow pages, and hypertext  Develop knowledge-intensive culture  Build a knowledge infrastructure

Knowledge Infrastructure Knowledge infrastructure is the set of specific resources needed to facilitate learning within organisation toward a desired strategic goal.  Resources could be physical, informational, and educational.

KM Initiatives Activities that surround the management of knowledge are those that have been depicted on the KM cycle. Other activities include knowledge sharing, and knowledge seeking. Note that any KM initiative must be aligned with the business objective.