The paper relies on a few critical factors to design a successful knowledge management system and at the same time justify why those factors were relied upon. To examine how successful knowledge management systems have been in the real-life situation, this paper will draw on a case study of a company that has ratified a successful KMS in its operations.
Based on this paper, Knowledge Management involves planning, organizing, motivating, and controlling people, processes and systems in an organization to improve its knowledge-related assets and ensure that they are effectively employed. These knowledge-related assets include: knowledge in printed documents, such as, patents and manuals; knowledge in electronic storage like a database with the organization”s “best practices”; employees” knowledge about how to do their jobs; knowledge held by teams that have been working on problems; and knowledge entrenched in the organization”s products, mechanisms, and connections. Knowledge Management procedures entail modeling or obtaining the knowledge, cleansing it, keeping, transmitting, distributing, and applying it effectively in the organization
With the definition of having the term knowledge management, it is possible to critically evaluate the existing literature on why knowledge management systems across business sectors have either failed or succeeded to deliver the value they have promised. This section of the paper gives numerous reasons why they have failed and reasons why they have succeeded, and examines different business sectors, which have implemented those.
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Success Factors across Business Sectors
Technology and the ability to obtain accurate information at the right is quite critical for the success of KMS. Most business organizations have realized the advantages that come with successful knowledge management systems. According to Ajmal (2009), currently, knowledge is universally recognized as a critical competitive asset, and interest in knowledge management has therefore increased in most companies (p. 133). Knowledge management systems that entail the aggregation and dissemination of the organizations total intelligence offer numerous benefits to businesses. On global institution that has successfully adopted a successful knowledge management system is the World Bank. The bank has radically transformed itself from a bureaucratic low-interest financial institution to a decentralized global bank that utilizes knowledge management techniques to fight poverty and other human challenges in developing countries. The success of the banks knowledge management systems are founded on a new information that was launched recently. The success of KMS at the word bank is also linked to a robust communication network that gathers information and disseminates it in real time to clients. Yammer incorporation is another example of a business that adopted efficient technology with the ability to suit client”s unique needs. Currently, Yammer incorporation, a subsidiary of Microsoft offers social enterprise solutions to most successful companies in the world.
The other factor is Personal Limits and Coordinators People are often afraid to share their knowledge within an organization. This is explained by the lack of trust between each other (Rubenstein & Geisler 2003). Southern Co., a utility company that supplies energy in the gulf coast region of the United States survived the effects of Hurricane Katrina because of the company”s ability to collect and store relevant data from people. Thus, according to Wild and Laumer (2011), most utility companies suffered the effects of Hurricane Katrina because of lack of knowledge management as the employees were dissatisfied of the implementation of the MKS. However, if the management of the company would have outlined all the advantages of using the KMS, this method would have had a brighter future within this company.
Hewlett-Packard KMS implementation of sharing knowledge after outlining the problem, which existed within the organization, showed successful results when “Bruce Karney began to work on approaches to knowledge sharing for HP educators… to make groups more of a community” (Akhavan, Jafari & Fathian, p. 102). Individuals often hesitate about the type of knowledge, which can be shared. They think about the consequences and how it can affect the process itself. Businesses organization must have the ability to collect and collate relevant data within a short time. Therefore, this issue can be a huge barrier in peoples” processes, leading to the KMS failure.
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Socio-organizational barriers and facilitators will be discussed in the given essay separately in a way these were defined by Bolisani and Scarso (2009). Thus, social factors are trust, reputation, homophile, and ethnic barriers. Trust is based on confidence that the parties of the process are reliable and responsible, and, therefore, have insurance that all the needed information is kept in safety. Reputation is one of the important features expressed by every individual in the process, as those who are involved in it need to be sure of person”s reliability. Homophile and ethnic barriers are probably one of the most complicated barriers that may arise in the communication process, as people need to deal with understanding of the person and treat him/her in the same way as they wanted to be treated.
Organizational factors are divided into physical distance, organizational separation and boundary spanners roles, extrinsic motivators, organizational routines, as well as culture and climate (Kouzmin & Sankaran 2005). Thus, physical distance plays a vital role in individual processes. The closer people are to each other and the more often they communicate, the fewer barriers in their interpersonal relationships arise. For example, organizational factor was an important factor for the construction industry in Taiwan because the implementation had strong support from the top management, which ensured its success. Organizational separation and boundary spanners roles allow individuals to get an understanding of the responsibilities during the process and avoid any failures of the KMS. As it was stated by Bolisani and Scarso (2009), “for establishing a consistent culture of knowledge sharing valuable currency are needed, such as substantial monetary rewards, salary increases, promotions and so forth” (p. 268). Organizational routines are needed within the process for breaking all the barriers between the individuals. Handzic (2005) argued that culture and climate “are supported by the KM framework, which suggests that knowledge processes are facilitated by a conductive organizational environment.” For example, Goodman (2007) discussed the Arup Company, which was founded in 1946; it used the KM and reached success after the implementation. In addition to this, many organizations seek the help of the consultants, whose main job is to ensure that all the employees work in good conditions and are open to the communicational process.
Failure across Business Sectors
However, there are also examples of organizations that have failed in their efforts to establish knowledge management systems. One such example is a pharmaceutical company called Pharma Corp. the company did not succeed in implementing a KMS. The reason to this was a lack of positive and solid organizational culture among the employees. Another good example of the KMS successful implementation is related to Ernst & Young, which implemented the system into the managerial department in 1990 by creating the centers with “libraries, call centers for answering consultant requests and a database of consultant skills” (Akhavan, Jafari & Fathian, p. 100). As a result, “by the end of 1996, the CBK would have more than 100 professionals” (Akhavan, Jafari & Fathian, p. 100).
According to Ralph (2008), the culture was outlined as the most important factor that led IBM to a failure when the company purchased “ROLM phone company in 1985, which was smaller than IBM with a markedly different culture” (p. 167). Total ignore of that factor led to a complete failure of this purchase. Another example of the KMS failure implementation was described by Akhavan, Jafari & Fathian (2005), when “lack of commitment and support of management had a main role in the failure of knowledge management project in Calibro” (p. 6).
Technological barriers and facilitators have to deal with the KMS quality and with the quality of knowledge archived into these systems. The KMS quality includes an enormous number of data gathered together in order to help an individual to achieve better results in performance. Tsui (2005) discussed the lack of integration about the processes and technology. He claimed that “the most apparent limitation of the study is that participation was restricted to organizations that expressed an interest in knowledge management, and presumably wished to receive some assistance from the researcher.” Second is required the format for the knowledge storage, as it will ensure individuals that no information is lost. Third, inadequate technology in terms of speed, capacity, usability, safety and accessibility also refers to technological barriers.
Thus, technology has been considered as a quick and reliable component, with the ability to be used and accessed, while knowledge has been considered as the component that is well-fixed and needed for businesses in order to achieve its goals and objectives. There are many examples in the world describing successful implementation of the industry. Such success can be traced within the travel industry of such countries as Malaysia, for example. Jennex (2011) discussed about its success as there has been “simplicity of technology, ease of use, suitability to user”s needs, relevancy of knowledge content, and standardization of a knowledge structure” (p. 60). The company managed to gain a success with the help of intelligent integration the KMS within the tourism industry.
Factors Crucial to Design Successful KMS
Having examined the factors that lead to success of failure in adoption of KMS in the previous sections, it is also important to analyze factor that are crucial when designing successful knowledge management systems within an organisation. The paper analyses 7 factors.
Clarity of the KMS System
The theory of knowledge types and transformation designed by Nonaka and Takeuchi in 1995, which is called the SECI model, represents the basis of the models in knowledge theory and presents the process of sharing and transformation of knowledge. The model emphasizes on simplicity of the KMS within organizations. One such model that that is recommended for organizations involves creation/ acquisition, refinement, memory, transfer, sharing, utilization, and finally output in terms of organizational performance. This cycle is particularly important to an organization”s management in that it uses the generally understood language of Knowledge Management and the major phases are more illustrated than defined.
In this cycle, the initiation of the Knowledge Management involves either the creation or acquisition of knowledge by the organization. Knowledge creation involves developing new knowledge or replacing existing knowledge with new content (Little & Ray 2005). Knowledge can be created inside the organization or in conjunction with its partners. Creation of knowledge in this cycle involves four modes of knowledge development (Little & Ray 2005). These are: socialization, combination, externalization and internalization. These four approaches are demonstrated correspondingly via evaluations, apprenticeships, and group discussions (Hevner & Chatterjee, 2010).
Thus, in order to design a successful KMS of the processes of each of the stages, it is necessary to have a simplified system, which could be accessed by all stakeholders without any difficulties. Ward and Peppard (2007) have classified barriers to successful KMS into categories of people, management, structure and finance related. Thus, the categories can be combined into 2 groups of managerial and technical facilitators for successful KMS design and will be critically evaluated with the help of the SECI model.
Excellent Administrative Initiatives
Management is probably the most important process in the organization, because it affects all areas of production. Therefore, incorrect performance can lead to the failure of the KMS. Administrative culture also influences the practice and success of Knowledge Management strategies. A “knowledge culture” is one particular variety of organizational culture representing a way of organizational life that enables and motivates people to create, share, and utilize knowledge for the benefit and enduring success of the organization (Frappaolo 2006). Organizational culture affects the way corporations; groups, branches, and the business as a whole manage their knowledge seeing it as influential when it comes to the individual”s insight on which knowledge they can be able to share and within which period (Holsapple 2003).
Thus a knowledge management practitioner should be able to discern whether the knowledge management processes are hindered by organizational culture and thence find a way to correct it. This means that I should be able to identify a problem and come with a solution even when the problem is underlying, as long as it has an impact on the company”s performance.
Linking KMS To Organization Performance
The main goal or the most common expected outcome of Knowledge Management in any organization is a generally improved organizational performance. Effective Knowledge Management entails acquiring or creating knowledge that is useful in the running of the organization. This is usually the knowledge that is directly applicable and has a significant effect on the productivity of the organization”s personnel (Forstenlechner, et al, 2009). Also, the Knowledge Management concept entails sharing this acquired or created knowledge and storing it while making it readily available whenever needed. This simply means that apart from having well-informed personnel, Knowledge Management ensures that any useful information is readily available to those who need it. Also, the process of creating networks that link the less experienced to the experts creates a knowledge pool that results in creating more experts within the organization. Another advantage of implementing Knowledge Management is that, although organizations, just like human beings, cannot fully utilize their knowledge capacities, sharing and storing of this knowledge ensures that it can be accessed by those who need it and translated into productivity, thus optimizing the usage of organizational knowledge. Apart from that, Knowledge management promotes both individual and organizational growth, thus translating to better employee retention, higher organizational performance, and much more efficient use of organizational resources such as employee knowledge. All these translate to better and more effective management in organizations.
Embracing New Ideas and Innovation
Generally, Knowledge Management uses a collection of organizational processes to promote the organization”s peak performance. These processes include organizational learning, collective learning, collaborative problem solving, embedding knowledge, creating dynamic capabilities, and availing knowledge for re-use. Knowing when and how to initiate these processes are the expectations of efficient knowledge management and through my insights; I believe I am capable of meeting these expectations and carrying out a successful knowledge management program.
Good relations Between Suppliers and Consumers
For an organization to succeed in KMS, there must be a good relationship between vendors and consumers. There must be a communal learning, character learning, and/or shared problem solving; it may also be entrenched in the application of the business, its systems, products, and even its internal and external relationships.
To a large extent, Knowledge Management is an organizational activity that focuses on how managers can enable the efficient and effective use of the knowledge in their organizations. It enables them to categorize employees in a way that can optimize the use of their skills, talents and insights for the benefit of the organization. This is done by achieving the Knowledge Management goals, motivating individuals to participate in achieving them, and creating a number of enabling social processes that will aid in gaining success. These processes must capture the interests of all stakeholders to be successful (Disterer, 2005).
According to Ralph (2008), Knowledge Management system function in an organization should be involved in developing methodologies, support systems, and motivating the people to participate in them. I believe all these are aimed at leveraging and improving the organization”s knowledge assets so as to shape knowledge practices that will result in generally enhanced organizational behaviors, effective teamwork, better decision making, and improved collective organizational performance.
Case Study: Baker & Mackenzie
Baker & Mackenzie is one of the top 3 largest law firms in the world, providing services to corporations and governments. Forstenlechner et al (2009) confirms that Baker & Mackenzie is one of the largest law firm in terms of revenues or the number of employees.
Legal professions are incredibly knowledge intensive. Laws are constantly changed and updated, new precedents in common law countries appear on a daily basis (Forstenlechner et al 2009). Thus, lawyers require a knowledge management system, which will contain all the necessary updates in a very structured way, so that these are easy to find and access. The initiative to launch a KMS came from the law firm head office, which had provided infrastructure, created KM methodologies and appointed a Chief Knowledge Office (CKO). A newly established KM department led by non-fee making lawyer was responsible in taxonomies, change management, technology projects and information services in four core dimensions of precedents, library, legal research and personal development. Each geographical region had a fee-making lawyer, who was legally responsible and accountable to the head office for collecting and making available locally and globally relevant materials regarding all markets and service functions laws updates and precedents in his geographic region.
- Launch the knowledge management system to increase the performance and profitability
Disterer (2005) stated that in European law firms, there is on average one knowledge management professional per every 25 lawyers in the company, who supports them. Darroch (2005), however, stated that no significant evidence is available to support the claim that knowledge management systems increase the performance and profitability of law firms.
- Launch a KMS, which will be useful to law firm partners worldwide.
As the company provides global legal advices to corporations and governments, it has complex worldwide structure, categorized by region, industries and service functions. The geographical spread of the company sophisticates knowledge indexation and accessibility.
The company has used Intranet technology with deep complex files structure categorized by regions, markets and functions to store the documents. The files posted by regional KM officer were reviewed and approved by KM head office. Furthermore, KM local and KM head office officers could be reached by phone, email or IM to request specific information if the lawyers could not find it.
Andone (2009) stated that a KM performance can be measured either on the project level or a company-wide level. However, it is difficult to measure the specific KM contribution into increased profitability or performance. Andone (2009) suggested that KM effectiveness can be evaluated by three means: 1) outcome; 2 activities and 3) employee survey.
The simultaneous use of all three means of evaluation will increase the accuracy of the KM evaluation; however, it will also increase the cost and time of such an evaluation. The evaluation is necessary to assess whether the design can be improved to further enhance the usefulness of a KMS and to justify the investment made.
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The initiative of launching a KMS, which is designed to make it easier for lawyers to access materials regarding precedents, library, legal research and personal development, is a necessary step for a company oriented on a long-term success. It is clear that law firms realize the importance of people”s development, as the employed lawyers” knowledge is what generates fees and reputation for a law firm.
There is, however, a few concerns regarding the future of a KMS in the form, how it is viewed at the firm”s head office. First, the KMS initiative came from the head office, and all the KM procedures and methodologies were developed in the head office, without the participation of most employees who work outside of the head office. Even though it could have been difficult to either survey most of the lawyers on the subject of how they see a prospective KMS implementation in the company and what specifically they would like to have in terms of KMS, or to observe them working in different geographic areas to understand how they work and what they need, it is one of the most crucial determinants of a KMS success and a survey or observation had to be done in order to increase the KMS success. Second, the firm”s head office had imposed a legal responsibility to ensure that KM initiative is executed in regions. Third, the geographical spread of firm”s operations implies quite significant cultural and legal systems differences. This has an adverse effect on combination stage of SECI model since at this stage the knowledge is indexed and stored in the global firm”s Intranet. Language differences of lawyers coming from different geographical and law system backgrounds can have an adverse effect on coding/decoding index tags and thus reduce the usability of search software.
Overall, it is reasonable to assume that lawyers within one company have collaborative culture, meaning that they eagerly share their knowledge. From legal papers and precedents, it is clear whom a lawyer was and who managed to achieve a certain outcome. Thus, lawyer”s knowledge is protected, and he/she gets the credit. Recalling nine most crucial factors for a successful KMS launched, Becker and Mackenzie company did well in ensuring that its KMS were simple and there was sufficient administrator support. In addition, the law firm succeeded in nurturing innovation, fussing its performance targets with KMS, and cultivating a health relationship with its vendors. However, the company had difficulties in ensuring that there was remarkable stakeholder involvement. The firm also failed to establish an efficient quality assurance system to ensure that only pertinent information was captured for use.