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Knowledge Management

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In the long run, technology, laws, patents, and market share fail; nothing provides an advantage beyond temporary. Technology provided Citibank only a temporary competitive advantage when it first introduced the automated teller machine (ATM). Duplicating pieces of differentiating technology might be expensive, but not impossible. Before long, any technology that provides a competitive advantage to one business becomes a staple component of the services and products offered by any firm engaged in that business. Citibank lost its advan tage when other banks started providing ATM services. ATMs were then no longer considered an added value but expected value.

Microsoft's Hotmail service popularized e-mail systems that allowed users to check their e-mail through a conventional Web browser. Soon copied, the Web-based interface is now a norm for most Internet service providers. What was originally an innovative technology application soon became a basic expectation in the consumer market.

Let us examine 24 key drivers that make knowledge management a compelling case for businesses. Several, if not all, will probably apply to your business, irrespective of your industry. These drivers can be grouped into six broad categories as described below:


1 . The failure of companies to know what they already know.

2. The emergent need for smart knowledge distribution.

3. Knowledge velocity and sluggishness.

Successful companies develop k n o w l e d g e v e l o c i t y , which helps them overcome knowledge sluggishness, to apply what they learn to critical processes at a faster rate than their competitors. Underlying this concept is the integration of a company's knowledge processes with its business processes to substantially enhance business process performance. The quality and celerity of decisions are anchored directly to employees' ability to access k e y actionable information.

Effective knowledge management systems allow people to learn from past decisions, both good and bad, and to apply the lessons learned to complex choices and future decisions.[10]

4. The problem of knowledge walkouts and high dependence on tacit knowledge.

5. The need to deal with knowledge-hoarding propensity among employees.

6. A need for systemic unlearning.

As complex interrelationships within and between companies evolve, the assumptions, rules-ofthumb, heuristics, and processes associated with the ways of doing business and creating products and services change as well. Companies are often caught up in the past and continue to apply old practices, methods, and processes that no longer apply. Companies must learn to unlearn (a term borrowed from knowledge engineering) what they have learned from past experience if it does not apply anymore. The need for such unlearning is difficult to identify in a complex business environment: knowledge management can potentially provide the devices for recognizing such a need.


Technology drivers from knowledge management are either motivated by new opportunities that have arisen for companies to compete through knowledge process differentiation using technology or through their failure to compete sustainably using technology. Next, we examine technology's trials and failures, influence of product, and service life cycle compression caused by technology,

7. The death of technology as a viable long-term differentiator.

8. Compression of product and process life cycles.

Information, service, and physical product life cycles in most markets have significantly shortened, thereby compressing the available window for recouping the expenses associated with their development. Time-to-market is a critical factor in the development of both services and products. The high-technology industry provides an obvious example of the do-or-die imperative that a fast timeto-market poses, but other industries are not too far behind. Look at the cellular-phone-enabled personal digital assistant industry. It has experienced the introduction of a flood of competing products, several real-time operating systems (RTOs), convergence of functionality of hand-held devices, palm devices, small phones (such as 3Com's Palm VII), and car communication systems within a short span of about two years (1 997-1999). Frequent changes in the software, communication protocols supported, and communication and computing hardware and software are common as prices of products plummet in this market. As complex and often irreversible decisions need to be made fast, accurately, and repeatedly, knowledge management holds the promise for accelerating this process.

9. The need for a perfect link between knowledge, business strategy, and information technology.

As we move further into the information age, the interesting counterintuitive shift that becomes evident is that of the firm's anthropocentricity--dependence on people. While computing power can move information and data from Boston to Bombay faster than a click on a keyboard, it's the people who turn that information into good decisions. These people in turn depend on their intelligence and experience. Drucker points out that "knowing how a typewriter works does not turn [someone] into a writer!" As knowledge replaces capital as a driver of a firm, it's all too easy to confuse information technology with information and information with knowledge.


1 0. Functional convergence.

1 1 . The emergence of project-centric organizational structures.

Companies rely on ad hoc project-centered teams for the sole purpose of bringing together the best of their talent and expertise. While teaming up undoubtedly helps, it also brings other problems. The team involved in a success is often moved to the next high-profile project (and unsuccessful teams might be moved to the lowest-profile project). Expertise gained during development of the product or service is not readily available to project teams working the subsequent versions of the product during its evolution.

In a project-oriented,



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