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1 Key Factors in Knowledge Management Dr. K.V.S.N JAWAHAR BABU Professor & Principal K.M.M INSTITUTE OF TECHNOLOGY & SCIENCE, RAMIREDDIPALLI, TIRUPATI, Mob: Abstract This paper presents the Key Factors in Knowledge Management. It is a need of the hour to big, medium, and small and all kind of organizations to cope with the challenges of knowledge management in the new century. This paper aims to identify the critical success factors and best practices of knowledge codification for knowledge management through analyzing the experiences of several organisations. The paper starts by defining what is meant by knowledge and knowledge management, and follows on by presenting the knowledge processes which are at the basis of knowledge management practices. The study assumes that to evaluate the success of a Knowledge Management, are the Key Success Factors (KSFs) on the quality and quantity of the contributions to the system from the employees. Factors such as strategy, culture, information technology, people and organizational structure have arisen as key dimensions to be considered in Knowledge Management System implementation. This paper argues that a comprehensive KMS implementation framework that incorporates factors which focus on issues of strategy, structure, people and IT can benefit research, in terms of highlighting areas for further study, and practice in formulating KM strategies and in implementing KMS. In today s business climate, competitive pressures are greater than ever. Organizations must leverage any competitive advantage to gain or maintain an edge. Or, in the midst of a shrinking economy, there is always a need to do more with less. Recently, many organizations have turned to knowledge management (KM) systems like SharePoint to create new knowledge. Some experts consider knowledge to be perhaps the only sustainable competitive advantage. With knowledge come better decisions, more efficient teams, and a commitment to learning. However, the high risk of failure is well documented which compels us to study why and then define critical success factors that are found within successful implementations. Electronic copy available at:

2 Introduction To make knowledge work productive will be the great management task of this century, just as to make manual work productive was the great management task of the last century. - Peter F Drucker Knowledge is power, especially in the Internet age. Knowledge is at the heart of knowledge management. Knowledge is a more or less detailed familiarity with someone or something that can include descriptions, facts, information and/or skills acquired through experience or education. It can refer to both the theoretical or practical understanding of a subject. It can be implicit (as with practical skill or expertise) or explicit (as with the theoretical understanding of a subject); and it can be more or less formal or systematic. Knowledge Management (KM) is a major component of an organization's Intangible Assets. KM is the range of strategies and practices to identify, create, represent, distribute, and enable the meaningful use of people's insights and experiences in an organization. KM seeks to maximize the value of its people's insights and experiences by cultivating the two common forms of knowledge: explicit knowledge (written knowledge), and tacit knowledge (hidden personal learning s).km creates a new working environment where knowledge and experience can easily be shared and also enables information and knowledge to emerge and flow to the right people at the right time so they can act more efficiently and effectively. KM is also known as a systematic, goal oriented application of measures to steer and control the tangible and intangible knowledge assets of organizations, with the aim of using existing knowledge inside and outside of these organizations to enable the creation of new knowledge, and generate value, innovation and improvement out of it. The field of KM is of growing interest in today s business and academic world. Today organisations are living in a world of expanding knowledge with more and more people being described as knowledge workers, and knowledge being widely accepted as the only true business asset. Global organisations have started using Knowledge Electronic copy available at:

3 Management technologies to heighten their competitiveness in ways that were impossible a few years ago. There are six strategies for developing knowledge management processes within organizations: 1. Define a KM business case. What levels of knowledge and innovation will the agency need to stay ahead of "environment" and be "competitive?" 2. Baseline the intellectual capital. Knowledge is an intangible asset, but human capital is not--measure current and projected workforce capabilities, HR investments, and expected return on investment. 3. Make sure the senior executives "get it." Collaboration and knowledge sharing begin at the top, not at the bottom. Top management has to see how KM will affect performance and why it is critical for innovation and change. 4. Build KM from the bottom up and across. What's most important about any KM program or process is its ability to facilitate knowledge exchange among those individuals closest to the work, to the customers, and to the processes. KM must be an enabling process that captures both best practices and new ideas while promoting access. 5. Balance external and internal. The value of KM program is multiplied by its reach--it needs to connect to other agencies, customers, and stakeholders. 6. Think technology last and "chunk" investments. What products will be needed to support the first level of KM development? Figure 1: KM Processes

4 Dimensions of Knowledge Management Different frameworks for distinguishing between knowledge exist. One proposed framework for categorizing the dimensions of knowledge distinguishes between tacit knowledge and explicit knowledge. Tacit knowledge represents internalized knowledge that an individual may not be consciously aware of, such as how he or she accomplishes particular tasks. At the opposite end of the spectrum, explicit knowledge represents knowledge that the individual holds consciously in mental focus, in a form that can easily be communicated to others. The content perspective suggest that knowledge is easily stored because it may be codified, while the relational perspective recognizes the contextual and relational aspects of knowledge which can make knowledge difficult to share outside of the specific location where the knowledge is developed. Knowledge management begins with the results of human thought and experience, and therefore with human culture. The second dimension acknowledges the handling of knowledge as a set of objects rather than something that has to be 'known' by the individual for its value to be appreciated. The cultural aspects begin with the difficulty of sharing knowledge. For application of knowledge to be effective.

5 Figure: Dimensions of KM A MODEL OF KMS IMPLEMENTATION Strategy: While knowledge is recognized as a critical resource for sustained competitive advantages, successful knowledge management remains a key challenge to organizations. KM requires the application of significant organizational resources, techniques and tools which requires solid planning from the beginning states that KM strategy must be closely aligned to business strategy. Some authors suggest that many organizations used pre-existing information systems planning methods for deploying and implementing KMS. They argue that KM strategies should be able to address such organization factors as structure, culture and people. Although structures are intended to rationalize individual functions or units within an organization, they have often had the inadvertent result of inhibiting collaboration and sharing of knowledge across internal organizational boundaries. Structures for example, encourage individualistic behavior in which locations, divisions, and functions are rewarded for hoarding information and inhibiting successful KM across the organization. Structures place limits on communications and can create intentional or unintentional obstacles. The optimization of knowledge sharing within a functional area can increasingly sub-optimize the sharing of knowledge across the firm. Two distinct structures have received constructive analysis with reference to

6 effective KM. A modular organizational design combined with a modular product design can diminish the costs of coordination and adaptation, thereby increasing flexibility. The recent wave in KM literature has begun to focus on the importance of people in relation to KMS. Some companies invest millions of dollars in KMS, these fail to whet the interest of employees; paradoxically, some of these employees spend a large part of their day sharing knowledge on external online communities. Some employees have more loyalty to peers in other organizations than to their own organization. Furthermore, with the rate of employee turnover increasing, it is now more important than ever to capture employee s knowledge. Therefore, managing people who are willing to create and share knowledge is important. Getting employees to share knowledge is regarded as critical for successful KM. Information Technology (IT) can be viewed both as a key contributor to and as an enabler of KM. IT can be widely employed to connect people to reusable codified knowledge, and IT should facilitate conversations to create new knowledge. IT affects knowledge sharing in a variety of ways. First, IT facilitates rapid collection, storage, and exchange of knowledge on a scale not practicable in the past, thereby assisting the knowledge creation process. Second, a well developed technology infrastructure integrates fragmented flows of knowledge. This integration can eliminate barriers to communication among departments in an organization. Third, IT fosters all modes of knowledge creation and is not limited to the transfer of explicit knowledge. For instance, Info Test s enhanced product realization (EPR) project employs electronic white boarding and videoconferencing to enhance exchanges of tacit knowledge.

7 Figure : KMS Model Knowledge Management Success Factors The critical success factors are useful for structuring environmental analysis because there is an important link between environmental analysis and critical success factors leading to organizational success. The analyses of these factors provide an important meaning to knowledge management through the identification of core processes that are critical to successful knowledge management implementation. Thus, a knowledge management program needs to identify critical performance indicators of success factors to gauge its performance. In achieving this, various knowledge management models have been reviewed so that a unified framework of knowledge management can be developed. From the analyses of the models, it was found that several studies have proposed several key variables for successful implementation of knowledge management. There are eight identified knowledge management success factors such as (1) technology infrastructure; (2) Organizational infrastructure; (3) balance of flexibility, evolution and ease-of-accessibility to knowledge; (4) Shared knowledge;

8 (5) knowledge-friendly culture; (6) Motivated workers who develop share and use knowledge; (7) Means of knowledge transfer using various information technology infrastructures; (8) Senior management support and commitment. There are five more success factors such as (1) An open organizational culture; (2) Senior management leadership and commitment; (3) Employee involvement; (4) Teamwork and (5) Information systems infrastructure. Ten key components to successful knowledge management were identified: (1) A friendly organizational culture; (2) Senior management leadership and commitment; (3) Employee involvement; (4) Employee training; (5) Trustworthy teamwork; (6) Employee empowerment; (7) Information systems infrastructure; (8) Performance measurement; (9) Benchmarking and (10) Knowledge structure.

9 Figure: Primary Success Factors for KM The Link between Key Success Factors and K M Implementation Numerous studies have pointed out on the importance of employee training to knowledge management implementation success. Suppose a company wants to become a truly knowledge-based organization, it must start with quality training. This is true because in virtually every market, customers are demanding high quality, lower costs and faster cycle times. To meet these requirements, firms must continually improve their overall organizational performance. Rapid advances and technology and improved processes have been important factors helping businesses meet this challenge. However, the most important competitive advantage to any firm is its workforce one that must remain competent through continuous training and development efforts. Training provides employees and managers the skills and information to fulfil their responsibilities. Improved performance is a strategic goal for organizations in order to achieve the bottom line purpose through training and development. For the same reason, a number of organizations have become or are striving to become learning organizations. This is because one of the reasons for the failure in effective work behaviors would be insufficient training to support knowledge management principles. Such learning organizations view training as a strategic investment rather than a budgeted cost.

10 The importance of training capabilities for any organizations is well recognized, especially for those agents concerned with preserving intellectual capital. The daily task of human resource development in building of a learning organisation as (1) Assisting employees in creating and using knowledge; (2) Establishing appropriate networks; and (3) Engaging in double-loop learning. One of the key elements of successful knowledge management is education to help employees recognize what knowledge is valuable, and therefore merits sharing. Unless people in organizations possess the learning capability to use knowledge creatively, a well-developed knowledge management system cannot be directed at sustaining profitability. In addition, it is not surprising that one of the most recent and popular training tools for knowledge management is a corporate university educational organizations established and run by companies to provide total education to their workforce. There have been more corporate universities being established all over the globe to support organizational learning efforts. Thus, timely and appropriate employee training is one of the key success factors for knowledge management implementation. The detailed discussions of Key factors in Knowledge management are as follows: Factor 1: Management leadership and support Leaders act as catalysts for KM Management establish the necessary conditions for KM Management act as role model to exhibit the desired behavior Leaders encourage knowledge creation, sharing and use Management recognize KM as important to business success Management demonstrate commitment and support for KM Organizational change management toward adoption of KM through employees Factor 2. Organizational culture Having a culture that values knowledge seeking and problem solving High level of trust among employees important in sharing knowledge Sharing of mistakes openly by employees important without the fear of punishment The collaboration among employees important Encouragement of teamwork among employees

11 Empowerment of employees to explore new possibilities Encouragement of individuals to ask Acceptance of knowledge sharing (not hoarding) as strength Factor 3. Information technology The use of an appropriate KM system The application of technological tools (collaborative tools, knowledge bases, searching tools, document management systems, intelligent systems etc) Utilization of the intranet or internet Appropriate knowledge structures or categories for a repository Ease of use of the technology Suitability of the KM system to users needs Factor 4. KM strategy Having a common vision that people support To develop a KM strategy Having clear objectives and goals for KM To align KM strategy with the business strategy That a KM strategy to support a vital business issue The identification of the potential value to be achieved Factor 5. Performance measurement Measurement of the benefits of a KM initiative Track the progress of a KM initiative Evaluation of the impact of KM on financial performance Development of indicators (both hard and soft) for measuring KM Measurement of the value of intellectual capital Factor 6. Organizational infrastructure Appointment of a knowledge leader (knowledge officer or manager, etc.) Establishment of a knowledge team or group Specification of roles and responsibilities for performing KM tasks Clear ownership of a KM initiative Having an organizational flat structure

12 Factor 7. Processes and activities To what extent is it important to create new ideas and knowledge? Documentation of key knowledge and lessons learned Having efficient processes for classifying and storing knowledge Having efficient processes for finding the required knowledge Sharing knowledge using both electronic and face-to-face approaches Effective communication among employees Application of the best knowledge to an organization s products and services Encouragement of continuous learning at all levels Protection of knowledge assets from unauthorized exposure or being stolen Validation and relevancy of knowledge Factor 8. Rewarding and motivation Provision of the right incentives to encourage the behavior for KM Motivation of employees to seek for knowledge Visibly rewarding employees who share and use knowledge Rewarding employees with an emphasis on group performance Tying motivational approaches to job performance assessment system Factor 9. Removal of resource constraints Considering resources availability when investing in KM Proper budgeting and allocation of resources for KM Sufficient financial resources for building a technological system Sufficient human resources to support a KM initiative Provision of time to employees to perform knowledge related activities Factor 10. Training and education Training on the concepts of knowledge and KM Building awareness of KM among employees through training Training on using the KM system and tools Training for individuals to take up knowledge related roles Training in skills development such as creative thinking, problem solving, communication, soft networking, team building, etc.

13 Encouragement of employees to participate in internal and external new learning opportunities such as conferences, training seminar, university courses, etc. Factor 11. Human resource management Recruitment of employees to fill knowledge gaps Hiring people who have a positive orientation to knowledge Professional development activities for employees Retention of employees to work for the company Provision of career advancement opportunities to employees Factor 12. Benchmarking Provision of guidelines to operate a benchmarking system Encouragement of employees to benchmark other organization s best practices Establishment of internal benchmark on coordination of strategy, budget, and HR systems Conclusion The purpose of this thesis is to gain a better understanding of how some factors are critical for the successful application of Knowledge Management (KM). The effective implementation of KM is controlled by certain factors. Understanding up front what these factors are enable proactive management and mitigates a project s largest risk areas. Keep in mind each organization is different, and while these factors apply some degree to mostly all types of companies, the ranking of each will vary. In some organizations, there will certainly be other factors not spelled out. Hopefully with careful analysis of these areas specific the organization, building a successful KM implementation is well within reach and will also yield a strong return on investment.a literature review is in order to identify and categorize the existing measures, suitable for evaluating the hypothesis. Then followed for each construct the existing scales identified, adjusted for application to the specific research field. In the literary reviews the major work on KM implementation focused on the present trends and applications in the e-economy. Wherein, today s competencies become tomorrow s core rigidities with unprecedented speed. An organization should have the capacity to exploit its knowledge and learning capabilities better than its competitors, if it decides to assume a given competitive strategy. Although, KM is an enterprise

14 wide goal, many companies kickoff an initiative in one department and then extend the practices throughout other parts of the organization. To conclude, Knowledge management (KM) is a process that helps organizations find, select, organize, disseminate, and transfer important information and expertise to gain business advantage. References: Tiwana, A. The Knowledge Management Toolkit, (Pearson Education) Awad M.Elias & Ghaziri M. Hassan. Knowledge Management (Pearson Education) Raman A. Thothathri. Knowledge Management (Excel Books) Alavi, M. and Leidner, D. E. 'Knowledge Management and Knowledge Management Systems: Conceptual Foundations and Research Issues Warier Sudhir. Knowledge Management (Vikas) Dr. Reddy B. Rathan. Knowledge Management. (Himalaya Publishing House)