Knowledge Management In The Business Sector

Knowledge Management in the Business SectorAl BergPractice Director/Collaborative ComputingAMC Computer CorporationNew York City, NY USAalberg@amccorp.comwww.amccorp.comBusinesspeople know…Knowledge has Value!“If HP knew what HP knows, we would be three times as profitable.” --Lew Platt, CEO of Hewlett PackardKM is Job OneAccording to the American Management Association (12/98), “Knowledge-Based Management” is the number one ranked IT concern of executives worldwide.Business KM TrailblazersArthur AndersenChevronDow ChemicalHughes Space & CommunicationsKaiser PermanentePrice WaterhouseSequent SystemsScandia AFSTexas InstrumentsUSAAaccording to the American Productivity CenterKM Saves Real MoneyDow Chemical’s initial Intellectual Property management projects saved $40 millionChevron’s KM efforts led to $170 million in savingsTI shared information on increasing semiconductor yields -and saved $500 millionThe CKOChief Knowledge OfficerBuilds a knowledge cultureBuilds the needed infrastructureMakes it all pay off!Only 14.9% of companies responding to a recent survey have a “Chief Knowledge Officer”Top Management InvolvementAccording to the same KM World survey…59.5%of respondents noted that KM initiatives were driven by top management40.5%did not see initiatives as driven by corporate managementSuccessful KM adopters have top management as a driverCultural issuesThe most difficult part of implementing KM in business (and other) settings:“It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things.”Niccolo Machiavelli -The Prince-1513Information Overload -A major driver of KMThe average businessperson in the US, Canada and UK receives approximately 190 messages per dayaccording to a May 1998 survey by Pitney BowesThree Kinds of KM Projects...Creation of knowledge repositoriesImproving access to knowledgeBuilding the “knowledge culture”Knowledge RepositoriesExternal knowledgeCompetitor intelligenceStructured internal knowledgeReports, databasesInformal internal knowledgeDiscussionsRepositories:ExternalCompetitor and client intelligenceCompetitor sales informationIndustry/competitor newsAnalysis of products developed and patents filed by competitorsExternal Repositories at AMC Computer CorporationAccess to external news sources for client, vendor and customer newsLinks to competitor web sitesDemos:The AMC news databaseInquisitRepositories:Structured/InternalDocument managementCapture knowledge as it is createdLeverage existing documents generated in course of business by making them easily accessibleVery common in the legal profession since its data is already document basedRepositories: Structured/InternalData Warehousing“Slice and dice” access to data already being collected throughout an organization -accounting, customer service, etc.New ways of looking at & analyzing existing dataData ----> InformationRepositories: Informal/InternalHewlett Packard’s “Trader’s Training Post”Links trainers and educators throughout HP world wide using Lotus NotesCaptures tips, tricks, insights and experiences and makes them globally accessibleInformal discussion databaseImproving Access to Knowledge“Yellow Pages” which connect information consumers with information sourcesCodifying the “map” of knowledge in the organizationMicrosoft’s SPUDSkills Planning Und DevelopmentMissions:Improve matching of employees to jobs and teamsPlan for future employee skills developmentHow SPUD WorksEach Information Technology job at Microsoft is rated by a manager in terms of the 40 -60 knowledge competencies needed to perform itEach worker’s competencies are evaluated by him/herself, their supervisor and co-workersKinds of KnowledgeFoundation knowledge (entry level)Unique knowledge needed for a job/taskGlobal knowledge for a particular function/organizationUniversal knowledge for the companySPUD Skill CategoriesWithin each knowledge type, workers can possess…Explicit competencies in specific tools and methodsImplicit competencies such as leadership, abstract reasoningSPUD Skill LevelsCompetencies can be categorized as…Basic knowledgeWorking knowledgeLeadershipExpertiseSPUD allows...Managers to find the workers with the skills needed for a particular task/projectWorkers to find assistance on specialized tasksWorkers to determine what type of training they need to advance their careers Improving Access to KnowledgeKnowledge may exist in the organization -but may be difficult to findKM tools can be used to make knowledge available to new internal marketsCase in Point: ChevronBest Practice SharingSharing information on the best,most profitable ways to dobusinessKnowledge Sharing ConferencesIntranetChevron InitiativesBenchmarking costs for oil/gas drilling and using that information to predict and reduce future costsDesignation of “process masters” whose job it is to share knowledgeLooking at competitors’ best practices -as well as those from outside the energy industryThe Result30 percentproductivity gain50 percentsafety gain$2 billionin cost reduction in the 1990sCreating a Knowledge EnvironmentThis is the hardest part for many companiesTraditional business practices may not reward information sharing -even in the same company!Leveraging What Is Already ThereDow Chemical owned 29,000 patents -and did not know what they contained!KM helped them...extract “lost knowledge”sell patents that were not being usedabandon patents that were obsoleteBottom line: US$4 million in savingsNine Keys to KM SuccessKnowledge friendly cultureTechnical/organizational infrastructureSenior management supportLinks to economic benefits/successNine Keys to KM success Process perspectiveClarity of vision and languagePowerful incentivesKM structureMultiple channels for knowledge xferMicrosoft and Knowledge ManagementMicrosoft ExchangeInternet Information ServerDatabasesKM Demo from Lotus Development and IBMThis 9 minute “movie” shows IBM/Lotus Development’s vision for Knowledge ManagementScenario: a new employee’s first day on the job at a biotechnology firm...“The Book” on KM in BusinessWorking Knowledge:How Organizations Manage What They KnowThomas H. DavenportLaurence PrusackHarvard Business School PressThe “Other Book” on KM in BusinessIf Only We Knew What We Know : The Transfer of Internal Knowledge and Best Practice Carla O’DellFree PressKnowledge Management on the WebKnowledge Management Magazinehttp://www.kmmag.comKnowledge Inc.http://www.knowledgeinc.comAmerican Productivity & Quality Centerhttp://www.apqc.orgThank You!Al BergPractice Director/Collaborative ComputingAMC Computer Corporation129 West 27th StreetNew York City, NY 10001Telephone+1-212-620-0700, extension 1243Facsimile+1-212-656-1785Webwww.amccorp.comEmailalberg@amccorp.com