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How to add value to your company's information by turning it into knowledge

Knowledge Management: learn how to do it

by  Matthew Robinson, Microgen-Kaisha

Information is increasingly the lifeblood of any organisation and the management of information is now an important part of any managers job. Yet there is a source of competitive advantage that it rarely tapped by organisations, namely the exploitation of intellectual capital, or knowledge, contained within the organisation. Much of this knowledge is derived from information but is of more value than the information alone.

Developing the knowledge about customers, products, processes and competitors delivers business benefits by increasing understanding within an organisation. The Return On Investment for knowledge management can be described within the following question How much does it cost an organisation to forget what key employees know, to be unable to answer customer questions quickly or at all, or to make poor decisions based on faulty knowledge?

Competitors will always be able to emulate what an organisation can do over time and the only way an organisation can stay ahead is to innovate before their competitors, leaving them always in the position of catching up.

Knowledge Management is the systematic and organised collection, storage and distribution of information within an organisation to improve company performance. The benefits are obvious. In a recent survey, 43% of the respondents said that failing to turn human intellectual capital into organisation knowledge had damaged a relationship with a key client or supplier whilst 50% said they had lost knowledge of best practice in a specific area of their operations.

Most of the valuable knowledge in organisations is still in peoples heads which is a powerful means of storing, sorting and retrieving knowledge but by itself does not give organisational benefit. Technology will not make knowledge but will aid the process of knowledge dissemination. The goal of any knowledge management initiative is not to capture all the knowledge which is contained in peoples heads but it is to do a better job of using individuals knowledge to run the organisation more effectively.

So how is knowledge management different from information management?

Information management is the structured organisation of pre-defined data whereas knowledge management is the ability to link structured and unstructured information by the changing rules according to which people apply it. Information, data and facts are transformed into knowledge when a person understands, interprets and puts into practice the information gleaned; one persons knowledge can be another persons information.

To initiate a Knowledge Management project, an organisation should consider the following questions to understand their current position:

  • What do we know now? Can we get at it?
  • Is knowledge being disseminated?
  • Is knowledge being acquired from outside the organisation? Is it being used effectively?
  • Is new knowledge being created, captured and stored?
  • Is the organisation fully leveraging its knowledge in its products and services or even as products and services?
  • Does the culture of the organisation encourage or discourage knowledge sharing?
First published to members of the Operational Research Society in Inside O.R. March 2000