Knowledge management and business intelligence .ppt

Decision Support and Business
Intelligence Systems
(9th Ed., Prentice Hall)
Chapter 11:
Knowledge Management

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
11-2
Learning Objectives
 Define knowledge and describe the different
types of knowledge
 Describe the characteristics of knowledge
management
 Describe organizational learning and its
relationship to knowledge management
 Describe the knowledge management cycle
 Describe the technologies that can be used in
a knowledge management system

11-3
Learning Objectives
 Describe different approaches to knowledge
management
 Describe the chief knowledge officer and
others involved in knowledge management
 Describe the role of knowledge management
in organizational activities
 Describe the different ways of evaluating
intellectual capital in an organization
 Describe how KMS are implemented

11-4
Learning Objectives
 Describe the roles of technology, people, and
management in knowledge management
 Describe the benefits and drawbacks of
knowledge management initiatives
 Describe how knowledge management can
revolutionize the way an organization
functions
 The future of KN: Web 2.0 and beyond…

11-5
Opening Vignette:
“MITRE Knows What It Knows Through
Knowledge Management”
 Company background
 Problem description
 Proposed solution
 Results
 Answer and discuss the case questions

11-6
Opening Vignette:
MITRE’s View to the KM Process
ENABLING TECHNOLOGIES FOR
KNOWLEDGE MANAGEMENT
Expert
Systems
Data
Mining
Search
Engine
Web 2.0
Databases
Portals
Internet
Collaboration
Web
technologies
Intranet
Extranet
Knowledge
representation
Measurements
Machine
Learning
Artificial
Intelligence
Create
Identify
Share
Act Apply
Modify
CULTURE PROCESS PRACTICE
KM LIFE-CYCLE
Communication
INFLUENCING FACTORS
feedback

11-7
Introduction to
 Knowledge management concepts and
definitions
 Knowledge management
The active management of the expertise in an
organization. It involves collecting, categorizing,
and disseminating knowledge
 Intellectual capital
The invaluable knowledge of an organization’s
employees

11-8
Introduction to
 Knowledge is
 information that is contextual, relevant, and
actionable
 understanding, awareness, or familiarity
acquired through education or experience
 anything that has been learned, perceived,
discovered, inferred, or understood.
In a knowledge management system,
“knowledge is information in action”

11-9
Introduction to
Processed
Relevant and
Actionable
Relevant and actionable processed-data
Database PHASE 5
DEPT 4
DEPT 3
DEPT 2
DEPT 1
PHASE 4
PHASE 3
PHASE 2
PHASE 1
DEPLOYMENT CHART
1 2 3 4 5
Data
Information
Knowledge
Wisdom

11-10
Introduction to
 Characteristics of knowledge
 Extraordinary leverage and increasing returns
 Fragmentation, leakage and the need to refresh
 Uncertain value
 Uncertain value of sharing
 Knowledge-based economy
The economic shift from natural resources to
intellectual assets

11-11
Introduction to
 Explicit and tacit knowledge
 Explicit (leaky) knowledge
Knowledge that deals with objective,
rational, and technical material (data,
policies, procedures, software, documents,
etc.)
 Easily documented, transferred, taught
and learned
 Examples…

11-12
Introduction to
 Explicit and tacit knowledge
 Tacit (embedded) knowledge
Knowledge that is usually in the domain of
subjective, cognitive, and experiential
learning
 It is highly personal and hard to formalize
 Hard to document, transfer, teach and learn
 Involves a lot of human interpretation
 Examples…

11-13
Introduction to
 Knowledge management systems
(KMS)
A system that facilitates knowledge
management by ensuring knowledge
flow from the person(s) who know to
the person(s) who need to know
throughout the organization;
knowledge evolves and grows during
the process

11-14
Organizational
Learning and Transformation
 Learning organization
An organization capable of learning from
its past experience, implying the
existence of an organizational memory
and a means to save, represent, and
share it through its personnel
 Organizational memory
Repository of what the organization
“knows”

11-15
Organizational
 Organizational learning
 Development of new knowledge and
insights that have the potential to
influence organization’s behavior
 The process of capturing knowledge and
making it available enterprise-wide
 Need to establish corporate memory
 Modern IT helps…
 People issues are the most important!

11-16
Organizational
 Organizational culture
The aggregate attitudes in an
organization concerning a certain issue
(e.g., technology, computers, DSS)
 How do people learn the “culture”?
 Is it explicit or implicit?
 Can culture be changed? How?
 Give some examples of corporate culture:
Microsoft, Google, Apple, HP, GM, …

11-17
Organizational
 Why people don’t like to share knowledge:
 Lack of time to share knowledge and time to
identify colleagues in need of specific knowledge
 Fear that sharing may jeopardize one’s job
security
 Low awareness and realization of the value and
benefit of the knowledge others possess
 Dominance in sharing explicit over tacit knowledge
 Use of a strong hierarchy, position-based status,
and formal power
 Insufficient capture, evaluation, feedback,
communication, and tolerance of past mistakes

11-18
Organizational
 Why people don’t like to share knowledge:
 Differences in experience and education levels
 Lack of contact time and interaction between
knowledge sources and recipients
 Poor verbal/written communication and
interpersonal skills
 Age, gender, cultural and ethical defenses
 Lack of a social network
 Ownership of intellectual property
 Lack of trust in people because they may misuse
knowledge or take unjust credit for it
 Perceived lack of accuracy/credibility of knowledge

11-19
Knowledge Management Activities
 Knowledge management initiatives and
activities
 Most knowledge management initiatives
have one of three aims:
1. To make knowledge visible
2. To develop a knowledge-intensive culture
3. To build a knowledge infrastructure

11-20
 Knowledge creation is the generation
of new insights, ideas, or routines
 Four modes of knowledge creation:
 Socialization
 Externalization
 Internalization
 Combination
 Analytics-based knowledge creation?

11-21
 Knowledge sharing
 Knowledge sharing is the willful
explication of one person’s ideas, insights,
experiences to another individual either
via an intermediary or directly
 In many organizations, information and
knowledge are not considered
organizational resources to be shared but
individual competitive weapons to be kept
private

11-22
 Knowledge seeking
 Knowledge seeking (knowledge sourcing)
is the search for and use of internal
organizational knowledge
 Lack of time or lack of reward may
hinder the sharing of knowledge or
knowledge seeking

11-23
Approaches to
 Process approach to knowledge management
attempts to codify organizational knowledge
through formalized controls, processes and
technologies
 Focuses on explicit knowledge and IT
 Practice approach focuses on building the
social environments or communities of
practice necessary to facilitate the sharing of
tacit understanding
 Focuses on tacit knowledge and socialization

11-24
Approaches to
 Hybrid approaches to knowledge
management
 The practice approach is used so that a
repository stores only explicit knowledge
that is relatively easy to document
 Tacit knowledge initially stored in the
repository is contact information about
experts and their areas of expertise
 Increasing the amount of tacit knowledge
over time eventually leads to the
attainment of a true process approach
Hybrid
at
80/20
to
50/50

11-25
Knowledge Management -
A Demand Led Business Activity
 Supply-driven vs. demand-driven KM
Technology approach
Data
Knowledge
Information Action
Results
Supply-driven: DIKAR
Demand-driven: RAKID
Business-value approach
summarize
contextulize utilize
obtain

11-26
Approaches to
 Best practices
In an organization, the best methods
for solving problems. These are often
stored in the knowledge repository of a
knowledge management system
 Knowledge repository is the actual
storage location of knowledge in a
knowledge management system. Similar in
nature to a database, but generally text-
oriented

11-27
Approaches to
KNOWLEDGE MANAGEMENT PLATFORM (KMP)
Human Experts
KNOWLEDGE PORTAL
(Web-based End User Interface)
Intelligent Broker
KNOWLEDGE REPOSITORY
(Knowledge / Information / Data Nuggets)
Web Crawler Data/Text Mining Tools
Manual
Entries
DIVERSE INFORMATION / DATA SOURCES
(Weather / Medical Info / Finance / Agriculture / Industrial)
Ad hoc
Search
K
NOWLEDGE
C
REATION
K
NOWLEDGE
U
TILIZATION
JUN
1
5
A
Comprehensive
View to
Knowledge
Repository

11-28
Approaches to
 Developing a knowledge repository
 Knowledge repositories are developed
using several different storage mechanisms
in combination
 The most important aspects and difficult
issues are making the contribution of
knowledge relatively easy for the
contributor and determining a good
method for cataloging the knowledge

11-29
Information Technology (IT) in
 The KMS cycle
 KMS usually follow a six-step cycle:
1. Create knowledge
2. Capture knowledge
3. Refine knowledge
4. Store knowledge
5. Manage knowledge
6. Disseminate knowledge

11-30
Capture
Knowledge
Refine
Knowledge
Store
Knowledge
Manage
Knowledge
Disseminate
Knowledge
Create
Knowledge
1
2
3
4
5
6
The Cyclic Model
of Knowledge
Management

11-31
 Components of KMS
 KMS are developed using three sets of core
technologies:
1. Communication
2. Collaboration
3. Storage and retrieval
 Technologies that support KM
 Artificial intelligence
 Intelligent agents
 Knowledge discovery in databases
 Extensible Markup Language (XML)

11-32
 Artificial intelligence
 AI methods used in KMS:
 Assist in and enhance searching knowledge
 Help for knowledge representation (e.g., ES)
 Help establish knowledge profiles of individuals
and groups
 Help determine the relative importance of
knowledge when it is contributed to and
accessed from the knowledge repository

11-33
 AI methods used in KMS:
 Scan e-mail, documents, and databases to
perform knowledge discovery, determine
meaningful relationships and rules
 Identify patterns in data (usually through neural
networks and other data mining techniques)
 Forecast future results by using data/knowledge
 Provide advice directly from knowledge by using
neural networks or expert systems
 Provide a natural language or voice command–
driven user interface for a KMS

11-34
 Intelligent agents
 Intelligent agents are software systems
that learn how users work and provide
assistance in their daily tasks
 They are used to elicit and identify
knowledge
 See ibm.com, gentia.com for examples
 Combined with enterprise knowledge portal
to proactively disseminate knowledge

11-35
 Knowledge discovery in databases
(KDD)
A machine learning process that
performs rule induction, or a related
procedure to establish (or create)
knowledge from large databases
 a.k.a. Data Mining (and/or Text Mining)

11-36
 Model marts
Small, generally departmental repositories of
knowledge created by employing knowledge-
discovery techniques on past decision
instances. Similar to data marts
 Model warehouses
Large, generally enterprise-wide repositories
of knowledge created by employing
knowledge-discovery techniques. Similar to
data warehouses

11-37
 Extensible Markup Language (XML)
 XML enables standardized representations of
data structures so that data can be
processed appropriately by heterogeneous
information systems without case-by-case
programming or human intervention
 Web 2.0
 The evolution of the Web from statically
disseminating information to collaboratively
creating and sharing information

11-38
KM System Implementation
 Knowledge management products and
vendors
 Knowware
Technology tools (software/hardware products)
that support knowledge management
 Software development companies / vendors
 Collaborative computing tools
 Knowledge servers
 Enterprise knowledge portals (EKP)
An electronic doorway into a knowledge management
system…

11-39
 Software development companies / vendors
 Electronic document management (EDM)
A method for processing documents
electronically, including capture, storage,
retrieval, manipulation, and presentation
 Content management systems (CMS)
An electronic document management system
that produces dynamic versions of documents,
and automatically maintains the current set for
use at the enterprise level

11-40
 Software development tools
 Knowledge harvesting tools
 Search engines
 Knowledge management suites
 Knowledge management consulting firms
 Knowledge management ASPs

11-41
KMS Implementation
 Integration of KMS with other business
information systems
 With DSS/BI Systems
 With AI
 With databases and information systems
 With CRM systems
 With SCM systems
 With corporate intranets and extranets

11-42
Roles of People in
 Chief knowledge officer (CKO)
The person in charge of a knowledge
management effort in an organization
 Sets KM strategic priorities
 Establishes a repository of best practices
 Gains a commitment from senior executives
 Teaches information seekers how to better elicit it
 Creates a process for managing intellectual assets
 Obtain customer satisfaction information
 Globalizes knowledge management

11-43
Roles of People in
 Skills required of a CKO include:
 Interpersonal communication skills
 Leadership skills
 Business acumen
 Strategic thinking
 Collaboration skills
 The ability to institute effective educational
programs
 An understanding of IT and its role in advancing
knowledge management

11-44
Roles of People in
 The CEO, other chief officers, and managers
 The CEO is responsible for championing a
knowledge management effort
 The officers make available the resources needed
to get the job done
 CFO ensures that the financial resources are available
 COO ensures that people begin to embed knowledge
management practices into their daily work processes
 CIO ensures IT resources are available
 Managers also support the KM efforts by providing
access to sources of knowledge

11-45
Roles of People in
 Community of practice (CoP)
A group of people in an organization
with a common professional interest,
often self-organized for managing
knowledge in a knowledge management
system
 See Application Case 11.7 as an example of
how Xerox successfully improved practices
and cost savings through CoP

11-46
Roles of People in
 KMS developers
 The team members who actually develop
the system
 Internal + External
 KMS staff
 Enterprise-wide KMS require a full-time
staff to catalog and manage the knowledge

11-47
Ensuring the Success of
Knowledge Management Efforts
 Success stories of knowledge management
 Implementing a good KM strategy can:
 Reduce…
 loss of intellectual capital
 costs by decreasing the number of times
the company must repeatedly solve the
same problem
 redundancy of knowledge-based activities
 Increase…
 productivity
 employee satisfaction

11-48
 MAKE: Most Admired Knowledge Enterprises
“Annually identifying the best practitioners of KM”
 Criteria (performance dimensions):
1. Creating a knowledge-driven corporate culture
2. Developing knowledge workers through leadership
3. Fostering innovation
4. Maximizing enterprise intellectual capital
5. Creating an environment for collaborative knowledge sharing
6. Facilitating organizational learning
7. Delivering value based on stakeholder knowledge
8. Transforming enterprise knowledge into stakeholders’ value

11-49
 MAKE: Most Admired Knowledge Enterprises
“Annually identifying the best practitioners of KM”
 2008 Winners:
1. McKinsey & Company
2. Google
3. Royal Dutch Shell
4. Toyota
5. Wikipedia
6. Honda
7. Apple
8. Fluor
9. Microsoft
10. PricewaterhouseCoopers
11. Ernst & Young
12. IBM
13. Schlumberger
14. Samsung Group
15. BP
16. Unilever
17. Accenture
18. …

11-50
 Useful applications of KMS
 Finding experts electronically and using
expert location systems
 Expert location systems (know-who)
Interactive computerized systems that help
employees find and connect with colleagues
who have expertise required for specific
problems—whether they are across the county
or across the room—in order to solve specific,
critical business problems in seconds

11-51
 Knowledge management valuation
 Financial metrics for knowledge
management valuation
 Focus knowledge management projects on
specific business problems that can be easily
quantified
 When the problems are solved, the value and
benefits of the system become apparent

11-52
 Knowledge management valuation
 Nonfinancial metrics for knowledge
management valuation—new ways to view
capital when evaluating intangibles:
 Customer goodwill
 External relationship capital
 Structural capital
 Human capital
 Social capital
 Environmental capital

11-53
 Causes of knowledge management failure
 The effort mainly relies on technology and
does not address whether the proposed
system will meet the needs and objectives of
the organization and its individuals
 Lack of emphasis on human aspects
 Lack of commitment
 Failure to provide reasonable incentive for
people to use the system…

11-54
 Factors that lead to knowledge
management success
 A link to a firm’s economic value, to
demonstrate financial viability and maintain
executive sponsorship
 A technical and organizational
infrastructure on which to build
 A standard, flexible knowledge structure to
match the way the organization performs
work and uses knowledge

11-55
management success
 A knowledge-friendly culture that leads
directly to user support
 A clear purpose and language, to
encourage users to buy into the system
 A change in motivational practices, to
create a culture of sharing
 Multiple channels for knowledge transfer

11-56
management success
 A significant process orientation and
valuation to make a knowledge
management effort worthwhile
 Nontrivial motivational methods to
encourage users to contribute and use
knowledge
 Senior management support

11-57
Last words on KM
 Knowledge is an intellectual asset
 IT is “just” an important enabler
 Proper management of knowledge is a
necessary ingredient for success
 Key issues:
 Organizational culture
 Executive sponsorship
 Measurement of success

11-58
End of the Chapter
 Questions / comments…

11-59
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall

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