The document provides a comprehensive overview of knowledge management (KM), defining it as the systematic management of vital knowledge within an organization. It highlights the importance of both tacit and explicit knowledge, discusses the challenges and strategies for implementing KM, and compares the approaches in the U.S. and China. Various case studies illustrate the significant benefits and potential pitfalls of KM initiatives in different organizations.

1. Knowledge Management
Knowledge Management
1
TRI SUCI HANDAYANI
SISTEM INFORMASI
SAINS DAN TEKNOLOGI
UNIVERSITAS ISLAM NEGERI SULTAN SYARIF KASIM RIAU
http://sif.uin-suska.ac.id/
http://fst.uin-suska.ac.id/
http://www.uin-suska.ac.id/

2. Knowledge Management
What is Knowledge Management?
2
“Knowledge Management is a waste of money. Organizations
spend billions of dollars in their efforts to cut a corner or two
resulting in just a fraction of savings”
Richard Sapio
CEO, Mutual Capital Alliance
(8)

3. Knowledge Management
Agenda
3
Knowledge
Management
Key Concepts
KM in the Army Implementation &
Maintenance
KM in China
What is KM?
Questions/
Discussion
Other KM
Cases
PwC, LRC
Summary

4. Knowledge Management
What is Knowledge Management?
4
Common Knowledge Management Definitions
(just a few of the many)
Discipline within an organization that ensures that the intellectual
capabilities of that organization are shared, maintained and
institutionalized
The process of systematically and actively managing and
leveraging the stores of knowledge in an organization
The way a company stores, organizes and accesses internal and
external information.
Refers to an entire integrated system for accumulation,
integration, manipulation, and access of data across multiple
organizations
(9),(10)

5. Knowledge Management
What is Knowledge Management?
Knowledge Management is the explicit
and systematic management of vital
knowledge - and its associated processes
of creation, organization, diffusion, use and
exploitation.
5(9),(10)

6. Knowledge Management
Knowledge Hierarchy
Tacit
– This type of
knowledge exists in
people’s heads, not
articulated or
documented
6
Knowledge Management
Tacit Knowledge Explicit Knowledge
Knowledge
Information
Data
Explicit
– This type of knowledge can be
» Processed by information
systems
» Codified and recorded
» Archived and protected

7. Knowledge Management
7
Knowledge assets have often become more important to companies than
financial and physical assets and are often the only way for a company to
distinguish itself from its competitor & gain competitive advantage
Lost knowledge given the enormous of baby boomers that will be changing jobs
or retiring in next few years cause productivity cost of an employee leaving 85%
of their base salary due to their replacement’s mistakes, lost knowledge and
lost skill( Beazley et al, 2002)
Relate to the concept of knowledge half-life, from which it is found that
knowledge reaches obsolescence, on average, in 500 days, but can be much
quicker in some areas
- Lost knowledge obviously has a cost, estimated that $115 billion sits idle in
lost knowledge affiliated with production technologies
- An astounding example of this is the loss of the original computer source
code, written in the 1950’s, that spawned the Y2K software crisis, has cost
businesses worldwide an estimated $1 trillion (Petch, 1998)
KM Significance
(25)

8. Knowledge Management
People and Systems
People
Knowledge Teams - multi-disciplinary, cross-functional
Learning Organization - personal/team/org development
Corporate Initiatives – Chief Knowledge Officer
Systems
Knowledge Data-bases - experts, best practice
Knowledge Centers - hubs of knowledge
Technology Infrastructure - Intranets, Domino
Document Management
8(9),(12)

9. Knowledge Management
Two Key Thrusts
9
Sharing existing knowledge
“Knowing what you know”
Knowledge for Innovation
“Creating and Converting”
(9)

10. Knowledge Management
Knowledge Cycle
10
Create
Product/
Process
Innovation Cycle KM Cycle
Knowledge
Repository
Codify
Embed
Diffuse
Identify
Classify
AccessUse/Exploit
Collect
Organize/
Store
Share/
Disseminate

11. Knowledge Management
Seven Levers
Customer Knowledge - the most vital knowledge
Knowledge in Products - ‘smarts’ add value
Knowledge in People - but people ‘walk’
Knowledge in Processes - know-how when
needed
Organizational Memory - do we know what we
know?
Knowledge in Relationships - richness and depth
Knowledge Assets - intellectual capital
11(9)

12. Knowledge Management
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Implementing and Maintaining KM
KM
Who’s Responsible?
Why Implement KM?
IT’s Role in Implementing
Maintaining KMS
Strategy for Implementing

13. Knowledge Management
Why Implement KMS?
IBM, Oracle, Cisco
– Measure intranet value at over $1 billion
BT, UK telecommunications company
– Employee ideas have saved £100 million
Sodexho’s SuperSleuth
– Cash reward for employees submitting
sales leads
– Led to over $90 million in sales volume
13(20)

14. Knowledge Management
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Smaller companies, who often claim that they can’t afford
to undertake KM activities, are wrong on two counts!
1.Knowledge is just as important, if not more so, to a smaller company
trying to compete in the rapidly changing global marketplace. Smaller
companies must capture, assimilate, and capitalize on every
advantage they can find, including KNOWLEDGEKNOWLEDGE
2.Smaller firms have the advantages from Culture and Organizational
structure in place that is much more conducive to implementing
knowledge management effort such as type of environment, which is
predicated more on social relationship, familiarity and trust between
employees
A little Knowledge that acts is worth more than much knowledge that isA little Knowledge that acts is worth more than much knowledge that is
idle.(Kahlil Gibran)idle.(Kahlil Gibran)
Common Misconceptions
(25)

15. Knowledge Management
Who’s Responsible?
Everyone:
–Managers/Supervisors
» Leaders as knowledge champions
–The Knowledgeable
» Not a problem of knowing, but of access
–End Users
» Feedback
» Psychological barriers
15(13), (14)

16. Knowledge Management
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Role of IT in Implementation
“The biggest contributor to this brilliant growth of the
knowledge management system is information technology.”
Lee et al. also say, “...there are negative perspectives about
information technology.”
According to a managing partner at a KM consultancy firm
based in New York, “The biggest misconception that IT
leaders make is that knowledge management is about
technology...Usually people begin a KM project by focusing
on the technology...But the key is people...”
(15),(16)

17. Knowledge Management
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Strategy for Implementing KM
The MeCTIP model
(19)

18. Knowledge Management
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Strategy for Implementing KM
Macro-environment
– External Factors
» Globalization
» Technology
» E-companies
(19)

19. Knowledge Management
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Strategy for Implementing KM
Organizational Climate
– Structure
» Formal Structures
Cross-functional project
groups
Cross-discipline learning
groups
» Informal Structures
Grapevine/Underground
Cliques
– Strategy/Goals
– Culture
(19)
The difference between, “...what is formally
agreed and what actually takes place.”

20. Knowledge Management
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Strategy for Implementing KM
Technical Climate
– Infrastructure
– Response to change
Resistance to
change/Conflict
– Listen to negative
feedback
– Conflict leads to
improved ideas
(13),(19)

21. Knowledge Management
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Strategy for Implementing KM
Technical
– System
Standardization
– Compatibility
– Usability
(13),(19)

22. Knowledge Management
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Strategy for Implementing KM
Informational
– Info fatigue
– Infofamine
– Infoglut
» According to Lee et al,
“...users do not know
how to utilize effectively
the vast pool of
information.”
(16),(19)

23. Knowledge Management
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Strategy for Implementing KM
Personal
– Knowledge roles
– Motivation
– Learning networks
(19)

24. Knowledge Management
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Maintaining KM Systems
Provide Adequate Access
– Intranets
– Classes
Psychological Barriers
– Ook Lee study
» 103 questionnaires from Korean KMS users
» 93 respondents were reluctant to say that a knowledge
management piece was not valid
(17)

25. Knowledge Management
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Maintaining KM Systems
Use it or lose it
– Cook compares KMS to draining battery
Share knowledge
– Knowledge is individual power, not group power
Removing knowledge “constipation”
– Crowded closet
(13)

26. Knowledge Management
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Maintaining KM Systems
Incentives
– Financial
– Big Idea
– Pub Money
Organizational Sociology
– Know your audience
Be flexible
– “No single recipe” for success
(13)

27. Knowledge Management
The Difference of Knowledge
Management in US and CHINA
27

28. Knowledge Management
Cultural Factors Impacting knowledge Management
Internationalization creates a need to know
how peoples in different countries to apply
knowledge management.
People from the United States and China
have a distinctive prevailing decision style that
reflects differences in cultural values
28(4)

29. Knowledge Management
Why they express happiness differently
29

30. Knowledge Management
American Chinese
Extroverted, encouraged to express
and to show feelings
Introverted , not encouraged to show
emotions,
Emphasis is placed on the individual
and independence. Society is a
collection of individuals
Emphasis is placed on the society and
the role of the person in the social fabric
Rules and Regulations are written broad
but what is written is enforced very
strictly
Rules and Regulations are written very
strictly but enforcement is selective
The difference of American and Chinese in personal character
30(2), (3)

31. Knowledge Management
The different ways in deal with gift
Presents are
usually
opened in
front of the
giver
Presents
are usually
opened in
private
31

32. Knowledge Management
The difference of U.S. and CHINA in Knowledge management
U.S. CHINA
View of
knowledge
Explicit and measurable Largely tacit and contextual
Key
assumption
Knowledge is mostly
objective and can be made
explicit
Knowledge includes both objective and
subjective element
Knowledge
management
role
Knowledge workers
capture, codify , and share
knowledge from experience
Senior manager are responsible for
knowledge management
Communicati
on process
collection, distribution,
reuse, and measurement of
existing codified knowledge
and information in whole
organize
One-way flow of information (from
superior to subordinate) and by
guanxi net
32(5)

33. Knowledge Management
“guanxi” in China
Social ties -- interaction frequency, degree of
intimacy and trust
It’s not what you know, it’s who you know.
Business guanxi (personal relationships in
Chinese market)
Government guanxi (personal relationships
with government officials in different levels
and bureaus).
33(5)

34. Knowledge Management
Could we combine
two styles of
knowledge into
an integral whole
34

35. Knowledge Management
In the international work group, people need to know
how to combine different knowledge into an integral
whole. To achieve this goal we should understand
the knowledge creation process
35(5)

36. Knowledge Management
The knowledge creation process
36(1)

37. Knowledge Management
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Knowledge Management in Practice

38. Knowledge Management
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PwC: The PricewaterhouseCoopers Law Firm & Law Department Service Group
The World’s largest professional service organization:
Service and Help general counsel and law firm executive management solve
complex business problems
Measurably enhance their ability to build sustainable shareholder value
Manage Risk
Improve quality and performance by providing services based on quality and
integrity
PwC includes the member firms of PricewaterhouseCoopers International Ltd.,
PricewaterhouseCoopers
(21)

39. Knowledge Management
39
Helping corporate law departments and their outside counsel
reduce their research costs and efficiently manage their legal
knowledge for nearly 25 years
Remain the nation’s premier provider of outsourced legal
research, KM, and compliance e-training services
Culturally committed to operational excellence
Customer intimacy and product/service innovation
LRC: Legal Research Center
(21),(22)

40. Knowledge Management
The Study
In 2003, Florida Legal Technology Institute Study
Reviewed the marriage between PwC and LRC,
catalog the advantages of KM in PwC law firms and
departments
KM Study with 348 legal professionals around the
world (law departments and outside law firms)
+ =
40

41. Knowledge Management
PwC and LRC KM Study Results Announced
70% of law firm respondents and 63% of Law Dept. respondents reported
having KMS in place indicated that they use KMS either “frequently” or “all
the time”
The survey indicated that their KM program either meets or exceeds their
targeted ROI
85% of the law firms
78% of the law dept.
The Avg. budget to support KM initiative was reported at 4.7% of the total
legal spend.
Quality, speed and cost containment are what a majority of legal
professionals are seeking from their KM solution providers.
The most common standards to measure the value of KM programs are
productivity enhancement and cost reduction.
41(21),(22)

42. Knowledge Management
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Legal professionals are increasingly cognizant of the value of KMS that
retrieve information from multiple sources and locations. 82% said they
would be more efficient if their KM solution could access legal knowledge
in multiple formats from multiple resources.
The majority of legal professionals surveyed believe that research
redundancy, the reduction of which is a key goal of KM, is caused by lack
of communication inside the firm or law dept., and by the lack of incentives
to motivate knowledge reuse and eliminate redundant research
“With the ever – increasing volume and types of information available, KM isWith the ever – increasing volume and types of information available, KM is
more critical than ever. This study provides compelling data on the valuemore critical than ever. This study provides compelling data on the value
and important of KMS. KM is an essential ingredient for efficient andand important of KMS. KM is an essential ingredient for efficient and
effective delivery and management of legal services.”effective delivery and management of legal services.” (Jonathan Bellis)
(21),(24)
PwC and LRC KM Study Results Announced (cont.)

43. Knowledge Management
Charles Lucier, Chief Knowledge Officer at International
management and technology consulting firm said up to
84% of all KM programs fail.
A global bank spanning 70 countries abandoned their KMS
before it was ever rolled out.
A European manufacturing company successfully implemented
a KMS, but it was rarely used.
A pharmaceutical company implemented a KMS that could not
be easily adapted to specific context of each work group
43(21), (26)
When Knowledge adds up to nothing

44. Knowledge Management
Many companies find that their departments have different takes on
what the project means or what it is trying to achieve
Many KM program leaders are ignorant when it comes to the
“complexity of these micro-political processes”
Even though some firms are implementing KM programs with support
from senior management, it can still fail as a result of lack of support
Some organizations do not achieve adequate ROI from KM as they
are failing to measure effectively
Many companies professed to suffer from “information overload” and
a shortage of time with which to both share and utilize knowledge
Many firms rely too heavily on consultants who position themselves
in highly influential positions within the organization
Many initiatives fails as they only enjoy superficial support from the
top management
44(21)
Why Knowledge Can add up to nothing --

45. Knowledge Management
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Evidence shows that, despite the potential pitfalls and seemingly high failure
rate, companies are still willing to invest in KM. Why? Because there are big
benefits there for taking.
The results of several surveys met:
 87% of European business directors believe they could enhance their
company’s competitiveness with improved KM and 76% believe Building +
Sharing Knowledge is important for their company.
 Study of 500 firms conducted by KPMG illustrated 80% of senior executives feel
that KM is strategic to their organization and 78% feel they have missed business
opportunities.
 Hoffmann-Roche, the Swiss pharmaceutical firm, has estimated that it saves over
$1 million per day due to its KM activities
 BP Amoco attributed $260 million in bottom-line savings to a KM program
(23)
Knowledge Management Success

46. Knowledge Management
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 Energy firm Schlumberger Ltd. reported an estimated 668% ROI on a $72 million
investment in KM over a period of six years
 Chevron Corporation estimates that it saved an initial $150 million, plus at least
another $20 million annually by instituting a best practices program
 Teltech Communications, a firm that specializes in aiding companies to implement
knowledge management programs, reports that its clients enjoy an average ROI of
12:1 for their efforts
 In a survey carried out by Information Week , IT executives said they considered
KM a strategic initiative of high importance, and KM spend is to climb at 62% of the
IT institutions surveyed
 Hewlett-Packard’s knowledge efforts aimed at customer service have reduced
average call times by two-thirds and the cost per call has fallen by 50 percent
(21),(23),(25)
Knowledge Management Success (Cont.)

47. Knowledge Management
Keys to successful KM
As is the case with many new practices in workplace:
Getting employees on board from day one and making sure they realize
exactly how KM program is to impact on their routines and bring benefits
for the organization as a whole is pivotal
Make sure KM becomes a fundamental aspect of the way you do business
Be sure your KM implementation is less about reporting and more about
sharing knowledge
“Knowledge is a company asset, hidden, until the knowledge worker releases it.
The key to generating the best returns from your KM Program is to implement a
well-planned methodology and ensure that your organization facilitates this release
of information.”
-Mike Bagshaw, Development Director at Trans4mation Training Ltd,
47(24)

48. Knowledge Management
48
Army Knowledge Management

49. Knowledge Management
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50. Knowledge Management
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“It is the Army’s goal to deliver critical capabilities to the
warfighter, and oversee the development of a knowledge-
based workforce”
LTC William Nelson
Deputy Director GA & CKO
(Governance, Acquisition and Chief Knowledge Office)
Army Office of CIO/G-6
Army Knowledge Management
(7)

51. Knowledge Management
51
Army Knowledge Management
Development of Army IM/IT and KM
Coordination between Combatant Commands and
Joint Staff, components and agencies, etc…
Serves as the focal point for management and
integration with IM/IT
Oversees the acquisition of IM/IT and KM
solutions
(7)

52. Knowledge Management
KM is a Journey, not a destination.KM is a Journey, not a destination.
(Warick Holder)
Knowledge resides in the users and not in the collection.Knowledge resides in the users and not in the collection.
(Y. Maholtra)
Successful knowledge transfer involves neitherSuccessful knowledge transfer involves neither computerscomputers nornor
documentsdocuments but ratherbut rather interactionsinteractions betweenbetween peoplepeople!!!!
(Mason & Mitroff; 1973)
52

53. Knowledge Management
Summary
Key Concepts of KM
– Explicit Knowledge
– Tacit Knowledge
Implementation, Maintenance
China
KM cases, advantages and disadvantages
Army KM
53