What is Knowledge Management?

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Generally, knowledge is interpreted, subjective information within a context, which involves understanding and is mostly tacit, not explicit. Knowledge can take many forms. It can be in the form of thoughts, insights, ideas, lore, lessons learnt, practices, and experiences undergone to name just a few.

The term knowledge management has become common in businesses throughout the world. Despite its increased prevalence, there remains a large degree of confusion concerning the applied definition of what knowledge management is. Within the knowledge management community, attempts at defining this elusive term appear to be in constant flux. However, a basic description of what constitutes knowledge management, and the various factors leading to its importance, source, problems, and other basic related issues necessary to achieve a general understanding have been provided below. This field guide is intended to provide information concerning these issues in terms that are applicable in any situation. Obviously each business has their own sets of definitions, applications and style with respect to this tool.

What is Knowledge Management?*

There are prevalent definitions of knowledge management needing to be highlighted. First, that knowledge management (KM) is the discipline that enables productive generation, retention, sharing and maintenance of knowledge to improve the decision-making process and resulting actions. Alternatively, one can state that knowledge management is the process by which individual learning and experience can be accessed, reflected upon, shared, and utilized in order to foster enhanced individual knowledge and, thus, organizational value. It is an approach to managing thoughts, insights, ideas, lessons learnt, best and worst practices, experiences made available, etc. Managing this knowledge requires that knowledge is captured where it is created, shared between people and applied in business processes. If the culture allows and encourages it, and if technology supports it, then learning will happen. Currently, 85% of organizations said their ability to strategically manage knowledge is weak, 80% said hiring, evaluation, and compensation practices do not take knowledge into account, 70% believe knowledge assets can fuel growth - both revenue and core competencies.

Knowledge spans a continuum ranging from Explicit to Tac...

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Success Stories from Other Companies

While there are many reasons for pursuing knowledge management, many companies cite three main objectives:

1. capturing and transferring internal knowledge and best practices;

2. increasing employee capabilities; and

3. capturing, transferring and using (leveraging) customer and market information.

Demonstrating the rewards to be gained from capturing and sharing internal knowledge and best practices, the following are some knowledge management success stories: *

- Buckman Laboratories – credits much of its 250 percent growth in sales in the past decade to its online knowledge management system

- Texas Instruments – sharing best practices on existing manufacturing locations helped forgo investment in a new $500MM plant

- Chevron – saved $20MM/year by adopting best-managed oil field techniques (via establishing a best practices network)

- Xerox – saved $400MM/year from sharing best practices of acquiring customer intelligence

* Source: APQC Consortium Study

"Creating a Knowledge-Sharing Culture" APQC Consortium Study

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