© 2001-2003 Franz J. Kurfess KM in Organizations 1 CPE/CSC 580: Knowledge Management Dr. Franz J. Kurfess Computer Science Department Cal Poly

© 2001-2003 Franz J. Kurfess KM in Organizations 1

CPE/CSC 580: Knowledge Management

CPE/CSC 580: Knowledge Management

Dr. Franz J. Kurfess

Computer Science Department

Cal Poly


Course OverviewCourse Overview Introduction Knowledge Processing

Knowledge Acquisition, Representation and Manipulation

Knowledge Organization Classification, Categorization Ontologies, Taxonomies,

Thesauri

Knowledge Retrieval Information Retrieval Knowledge Navigation

Knowledge Presentation Knowledge Visualization

Knowledge Exchange Knowledge Capture, Transfer,

and Distribution

Usage of Knowledge Access Patterns, User Feedback

Knowledge Management Techniques Topic Maps, Agents

Knowledge Management Tools

Knowledge Management in Organizations


Overview KM in OrganizationsOverview KM in Organizations

Motivation Objectives Evaluation Criteria Historical Perspective

Ad Hoc KM Organized KM KM and Computers

Current Trends and Tendencies Status of KM in Organizations Plans for KM in Organizations

Knowledge Workers and Knowledge Organizations Industrial vs. Knowledge Age Mutual Benefits for Workers

and Organizations

Important Concepts and Terms

Chapter Summary


LogisticsLogistics

Introductions Course Materials

textbook handouts Web page CourseInfo/Blackboard System and Alternatives

Term Project Lab and Homework Assignments Exams Grading


MotivationMotivation


ObjectivesObjectives


Evaluation CriteriaEvaluation Criteria

coordinated, organized effort acquisition, collection, organization, storage, interpretation,

evaluation, distribution, maintenancepersistent storage

method, format, mediumtechniques

categorization, indexingtechnology

manual: hand-written, drawings, artifacts

mechanical: typewriter, punch cards, photographs, duplication

computer: storage, retrieval, organization, evaluation


Pre-HistoricPre-Historic

no written language drawings, icons for storage purposes

spoken language main method for collection, organization, distribution of

knowledge

coordinated KM very difficult very limited common representation scheme very limited systematic collection, organization and

distribution methods mostly dependent on individual/small group effort


AntiquityAntiquity

written language systems persistent storage for documents duplication and distribution of documents possible, but

tedious

limited coordination efforts for KM systematic collection and organization

record keeping, libraries

coordination mostly by governments substantial overhead


GutenbergGutenberg

efficient duplication system printing press allows mass-production of documents greater distribution of knowledge

somewhat extended KM efforts coordination by governments and other organizations

churches, local entities, land and property owners


Industrial AgeIndustrial Ageemergence of large-scale organizations

mass production of goods administration of large constituencies

requires efficient knowledge management administrative systems

coordination of resources, materials; distribution of products internal information flow; record keeping

paper-based office storage and distribution of documents

new technologies typewriters, stencil duplicators, vertical files, telephones,

photography

[Black & Brunt 2000]


Effects on KMEffects on KM

systematic, planned knowledge and information management

complex, dedicated information systems based on human labor and paper as storage medium

“manual” information technology

requires precise methods and processes rational, planned system of

registration, filing, indexing

support for strategic planning usage of gathered information extraction of knowledge



Manual KM is OnerousManual KM is Onerous

usually based on central repositoriesevery document received must be

numbered recorded categorized filed

several indexes must be generated usually dependent on the purpose

e.g. people, places, subjects

placeholders for temporarily removed documents “transit cards”



Problems with Manual KMProblems with Manual KM

organization methods alphabetical or subject-based indexing

sloppy work incorrect categorization incomplete indices

uncontrolled vocabulary spelling variations,

efficiency delays in processing files

tracking of information distributed across files



KM and the Yorkshire RipperKM and the Yorkshire Ripper

information available files of suspects

in the West Yorkshire police station (coordinators) contains the file of the murderer

links between murderer and victims a list of individuals who could have received in their wages a bank

note found on one of the victims the list contained the name of the murderer

utilization of information no match was made between the files of suspects and the

list of individuals why?





based on data collected by the Harris Research Centre in Spring 1998 on behalf of KPMG Management Consulting

sample covered 100 leading UK companies

[KPMG 1998]


Relevance of KnowledgeRelevance of Knowledge

for many organizations, what they know becomes more important than traditional sources of economic power capital, land, facilities, labor

competitive advantage through knowledge-based competencies technological know-how product design skills problem solving expertise creativity ability to innovate

[KPMG 1998]


Risks of Knowledge LossRisks of Knowledge Loss

knowledge of best practice in important areas of operation

damage to relationships with key clients or suppliersloss of income

[KPMG 1998]


Most Critical Knowledge TypesMost Critical Knowledge Types

knowledge about customersmarketsproducts and servicescompetitorsskills of employees

[KPMG 1998]


Impediments Impediments

people want to share knowledge but don’t have the time

wasted efforts through re-inventing the wheellack of rewards and incentivesrelatively few people

are unwilling to share knowledge or best practice think there is too much knowledge

[KPMG 1998]


Driving Needs for KMDriving Needs for KM

almost exclusively financial considerations improving profits defending market share against competitors cost reduction growing revenue

[KPMG 1998]


Possible Benefits of KMPossible Benefits of KM

conventional (budget-focused) better decision making faster response time to key issues improved productivity reduced costs increased profit

others new business opportunities better staff retention

[KPMG 1998]


Technological InfrastructureTechnological Infrastructure

Internet accessintranetsdocument management systemsgroupwaredata warehousing, data miningdecision support systemsextranets

[KPMG 1998]

© 2001-2003 Franz J. Kurfess KM in Organizations 27[KPMG 1999]

Survey BackgroundSurvey Background

Objective Establish the extent to which companies regard knowledge

management as important and pursue initiatives to implement and master it

Target group Mid- to large-size companies from a variety of industries.

The research was conducted among chief executives, business unit managers, product managers, marketing managers and R&D managers

Questionnaire Data from 25 companies was processed


Definitions for the SurveyDefinitions for the Survey

Knowledge the knowledge in the business about customers, products,

processes, competitors and so on

Knowledge management the discipline of capturing knowledge-based competencies,

storing and disseminating them for the benefit of the organization.

[KPMG 1999]


Respondents’ Profile

Size responding organizations

24%24%

20%20%

12%12%

28%28%

16%16% 1-500

501-5.000

5.001-25.000

25.001-100.000

>100.000

[KPMG 1999]

Average size respondents +/- 35.000 people. Representative sample of 25 mid- to large- size companies.



8 8

12

16 16

12 12

8 8

0

2

4

6

8

10

12

14

16

18%

Bus/Fin Services

Retail& Dist.

IT Telecom Elec-tronics

Chem. & Food

Engi-neering

Energy Other

[KPMG 1999]

Respondents were from various industries.



Companies perceived their KM position as:

Leading

Intermediate

Lagging behind

[KPMG 1999]

16%16%

60%60%

24%24%


Major Issues

0 10 20 30 40 50 60 70 80 90 100%

Costs/Productivity

Quality

Innovation

Alliances/Networking

Flexibility

Time to market / Responsiveness

Outsourcing

[KPMG 1999]

In line with the expected key changes and issues, more effective management of knowledge is required in the near future (84%).

Only 4% of respondents regard current level of managing knowledge appropriate.


Still a Long Way to Go...

Information transformed into knowledge

New ideas are stimulated

Knowledge-creation is structured process

Knowledge is available at right places

Mistakes used as learning experience

Improvement o.b.o. experiences and best practicesKnowledge is re-used

(not re-inventing the wheel)People's competencies are mapped

No overflow of information

Sufficient time to share knowledge

Willingness to share knowledge

2 3 41

True FalseSlightlyTrue

SlightlyFalse

[KPMG 1999]

Most companies acknowledge that managing knowledge can be improved for a wide range of aspects.


IT Infrastructure & Software IT infrastructure and software used to collect, share and analyze information

0 10 20 30 40 50 60 70 80 90 100%

Expert/Decisionsupport software

ERP

Workflow software

Groupware

Database/DocumentManagement System

Extranet

Intranet

Internet

[KPMG 1999]

Internet, intranet, databases and groupware are used by more than 50% of the respondents

workflow software is rarely used


KM Initiatives

36%36%

32%32%

32%32% Neither in place,nor preparing

Preparing/Investigating

In place

[KPMG 1999]


Reasons for KM Initiatives

0 10 20 30 40 50 60 70 80%

Other

To improve staff attitude/morale/competencies

To improve potential forinnovation

To improve market performance

To execute a strategic direction

To improve communicationand decision-making

[KPMG 1999]

Other key motives touch upon innovation potential, market performance or a strategic direction.


Coverage of KM Initiatives

0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1

Processes/jobs affected by the initiative

Incentives changed to stimulate knowledge

Special people appointed to manage knowledge

Workflow linked to knowledge database

Formats defined for meaningful presentation of data

Processes defined for info gathering/maintenance

Information needs, flows and owners are clear

Budget allocated

Knowledge management strategy with objectives

Initiative embedded inbusiness plan

Yes

No

Don’tknow

[KPMG 1999]

Initiatives often lack direction (44%), Unclear understanding of info needs, flows, owners (50%), No use of stimulating incentive schemes (56%) and No link between workflow and databases (69%)


Bottlenecks for KM Implementation

0 10 20 30 40 50 60 70 80 90 100

Lack of IT support

Lack of KM techniques/tools

Hierarchical organizational structure

Emphasis on short term results

Lack of true teamwork

Too little time to share information

Current culture does not encourage knowledge sharing

Lack of funds

Lack of commitment senior management

KM is no top priority

Lack of understanding of KM and its potential benefits

%

[KPMG 1999]

Major road blocks are a lack of understanding, interest, patience for results and time for sharing information.


Unfavorable Conditions for KM

… … then don’t start a KM initiativethen don’t start a KM initiative[KPMG 1999]

If this is your company ...If this is your company ...

No commitment or not a priority

Short-term focus

Insufficient understanding of KM

Overtaxed organization/no time

© 2001-2003 Franz J. Kurfess KM in Organizations 45[KPMG 1999]

KM is Like Building a House...KM is Like Building a House...

The fundament of KM represents a set of Behavioral/Structural Conditions

The walls of KM represent a set of Operational Conditions The roof of KM represents the corporate knowledge by which

learning, innovation, speed and productivity will be enhanced


HOW?Performance

metricsScience

workshopsTechnology

exchange networks

Extra budget

HOW?Performance

metricsScience

workshopsTechnology

exchange networks

Extra budget

Open, sharing culture

KNOWLEDGE

KNOWLEDGE

SHARING

SHARING

Non-sharing culture

TEAMWORK

TEAMWORK

COMMITMENTCOMMITMENT

ORGANISATION STRUCTURE & ORGANISATION STRUCTURE & PROCESSESPROCESSES

[KPMG 1999]

Rewards and Incentives Rewards and Incentives


Separate information

systems

InformationInformationResearch Research

ProcessProcess

Enabling Enabling TechnologiesTechnologies

UpgradingUpgradingOf Existing Of Existing KnowledgeKnowledge GenerationGeneration

Of New Ideas Of New Ideas

Integrated Information

SystemHOW?Database

technologyGroupwareWeb

technologyUser-interface

technologyIntranet

HOW?Database

technologyGroupwareWeb

technologyUser-interface

technologyIntranet

[KPMG 1999]

Integrated SystemsIntegrated Systems


KM Behavioral and Structural Components

Preparing initiative Initiative in place

not i

n pl

ace

star

ting

adva

nced

real

ized

1 2 3 4

Hierarchical organization

Process-orientedorganization

Power culture

Open & sharing culture

Focus onindividual

success

Focus on group

success

No understandingof KM

Top management commitment

2,3

2,0 2,1

1,9

[KPMG 1999]

On the behavioral/structural axis, there is still enough improvement potential.


KM Operational Components

Preparing initiative Initiative in place

not i

n pl

ace

star

ting

adva

nced

real

ized

1 2 3 4

Knowledge stored mentally and physically

Integrated databases linkedwith workflow

Ad-hoc knowledge

creation

Structured,strategic

knowledgecreation

Ad-hoc datacollection

2,1

2,0

2,1

Professional researchmethods

Knowledgesupporting

decision-making

Non-customizeddata

1,9

[KPMG 1999]

A quick fix is not possible for the implementation of KM. Step by step, the KM performance should be improved.


Mixed Feelings about KM Benefits

Overall satisfying results?

37%

13%

50% Yes

No

Don't know

(*) KM initiative in place0 10 20 30 40 50 60 70 80%

Improved staffmorale/attitude

Enhancedcommunication &decision making

Increased potentialfor innovation

Improvedmarket performance

Perceived benefits

Reason to launch initiative

[KPMG 1999]

Too early or difficult for 50% to judge whether overall results are satisfying.

Improved communication & decision making is not (yet) proven. Improved staff morale/commitment is a welcomed spin-off.


Knowledge-Intensive OrganizationsKnowledge-Intensive Organizations

tacit knowledge is one of the critical assetssince tacit knowledge is difficult to capture, people

become very important assets such organizations are vulnerable because people are

mobile

core activities are difficult or impossible to automate rely on problem solving, experience, communication,

creativity, innovation, intuition, …

success is not only based on financial criteria but what are the other criteria?

[Haak & Deprez 1999]


Industrial vs. Knowledge Organizations

Industrial vs. Knowledge Organizations

Industrial Organization bottom-heavy

asset rich, brain poor pyramid shape

rigid structure assignment of workers to

departments depends critically on middle

management levels changes through verdict

straightforward valuation three production factors: labor,

raw materials, capital well-known valuation methods

Knowledge Organization top-heavy

brain rich, asset poor network of projects, workers

flexible structure assignment of workers to projects little management overhead changes through organizational

learning

valuation is difficult measurement of knowledge-based

assets requires new valuation methods



Industrial vs. Knowledge CompaniesIndustrial vs. Knowledge Companies



Knowledge Worker vs. Knowledge OrganizationKnowledge Worker vs.

Knowledge Organizationsocial issues and changes in the work environment

replacement of workers through computers? adaptation of tasks and responsibilities to the use of

centralized knowledge repositories automated work flow demand-driven work scheduling

release from tedious “data processing” tasks “empowerment” of knowledge workers

assignment of responsibility and authorization to workers instead of managers

availability of critical knowledge to workers



Work Life in the Industrial AgeWork Life in the Industrial Age

jobs “for life”rigid structures within most organizationsslow evolution of skills, technology

little need for individual career planning

employees may possess critical skills and knowledge



Work Life in the Knowledge AgeWork Life in the Knowledge Age

multiple jobs or careers over a life spanflexible structures within and across organizations

e.g. project teams, virtual organizations

more opportunities, but less stability individual career planning becomes much more important

organizations try to incorporate tacit knowledge into organizational memories

employees must utilize experience, creativity, problem-solving and inter-personal skills



Matching Individual and Organizational Needs

Matching Individual and Organizational Needs

Individual independent person

“free agent” open to pursue other

opportunities

ownership of knowledge assets experience technical skills

emphasis on individual career goals professional, personal, social

Organization controllable asset

follows directives replaceable by other

employees

ownership of knowledge assets proprietary information,

knowledge and skills

emphasis on corporate goals financial, political, social



Individual Balanced ScorecardIndividual Balanced Scorecard

approach introduced at KPMG in 1995the objective is to balance the needs of employees with

those of the organizationexplicit process to coordinate business development

plans with personal development plans of employeesrelies on specific categories

may depend on the context of the organizationforms the basis for an agreement between employee and

organization specific goals and targets that are beneficial for the employee

and the organization



KPMG Balanced Individual Scorecard

KPMG Balanced Individual Scorecard



Evaluation perspectivesEvaluation perspectives customer orientation

what can I achieve with my existing clients

market orientation how can I find new clients and strengthen my position

people orientation how can I contribute to better team/group performance

result orientation how can I achieve better results with less effort

personal effectiveness how can I improve weak points and strengthen strong points

professionalism what can I do to keep up with new developments in my area/discipline



KPMG Annual CycleKPMG Annual Cycle



Critical IssuesCritical Issuesdevelopment of the personal plan should be supported by

neutral resources and specialists e.g. “development center” some aspects of the plan may remain confidential

mutual trust between employees and management no punishment for self-critical assessment realistic opportunities for positive results adequate support for assigned tasks

integration of planning activities into regular business cycles scheduled time and resources follow-up



Post-TestPost-Test


Important Concepts and TermsImportant Concepts and Terms organization agent


Summary KM in OrganizationsSummary KM in Organizations


Documents

© 2001-2003 Franz J. Kurfess KM in Organizations 1 CPE/CSC 580: Knowledge Management Dr. Franz J. Kurfess Computer Science Department Cal Poly