Chapter 11 Project Management

Chapter 11 Knowledge Management

Jason C. H. Chen, Ph.D.Professor of MIS

School of Business AdministrationGonzaga UniversitySpokane, WA 99258

[email protected]

ã John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 2

What is Data Mining?• Data mining – the process of analyzing data to extract

information (unknown patterns) not offered by the raw data alone

• To perform data mining users need data-mining tools– Data-mining tool – uses a variety of techniques to find

patterns and relationships in large volumes of information and infers rules that predict future behavior and guide decision making

– A wide range of data mining techniques are being used by organization to gain a better understanding of their customers and their operations and to solve complex organizational problems.

• An example– Grocery Store in UK (see next slide)


ProjectDeliveryModel

Customer Relations

Resource Management

Process Management

Project Management

Accounting and other functional areas


_________________IT-Intensive Radical Redesign

_________________________for

“Paradigm Shifts”

Radical Rethinking of the Businessand Organization

for a “World of Re-everything”

“Old World” of Business

E-Worldof Business

___________________Streamlining Bottlenecks

__________________ Replacing humans with

machines

From “Old World” to E-World of Business: Knowledge Management for “Paradigm Shifts”

AUTOMATION

RATIONALIZATION

REENGINEERING

KNOWLEDGE MANAGEMENT


Database vs. Datawarehouse

DBMS Database

DatawarehouseData Mining


Learning Objectives• Understand the difference between data,

information, and knowledge.• Define how tacit knowledge differs from

explicit knowledge.• Describe why knowledge management is so

important.• Understand how knowledge is generated

and captured.• Describe a knowledge map.


Real World Example• Harrah’s found a way to double revenues by collecting

and then analyzing customer data.• They mine their customer data completely.• They use loyalty cards to track customer behavior and to

identify high-revenue customers.• Harrah’s determined that these customers were motivated

by reduced hotel room rates and wanted quick service.• They found ways to reduce lines and wait time.• High-revenue customers rarely waited in any line.• They found ways to keep customers coming back.


COMPETING WITH BUSINESS ANALYTICS


Business Analytics• Business Analytics (BA) is an ________ term including

data ___________, business ____________ , enterprise information management, enterprise performance management, analytic applications, and governance, risk, and compliance.

• Business Intelligence (BI) is a set of ____________ and ___________ used to describe business performance.

• Companies find success through better use of analytics.• Many companies offer similar products and user

comparable technologies.• Business processes are among the last remaining points of

differentiation.• Focus on ____-based management to drive decision

making.

umbrellawarehousing intelligence

technologiesprocesses

fact


What's The Difference? Business Analytics vs Business Intelligence

• Business Analytics (BA) is a close cousin of Business Intelligence (BI). Both are meant to help companies make better decisions by analyzing business data. The difference is in their methods, and in the general direction of their analysis.

• Business Intelligence, the most common form, concentrates on ______ from the present and the immediate past, and drawing conclusions from that.

• Business Analytics makes more of an effort to predict the future using more complex tools relying heavily on anything from _________ to neural nets.

http://it.toolbox.com/blogs/inside-erp/whats-the-difference-business-analytics-vs-business-intelligence-58672

data

statistics


The Architecture of BI• A BI system has four major components:

– 1. a data _________, with its source data– 2. business ________, (or analytical environment)

a collection of tools for manipulating, mining, and analyzing the data in the data warehouse;

– 3. business __________ _________ (BPM) for monitoring and analyzing performance

– 4. a user _______ (e.g., dashboard)

warehouseanalytics

performance management

interface


Fig. 1.3: A High-level Architecture of BI1. 2. 3.

4.


Business Analytics (cont.)• Davenport and Harris

suggest that companies who are successful competing with business analytics have these five capabilities:– Hard to duplicate– Uniqueness– Adaptability– Better than competition– Renewability

• Characteristics of strategic resources are:– valuable, – rare, – non-imitable, – non-transferable, – non-substitutable,– combinable, and – exploitable


COMPONENTS OF BUSINESS ANALYTICS


Figure 11.6 Components of Business Analytics

Component

Definition Example

Data Repository

Servers and software used to store data

Software Tools Applications and processes for statistical analysis, forecasting, predictive modeling and optimization.

_________________Forecasting software package

Analytics Environment

Organizational environment that creates and sustains the use of analytics tools

________________ thatencourages the use of the analytics tools; willingness to test or experiment

Skilled Work Force

Work force that has the training, experience and capability to use the analytics tools

Harrahs and Capital One have such work forces

Data warehousesData mining process;

Reward system

To successfully build B.A. capabilities in the enterprise, companies make a significant investment in their: 1)___________, 2) _______, and 3) strategic decision-making __________

technologies peopleprocesses


Components of Business Analytics • Data repositories - data warehouses sometimes serve

as repositories of organizational knowledge.• Software Tools – data mining is used to analyze data

in the data warehouse looking for “gems”.– Four categories of tools used:

• Statistical analysis• Forecasting/extrapolation• Predictive modeling• Optimization


Components of Business Analytics• Analytics Environment – alignment of corporate

culture.– Incentive system– Metrics used to measure success of initiatives– Processes for using analytics

• Skilled work force – experts are needed.– Managers must set the example (CEO-level sponsorship).– Require decisions be made using analytics.


Knowledge management vs. Information technology projects

Knowledge Management Project Information Technology Project

• Emphasizes ____________ information for users

• Support organization improvement and innovation

• Adds value to content by filtering, interpretation, and synthesis

• Require on-going user contributions

• Balanced focus on both technology and culture

• Variety of inputs often precludes automated capture of knowledge

• Emphasizes ___________ of information for users

• Support existing operations

• Delivers content only

• Emphasizes one-way transfer of information

• Primary focus on technology

• Assumes capture of all information inputs can be automated

Then, is there a general rule to determine a project is a KM project or a IT project?

valued-added accessibility


KM Project vs. IT Project

• According to Davenport and Prusak point out in their “________ % rule,”– if more than one-third of the time and money

spent on a project is spent on technology, the project becomes an IT project rather than a KM project.

33 1/3


Data Base

Data Warehouse/Data Mart

Online Transaction Process vs. Online Analytic Process

Business__________

OLTP

(Daily operations)Real-Time,Relational DB

OLAP

(copied to)

(Non-daily operations)(for quick and easy access)

Not Real-Time

Business__________Transactions

Intelligence


A Generic Data Warehouse Framework

DataSources

ERP

Legacy

POS

OtherOLTP/wEB

External data

Select

Transform

Extract

Integrate

Load

ETL Process

EnterpriseData warehouse

Metadata

Replication

A P

I

/ M

iddl

ewar

e Data/text mining

Custom builtapplications

OLAP,Dashboard,Web

RoutineBusinessReporting

Applications(Visualization)

Data mart(Engineering)

Data mart(Marketing)

Data mart(Finance)

Data mart(...)

Access

No data marts option

Fig. 2.3 A Data Warehousing Framework and Views


Discussion Question

• #3. What does it take to be a successful competitor using business analytics? What is IT’s role in helping build this competence for the enterprise? [Business Analytics]


• Ans: Good data is at the core of business analytics. Organizations must have high quality data that can be accessed and examined very carefully and methodically.

• Data mining is key to finding the “gems” of information. Organizations must be able to quickly turn their data into valuable information that can be used for competitive advantage.

• The corporate culture need to be aligned to an analytics environment that includes: an incentive system; metrics need to be used to measure the success of initiatives; and appropriate processes for using analytics. Also, a skilled work force (experts) is needed. To be truly successful the managers must set the example (CEO-level sponsorship) and the organization must require that decisions be made using analytics. IT is key to providing the infrastructure to enable and support such a movement.


Learning Objectives• Understand the difference between data, information,

and knowledge.• Define how tacit knowledge differs from explicit

knowledge.• Describe why knowledge management is so

important.• Understand how knowledge is generated and

captured.• Describe a knowledge map.


Real World Examples• Harrah’s found a way to double revenues by collecting

and then analyzing customer data.• They mine their customer data completely.• They use loyalty cards to track customer behavior and

to determine high revenue customers.• Determined that these customers were motivated by

reduced hotel room rates, and wanted quick service.• They found ways to reduce lines and wait time.

– High revenue customers rarely waited in any line.• Found ways to keep customers coming back.


Economic reliance on knowledge workers is increasing

• Knowledge _____ .• Customers and businesses want a more

integrated approach.• Best to say you are in the knowledge

business.

gap


Working Smarter, Not Harder• Overlapping Human/Organizational/ Technological factors

in KM:

PEOPLE

TECHNOLOGY

ORGANIZATIONALPROCESSESi Knowledge

N


Why Knowledge Management?• Business evolve from competing on , to

competing on , to competing on

.• Effectively managing knowledge as a

strategic asset will enable companies– to adapt to new ways of thinking,– to respond to change quickly and easily, and– to adopt a broader view when defining

products and services. N

costvalue

knowledge


What is Knowledge Management? • Knowledge management is defined as the processes needed

to generate, capture, codify and transfer knowledge across the organization to achieve competitive advantage – Pearlson and Saunders.

• Knowledge management (KM) is a process of organizing and structuring institutional processes, mechanisms, and infrastructure to create, store, and reuse organizational knowledge.

• Technology plays a significant role in managing knowledge• and are essential to knowledge

management.Collaboration innovation


Defining Knowledge Management• Intellectual capital is defined as knowledge that has been

identified, captured, and leveraged to produce higher-value goods.

• Intellectual property allows individuals to own their creativity.

• Intellectual capital is a synonym of KM• A position called “Coordinator for International Intellectual

Property Enforcement” was created by the US Department of Commerce.

• KM is related to IS in three ways:

1. IT makes up the infrastructure for KM systems2. KM systems make up the data infrastructure for many IS

applications3. KM is often referred to as an application of IS.

N


Figure 12.1 The relationships between data, information, and knowledge.

Data

More human contribution

Greater value

Information

Data endowed with relevance and purpose

Requires unit of analysis

Needs consensus on meaning

Human mediation necessary

Often garbled in transmission

KnowledgeValuable information

from the human mind; includes reflection, synthesis, context

Hard to transfer

Often tacit

Hard to capture electronically

Hard to structure

Highly personal to the source

Data Information Knowledge

DataSimple observation of

states of the worldEasily captured

Easily structured

Easily transferred

Compact, quantifiable


The Content of Human Mind • According to Russell Ackoff, a systems theorist

and professor of organizational change, the content of the human mind can be classified into five categories:– Data: symbols or facts– Information: data that are processed to be useful;

provides answers to "who", "what", "where", and "when" questions

– Knowledge: application of data and information; answers "how" questions

– Intelligence/Understanding: appreciation of "why“– Wisdom: evaluated understanding.


Value Chain Data of the Enterprise

Data

Wisdom refers to our effective use of intelligence (or knowledge), intelligence refers to our effective use of knowledge.

“Knowledge is information that changes something or somebody – either by becoming grounds for actions, or by making an individual (or an institution) capable of different or more effective action” - Pete Drucker.

An organization learns what it knows by cultivating its knowledge ecosystem in which information, insights, and inspirations cross-fertilize and feed one another, free from the constraints of geography and schedule.

Information Knowledge Intelligence Wisdom


Knowledge• Knowledge is a mix of contextual information,

experiences, rules, and values.• Richer, deeper, and more valuable.• Consider knowing –

– What? - based upon assembling information and eventually applying it.

– How? – applying knowledge leads to learning how to do something.

– Why? – casual knowledge of why something occurs.– (Figure 12.2 graphically illustrates these types of knowing).


Figure 12.2 Taxonomy of knowledge

Know-What Know-How

Know-Why

Application

Information Procedure

Reasoning

Experience

Source:H-W Kim and S. M. Kwak, Linkage of Knowledge Management to Decision Support: A System Dynamic Approach


Discussion Question (extra)

• #2. What is the difference between tacit and explicit knowledge? From your own experience, describe an example of each. How might an organization manage tacit knowledge?


Tacit vs. Explicit Knowledge

• _______ knowledge is personal, context-specific and hard to formalize and communicate

• ________ knowledge can be easily collected, organized and transferred through digital means.

Tacit

Explicit


Tacit is the knowledge we each, individually know from our experiences and our thinking. It may not be easily communicated because it may not be something we have every expressed in words, pictures or numbers ever before. Explicit knowledge, on the other hand, is the stuff we can point to, write about, or otherwise communicate easily. The trick, of course, is to make tacit knowledge explicit so we can communicate it to others. Each student should have examples of both types of knowledge.

Tacit knowledge might be how to throw a baseball, hit a tennis ball, run a marathon, solve a homework problem, etc. Explicit knowledge examples might be the formula for a chemistry project or financial calculation or the statistics of your favorite sports team, etc. An organization might manage tacit knowledge explicitly, that is by trying to get individuals to make their tacit knowledge explicit then record it in a database, or by acknowledging the difficulty and by creating communities of practice, gurus, and other people-based systems that facilitate discussions and interactions as a means of transferring knowledge.


We know what we know

(Explicit knowledge)

We don’t know what we know(Tacit knowledge)

We know what we don’t

know

We don’t know what we don’t

know

Types of Knowledge

What w

e Know

What w

e don’t know

We Know We don’t know


Tacit and Explicit KNOWLEDGE

Oral Communication“Tacit” Knowledge

50-95%

Information Request

“Explicit” Knowledge

Explicit Knowledge Base5 - 50%

Information Feedback


The Four Modes of Knowledge Conversion

Tacit Knowledge

Explicit Knowledge

Tacit Knowledge

Explicit KnowledgeA. Socialization

(Sympathized Knowledge)

C. Internalization(Operational Knowledge)

B. Externalization(Conceptual Knowledge)

D. Combination(Systematic Knowledge)

Transferring tacit knowledge through shared experiences, apprenticeships, mentoring

relationships, on–the-job training, “Talking at the water cooler”

Articulating and thereby capturing tacit knowledge through use of

metaphors, analogies, and models

Converting explicit knowledge into tacit knowledge; learning by

doing; studying previously captured explicit knowledge

(manuals, documentation) to gain technical know-how

Combining existing explicit knowledge through exchange and

synthesis into new explicit knowledge

FRO

M

TO

Source: Ikujiro Nonaka and Hirotaka Takeuchi, The Knowledge-Creating Company, 1995

Which mode is the one for classroom processes? _____C


Applying Knowledge Management

• KM is not a new concept, but one reinvigorated by IT such as collaborative systems, the Internet and intranets.

• KM is still an emerging discipline• Ultimately, an organization’s only sustainable

competitive advantage lies how its employees apply knowledge to business problems

• KM is not a magic bullet and can not solve all business problems.


FROM MANAGING KNOWLEDGE TO BUSINESS

INTELLIGENCE


From Managing Knowledge to BI• Managing knowledge is not a new concept, but one

reinvigorated by IT. • KM is still an emerging discipline• Business Intelligence (BI) is a set of technologies and

processes used to describe business performance.– BI is a component of KM.

• Business Analytics – use of quantitative and predictive models, and fact based management to drive decisions.

• An organization’s only sustainable competitive advantage lies with how its employees apply knowledge to business problems

• KM is not a magic bullet.


WHY MANAGE KNOWLEDGE?


Factors to consider in Knowledge Management

• Information and knowledge have become the fields in which businesses compete.

• Several important factors include:1. Sharing Best Practice2. Globalization3. Rapid Change4. Downsizing5. Managing Information and Communication Demand6. Knowledge Embedded in Products7. Sustainable Competitive Advantage


1. Sharing Best Practices• Avoid “ reinventing the wheel”• Build on previous work

7. Sustainable Competitive Advantage• Shorter life-cycle of innovation• Knowledge as an infinite resource• Direct bottom-line returns

5. Managing Overload• Inability to assimilate knowledge• Data organization and storage is needed• Information and communication

4. Downsizing• Loss of knowledge• Portability of workers• Lack of time and resources for knowledge acquisition

2. Globalization• Decreased cycle times• Increased competitive pressures• Global access to knowledge• Adapting to local conditions

. 6. Embedded Knowledge• Smart products• Blurring of distinction between service and manufacturing firms• Value-added through intangibles

3. Rapid Change• Avoid obsolescence• Build on previous work• Streamline processes• Sense and respond to change

Why ManageKnowledge?

Figure 12.4 Reasons for Managing Knowledge. ©IBM Global

Services

Source: adapted from IBM Global Service.


Sharing Best Practices• Sharing best practices means leveraging the

knowledge gained by a subset of the organization.• Increasingly important in organizations who depend

on applying their expertise such as accounting, consulting and training firms.

• KM systems capture best practices to disseminate their experience within the firm.

• Problems often arise from employees who may be reluctant to share their knowledge (managers must encourage and reward open sharing).


Globalization

• Historically three factors, land, labor and capital were the key to economic success

• Knowledge has become a fourth factor.• Knowledge-based businesses can grow without

traditional land, labor, and capital requirements.• Key competitive factor will be how well an

organization acquires and applies knowledge.


Other factors• Rapid change: firms must be nimble and adaptive to compete• Downsizing: sometimes the wrong people get fired when

creating a leaner organization• Managing Info and Comm Overload: data must be

categorized in some manner if it is to be useful rather than overwhelming

• Knowledge Embedded in Products: the intangibles that add the most value to goods and services are becoming increasingly knowledge-based

• Sustainable Competitive Advantage: KM is the way to do this. Shorter innovation life cycles keep companies ahead of the competition.


KNOWLEDGE MANAGEMENT PROCESSES


Knowledge Management• KM involves four main processes –

1. Generation – all activities that discover “new” knowledge.

2. Capture – all continuous processes of scanning, organizing, and packaging knowledge after it has been generated.

3. Codification – the representation of knowledge in a manner that can be easily accessed and transferred.

4. Transfer – transmitting knowledge from one person or group to another, and the absorption of that knowledge.


Knowledge Generation• Concerns the intentional activities of an organization

to acquire/create new knowledge.• Two primary ways are knowledge creation

(exploration) and knowledge sharing (exploitation).• Methods include:

– Research and Development– Adaptation– Buy or Rent– Shared Problem Solving– Communities of Practice


KNOWLEDGEGENERATION

Figure 12.5 Knowledge Generation Strategies

Buy or Rent

Adaptation

Shared Problem Solving

Creating (R&D)

Communities of Practice

a.(KC)

b.(KC)

c.(KS)

d.(KS)

e.(KS)


Research and Development • Knowledge generated by R&D efforts frequently

arises from synthesis • Synthesis brings disparate pieces of knowledge

together, often from extremely diverse sources, then seeks interesting and useful relationships among them

• Realizing value from R&D depends largely on how effectively new knowledge is communicated and applied across the rest of the firm


Adaptation

• Adaptation is the ability to apply existing resources in new ways when external changes make old ways of doing business prohibitive

• A firm’s ability to adapt is based on two factors: having sufficient internal resources to accomplish change and being open and willing to change


Buy or Rent

• Knowledge may be acquired by purchasing it or by hiring individuals, either as employees or consultants, who possess the desired knowledge.

• Another technique is to support outside research in exchange for rights to the first commercial use of the results


Shared Problem Solving

• Also called “fusion,” shared problem solving brings together people with different backgrounds and cognitive styles to work on the same problem

• The creative energy generated by problem-solving groups with diverse backgrounds has been termed “creative abrasion”


Helping Fusion Work• Ideas that help fusion work effectively include:

– (1) fostering awareness of the value of the knowledge sought and a willingness to invest in it;

– (2) emphasizing the creative potential inherent in different styles of thinking and viewing the differences as positive;

– (3) clearly specifying the parameters of the problem to focus the group on a common goal


Communities of Practice • Achieved by groups of workers with common

interests and objectives, but not necessarily employed in the same department or location, and who occupy different roles on the organization chart.

• Workers communicate in person, by telephone or by e-mail to solve problems together.

• Communities of practice are held together by a common sense of purpose and a need to know what other members of the network know


Four Basic Principles of Knowledge Codification*

1. Decide what business goals the codified knowledge will serve (define strategic intent).

2. Identify existing knowledge necessary to achieve strategic intent.

3. Evaluate existing knowledge for usefulness and the ability to be codified.

4. Determine the appropriate medium for codification and distribution.

*Davenport and Prusak (1998)


Knowledge Capture • Knowledge capture takes into account the media to

be used in the codification process. • The 3 main knowledge capture activities are:

• Scanning (gather “raw” information) – can be electronic or human.

• Organizing (move it into an acceptable form) – must be easy for all types of users to access.

• Designing knowledge maps (providing a guide for navigating the knowledge base)


*Organizing Knowledge• Folksonomies – site for collaboratively creating and

managing tags for annotating and categorizing content.• One scheme for categorizing knowledge uses four

broad classifications (Ruggles 1997):– Process knowledge – best practices, useful for increasing efficiency.– Factual knowledge – easy to document; basic information about

people/things.– Catalog knowledge – know where things are; like directories of

expertise.– Cultural knowledge – knowing how things get done politically and

culturally.


Designing Knowledge Maps • A knowledge map (see figure 12.6) serves as both a

guide to where knowledge exists in an organization and an inventory of the knowledge assets available.

• A knowledge map can consist of nothing more than a list of people, documents, and databases telling employees where to go when they need help.

• Provides access to resources that would otherwise be difficult or impossible to find

• Can capture tacit knowledge through narratives.– Good stories are effective for knowledge transfer.


Figure 12.6 Contents of knowledge maps


Knowledge Codification

• Knowledge must be used or shared to be of value.

• Codification puts the knowledge into a form (representation) that makes it easy to find and use (accessed and transferred).

• It is difficult to measure knowledge in discreet units (since it changes over time).

• Knowledge has a shelf life.


Knowledge Transfer• Nonaka and Takeuchi’s Knowledge Transfer

describe four different modes of knowledge conversion (transfer):• Socialization: from tacit knowledge to tacit

knowledge • Externalization: from tacit knowledge to explicit

knowledge • Combination: from explicit knowledge to explicit

knowledge • Internalization: from explicit knowledge to tacit

knowledge


Key to Success: A Learning Organization need to have four characteristics critical to successful Knowledge Management

N

S

W E

CULTURELEADERSHIP

PEOPLE AS ASSETS STRUCTURES AND PROCESSES


How to Succeed in Knowledge Management

• A successful KM effort requires leadership with– vision, – commitment, and – an organizational culture that facilitates

collaboration.


CoreCompetency

Technologies Knowledgederivative

InformationCommunicationIndustries

Intellectual & Intangible AssetsPartnershipPatentsData bases

Processes Explicit, Codified Knowledge Methods

Human CapitalWellspring of

Knowledge

SkillExperienceKnowledge

Learning

Learning

Manage Core Competency


1 2

3

4

5

Information & Comm. Technology Infrastructure

Know-whatKnow-howKnow-why

QualityInformation Explicit

Knowledge

Tacit KnowledgeRaw Information

OrganizationalKnowledge

CoreCompetenceCrystallize Core Competence

Generalize Best Practice for Reuse

Produce Best Practice

Contextualize Organizational Knowledge

Create Organizational Knowledge

Improve quality of information Make tacit

knowledge explicit

Best Practice

Figure: From Organizational Knowledge to Core Competency

Knowledge HuntingKnowledge Hardening

[process knowledge]


From Data to Knowledge:How Can Organization Gain Competitive Advantage?

(Survive and Prosper in the Digital Economy)

Data process Information Quality Information

Accessible

Organizational Knowledge

SharableCollaborative

-As a productNOT byproduct

-As core intellectual capitalNOT merely a few smart employers

DecisionMakingAvailable

Reusable

CRMAccountingFinanceOperationsManufacturing

Externalcustomers

D. B.

D.B.:Structured: R-DBMSUnstructured: Document Mgt. Systems

context,experience

automate informate innovate N

Useable

K.BD.W


• A wise CEO will make better decisions and inspire greater loyalty and trust than just a knowledgeable CEO.

-- Schrage, 1996

• Imagination is more important than Knowledge.

-- Albert Einstein


“Knowledge is the beginning of practice; doing is the completion of ___________.”

-- Wang Yang Ming, 1498 (one of great Chinese philosophers)

knowing

知識是實踐所做事情的開始 ;這樣做是在完成知曉


THE WORLD OF RE-EVERYTHING

• Knowledge is productive ONLY when ______________________.

• ____________ requires decentralized intelligence.

• We need to empower _________ workers• Top performers can be a problem; they are

not the most _______.

captured in people’s mindShareability

knowledge

humble


Sustainable Competitive Advantages

• Any sustainable competitive advantages?• How can an organization sustain its

competitive advantage?• Firms may create/improve their competitive

advantages only if they:– have to learn,– employ approach,–

capacityrevenue management

learning to learn and learning to change (life-long learning environment)


CAVEATS FOR MANAGING KNOWLEDGE

ã John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 78Copyright 2010 John Wiley & Sons, Inc.

Caveats for Managing Knowledge • KM and BI are emerging disciplines • Competitive advantage increasingly depends on

knowledge assets that are hard to reproduce, so it is sometimes in the best interests of the firm to keep knowledge tacit, hidden, and nontransferable

• Knowledge can create a shared context for thinking about the future, not to know the future, but rather to know what projections influence long-term strategy and short-term tactics

• The success of KM ultimately depends on a personal and organizational willingness to learn


FOOD FOR THOUGHT: BUSINESS

EXPERIMENTATION


Business Experimentation • Thomke discusses business experimentation as a means

of innovation.• Products and services are created and improved using

analytics through a process of experimentation.• Companies who excel are able to create new products

and services at a fraction of the cost of others.• Capital One is built around this methodology.• Ran 1,000s of experiments on their bank’s customer

database to test and develop new ideas.


Business Experimentation

• Capital One had the following results:– Increased business savings retention by 87%– Lowered the cost of acquiring new accounts by 83%

• It is a concept of test and learn.– Projects are managed as experiments.– Projects are designed with a series of rapid iterations.

• Both Harrah’s and Capital One have built a core competency in business experimentation and analytics.

Copyright 2010 John Wiley & Sons, Inc.


Conclusion

Literacy + Electronic Infrastructure +Social Revitalization =

Opportunity for New Societal Infrastructure

Knowledge distribution

Motivation


Summary• KM is related to information systems in three

ways: IT makes up its infrastructure, KM makes up the data infrastructure for many IS and apps, and KM is often referred to as an app of IS.

• Data, information, and knowledge should not be seen as interchangeable.

• The 2 kinds of knowledge are tacit and explicit.• Manage knowledge carefully, there are many valid

and of course legal reasons.• KM projects can be measured using project-based

measures.

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Chapter 11 Project Management