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Goods & Services

Goods tangible

Services- intangible

Traditional business models sell goods, services not part of a

good!!!

Greater Integration ofGoods and Services Services as part ofgoods free 3 yrmaintenance ofcars, 30 min delivery of Pizza,Customized design of vehicles, laptops,...

More & more integration ( Asian Paints & budgeting),....

Services becoming a indistinguishable part of a good!!!!

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Knowledge- A production resource

Growing Business uncertainty Competition, Technology,Consumerpreferences, Environmental protection,...

Predicting the future - Rising role of knowledge in economies

Knowledge workers Core competence, consumerpreferences, innovation,

competitive advantage from knowledge point of view!!!

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Knowledge Characteristics

Knowledge of a domain science, arts, commerce (Bio-technology, nuclearresearch, pharmacy, IT,...)

Knowledge ofhow to apply domain knowledge forwealthcreation - Know- how, patents, focus on processes, products...

Tacit knowledge example mechanic

Explicit knowledge Easy to codify, exchange, distribute!!!

Synergy property

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Role of IT in Knowledge Management

Enabler forKM

Computing power, distribution, storage, recall!!!

ITcan greatly enhance the management of knowledge assets

in a company IT is not knowledge management!!!

KM has much to do with people,structures, transfer thanhardware and software!!!

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Changing role of IT

Transaction processing to information management, processmanagement, knowledge management!!!

From standardization to implementation of best practices (ERP)

Creation of strategicresources innovation, knowledgemanagement, convert tacit to explicit knowledge!!!

One doesnt implement ERP to simply automate the processesany more!!!!

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Knowledge driven Economy

Competition, lowerprices, demanding customer the morewe get, the more we desire...

Shorter life cycle, changing technology

Complex products Globalization and out sourcing

Companies that need to sustain need to invest in knowledge!!!

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Highercontent of Knowledge

A new category of products/services which are based oninformation/knowledge

Products/services are packed with greater information content

Even products like edible oil and salt have knowledge content While costs of manufacturing decline, costs related to

technology, R&D, consumerresearch are increasing!!!

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Knowledge- an asset

To sustain competitive advantage, corporations need to possessan asset that-

Provides competitive advantage- difficult tocreate/copy/replicate

Does not depreciate

Helps innovation!!!

Knowledge is the desired asset!!!

Thus management of knowledge is necessary to create valuecontinuously!!!

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Knowledge Cycle

Knowledge Management- ability to transform the organizational knowledge intosustainable value creation

Knowledge cycle

Transformation ofTacit to Explicit knowledge

Create create knowledge, bring in

Capture assessment and representation

Refinement contextual reference with tacit Hitachi appliance example

Storage- to recall

Manage to keep it current, relevant, accurate

Disseminate

Adapt to internalize at operational level!!!

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Knowledge Management Cycle

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Myths of KM

KM is re-engineering

KM is library

KM is more of IT

Do it once, then relax

Just do because otherare doing!!!

Fordecades to come, knowledge will continue to dominate thebusinesses!!!

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Need forKM

Knowledge helps businesses

Call Centres- ability to respond to queries

Front line staff- ability to solve problems

Business Managers betterdecision making thru accurate,complete and relevant information

Transferknowledge from people to system

Support Innovation

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Knowledge Transformation

The process ofTacit to Explicitis modeled by 4 transformations

Socialization (S) -

Externalization (E)-

Combination (C)-

Internalization (I)-

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Knowledge Transformation .

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Socialization

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Externalization

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Combination

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Internalization

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KM Initiatives

People motivation forpeople to share knowledge

Processes to keep knowledge current, relevant

Organization organization policies, procedures forKM

Technology the environment underwhich KM activities arecarried out to deliverKnowledge to those who need it!!

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Mobilize Knowledge

Start from what kind of knowledge is likely to be useful, thenproceed, so have process focus!!!

User focus point of performance

Some tools for

explicit knowledge management

Content Management- information related to process,product,...

Document Management- document life cycle

Records Management- transactions, exceptions,...

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DIKW

Data: collection of facts, events, objects. Can be analog ordigital. Surveys, interviews also gatherdata

Data can be converted into useful information when someactions/processes act on data!!

Collect, Classify/codify, Sort/Merge, Summarize, store,arithmetic or logical processing, retrieve, distribute ordisseminate!!

Processed data information, processing adds contextual

angle to data!!!

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Information

Information has a greater life

Information basis fordecision making

Information Simulation and testing

Information short term improvements

Information to one can be garbage foranother

Useful information is data processed withrelevance andpurpose!!!!

The powerof MIS is based on relevance and purpose!!!

Information can be processed further leading to knowledgediscovery!!!

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Knowledge

Mix of experience, values, contextual information and expertinsight!!!

Thus, Knowledge has infinite life!!!

Knowledge is information supported by experience andinsight used forguiding actions

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Wisdom

Accumulated knowledge

Application of knowledge in new situation ordomains

Wisdom is a deep understanding and realizing of people,things, events orsituations, resulting in the ability to choose

oract to consistently produce the optimum results with aminimum of time and energy.

It is the ability to optimally (effectively and efficiently) applyperceptions and knowledge and so produce the desiredresults. Wisdom is also the comprehension of what is true orright coupled with optimum judgment as to action

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Wisdom

Consider the following example: If I invest 100 I get the

following returns after1 yr

Saving bank 105

FD 107

MF 112

Gold 115

Stocks 120

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Information

The data can be processed - concepts like ROI, IRR

How to invest a sum of money? If one tends to answerbasedon ROI, one might choose Stocks, but is it a good decision?Experience tells us that every investment is associated with

risk, low orhigh!!! this is knowledge!!!!

SB 5% Risk f ree, liquid

FD 7% Risk f ree, blocked

MF 12% Moderate risk, blocked, exit terms

Gold 15% Low risk, easy to liquidate

Stocks 20% Highrisk, taxation and liquidity

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Knowledge

Thus low risk and highreturn, what is the best investmentdecision? The application of knowledge helps us associatewithrisk and return!!! Based on experience, context andobjectives!!!

However, to answer the question Given a large sum ofmoney, how to invest it?

Perhaps more options for investment such as land, buildingneed to be invested to get a betterpicture that is wisdom!!!Broader

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DIKW anotherexample

Sales data of a retail store- data

Processed data volume, time, fast moving items, -information, it can help in managing inventory, no ofcounters

Furtheranalysis and experience can lead to knowledgediscovery festive season, promotions, offers, displays,combo offers,

At the highest level, with experience, it will be clear if thebusiness makes sense, or to expand, ordiversify oroutsourcesome activities,...- Wisdom

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Characteristics of Knowledge

Knowledge assets escalate with time

Need to refresh and re-validate

Value of knowledge varies from person, company,

situation....Valuation difficult

Resides in knower internalized by knower

Contextual

Combines internal with external information

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Dimensions of Knowledge

Explicit knowledge in a form that can easily be understood drawings, databases, reports, letters, literature,....

Tacit Knowledge in intangible forms- mind, dairies,experience,...

SECI Model- explained