Knowledge Management in the Business Sector

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Knowledge Management in the Business Sector

• Al Berg
• Practice Director/Collaborative Computing
• AMC Computer Corporation
• New York City, NY USA
• alberg_at_amccorp.com
• www.amccorp.com

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Businesspeople knowKnowledge has Value!

• If HP knew what HP knows, we would be three
  times as profitable. --Lew Platt, CEO of
  Hewlett Packard

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KM is Job One

• According to the American Management Association
  (12/98), Knowledge-Based Management is the
  number one ranked IT concern of executives
  worldwide.

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Business KM Trailblazers

• Arthur Andersen
• Chevron
• Dow Chemical
• Hughes Space Communications
• Kaiser Permanente
• Price Waterhouse

• Sequent Systems
• Scandia AFS
• Texas Instruments
• USAAaccording to the American Productivity
  Center

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KM Saves Real Money

• Dow Chemicals initial Intellectual Property
  management projects saved 40 million
• Chevrons KM efforts led to 170 million in
  savings
• TI shared information on increasing semiconductor
  yields - and saved 500 million

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The CKO

• Chief Knowledge Officer
• Builds a knowledge culture
• Builds the needed infrastructure
• Makes it all pay off!

• Only 14.9 of companies responding to a recent
  survey have a Chief Knowledge Officer

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Top Management Involvement

• According to the same KM World survey
• 59.5 of respondents noted that KM initiatives
  were driven by top management
• 40.5 did not see initiatives as driven by
  corporate management
• Successful KM adopters have top management as a
  driver

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Cultural issues

• The most difficult part of implementing KM in
  business (and other) settingsIt must be
  considered that there is nothing more difficult
  to carry out, nor more doubtful of success, nor
  more dangerous to handle, than to initiate a new
  order of things.Niccolo Machiavelli - The
  Prince - 1513

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Information Overload - A major driver of KM

• The average businessperson in the US, Canada and
  UK receives approximately 190 messages per
  dayaccording to a May 1998 survey by Pitney
  Bowes

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Three Kinds of KM Projects...

• Creation of knowledge repositories
• Improving access to knowledge
• Building the knowledge culture

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Knowledge Repositories

• External knowledge
• Competitor intelligence
• Structured internal knowledge
• Reports, databases
• Informal internal knowledge
• Discussions

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RepositoriesExternal

• Competitor and client intelligence
• Competitor sales information
• Industry/competitor news
• Analysis of products developed and patents filed
  by competitors

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External Repositories at AMC Computer Corporation

• Access to external news sources for client,
  vendor and customer news
• Links to competitor web sites
• Demos
• The AMC news database
• Inquisit

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RepositoriesStructured/Internal

• Document management
• Capture knowledge as it is created
• Leverage existing documents generated in course
  of business by making them easily accessible
• Very common in the legal profession since its
  data is already document based

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Repositories Structured/Internal

• Data Warehousing
• Slice and dice access to data already being
  collected throughout an organization -
  accounting, customer service, etc.
• New ways of looking at analyzing existing data
• Data ----gt Information

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Repositories Informal/Internal

• Hewlett Packards Traders Training Post
• Links trainers and educators throughout HP world
  wide using Lotus Notes
• Captures tips, tricks, insights and experiences
  and makes them globally accessible
• Informal discussion database

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Improving Access to Knowledge

• Yellow Pages which connect information
  consumers with information sources
• Codifying the map of knowledge in the
  organization

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Microsofts SPUD

• Skills Planning Und Development
• Missions
• Improve matching of employees to jobs and teams
• Plan for future employee skills development

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How SPUD Works

• Each Information Technology job at Microsoft is
  rated by a manager in terms of the 40 - 60
  knowledge competencies needed to perform it
• Each workers competencies are evaluated by
  him/herself, their supervisor and co-workers

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Kinds of Knowledge

• Foundation knowledge (entry level)
• Unique knowledge needed for a job/task
• Global knowledge for a particular
  function/organization
• Universal knowledge for the company

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SPUD Skill Categories

• Within each knowledge type, workers can possess
• Explicit competencies in specific tools and
  methods
• Implicit competencies such as leadership,
  abstract reasoning

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SPUD Skill Levels

• Competencies can be categorized as
• Basic knowledge
• Working knowledge
• Leadership
• Expertise

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SPUD allows...

• Managers to find the workers with the skills
  needed for a particular task/project
• Workers to find assistance on specialized tasks
• Workers to determine what type of training they
  need to advance their careers

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Improving Access to Knowledge

• Knowledge may exist in the organization - but may
  be difficult to find
• KM tools can be used to make knowledge available
  to new internal markets

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Case in Point Chevron

• Best Practice SharingSharing information on the
  best,most profitable ways to dobusiness
• Knowledge Sharing Conferences
• Intranet

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Chevron Initiatives

• Benchmarking costs for oil/gas drilling and using
  that information to predict and reduce future
  costs
• Designation of process masters whose job it is
  to share knowledge

• Looking at competitors best practices - as well
  as those from outside the energy industry

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The Result

• 30 percent productivity gain
• 50 percent safety gain
• 2 billion in cost reduction in the 1990s

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Creating a Knowledge Environment

• This is the hardest part for many companies
• Traditional business practices may not reward
  information sharing - even in the same company!

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Leveraging What Is Already There

• Dow Chemical owned 29,000 patents - and did not
  know what they contained!
• KM helped them...
• extract lost knowledge
• sell patents that were not being used
• abandon patents that were obsolete
• Bottom line US4 million in savings

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Nine Keys to KM Success

• Knowledge friendly culture
• Technical/organizational infrastructure
• Senior management support
• Links to economic benefits/success

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Nine Keys to KM success

• Process perspective
• Clarity of vision and language
• Powerful incentives
• KM structure
• Multiple channels for knowledge xfer

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Microsoft and Knowledge Management

• Microsoft Exchange
• Internet Information Server
• Databases

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KM Demo from Lotus Development and IBM

• This 9 minute movie shows IBM/Lotus
  Developments vision for Knowledge Management
• Scenario a new employees first day on the job
  at a biotechnology firm...

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The Book on KM in Business

• Working KnowledgeHow Organizations Manage What
  They KnowThomas H. DavenportLaurence
  PrusackHarvard Business School Press

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The Other Book on KM in Business

• If Only We Knew What We Know The Transfer of
  Internal Knowledge and Best Practice Carla
  ODellFree Press

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Knowledge Management on the Web

• Knowledge Management Magazinehttp//www.kmmag.com
  
• Knowledge Inc.http//www.knowledgeinc.com
• American Productivity Quality
  Centerhttp//www.apqc.org

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Thank You!
Al BergPractice Director/Collaborative
Computing AMC Computer Corporation129 West 27th
StreetNew York City, NY 10001Telephone 1-212-6
20-0700, extension 1243Facsimile 1-212-656-1785
Web www.amccorp.comEmail alberg_at_amccorp.com