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From Information Management to Knowledge Management: Are You Prepared?
Dr David J. Skyrme
The following is the full text of a paper that was delivered at OnLine '97 (9-11 December 1997). Reproduced with the permission of Learned Information Europe Ltd. Tel: +44 (0)1865 388000. Fax: +44 (0)1865 736354. A follow-on paper Information Managers: Do We Need Them? was presented at Online Information 2004.
This paper reviews the role of the Internet in the current 'knowledge revolution'. Knowledge has emerged as a current 'hot topic' for many organisations. Many see knowledge management as the next source of competitive advantage.
The paper starts by exploring the momentum in the knowledge agenda and reviews the current state of theory and practice, based on an international study of best practice. It then considers the role of information systems, and especially how the evolution of the Internet and Intranets can contribute to effective knowledge management. These themes are together in frameworks that shape the role of the technological infrastructure in knowledge work. It is concluded that collaborative technologies and information management both have significant contributions to make, but that many organisations have yet to adopt them both systematically and strategically. Implications are developed for online service providers and information professionals in how they might achieve their full potential in moving forward the strategic knowledge agenda.
Every few years, a new technological development or management philosophy captures the attention of many strategic thinkers in organisations. First there was the Total Quality movement, and then Business Process Reengineering. There is no doubt, that the last couple of years has seen a surge of interest in knowledge management and also the Internet. Yet, as someone who has followed and participated in leading edge management practice for years, neither of these are really new, and neither, if you analyse trends properly, are real surprises.
It was back in 1950s that Drucker is credited with coining the term 'knowledge worker'. He was writing about the role of knowledge in organisation in some depth in the 1980s (e.g. see Drucker (1988)), as were many other foresighted writers e.g. Masuda (1980) and Sveiby (1987). Even after articles in more widely read publications in the early 1990s, most notably by Nonaka (1991) and Stewart (1991), there was no widespread interest among business managers until just a year or so ago. Now, the conference scene is exploding and there is at least one substantive new book published on the topic every month.
Likewise, the Internet has been evolving steadily for over two decades, since its origins in the US APRAnet project in the 1960s. What seems to me remarkable is that until fairly recently online service providers and corporate MIS managers were ridiculing it, saying it would not affect them. One MIS director, when I presented the advantages of the Internet for knowledge work at a conference in 1993, and its inevitable diffusion into being a core organisational technology retorted "over my dead-body" - I have not seen him since! Similarly "no threat to online hosts" was a headline I saw in the information press a year or so ago. Such reactions are typical of those operating in a well established field, not understanding the nature of innovation and diffusion of new ideas into the marketplace and business practice.
Both these example are where the use of trend analysis techniques, such as those based on content analysis as used by Trend Monitor International (Wyllie 1993), can help determine when the underlying trends reach a critical mass of reporting that impinges on management consciousness. Today, both are on the management agenda.
For the rest of this paper, we start from the premise, validated by our trend analysis and research, that neither the Internet nor knowledge management are 'fads', but will be fundamental factors in future business strategies for most organisations. We start by examining these trends and their underlying characteristics. These are then drawn together into the role of information and IT to support knowledge management activities. The paper concludes with a series of implications for information professionals and online service providers.
2.1 Momentum of Knowledge Awareness
The interest in knowledge as a strategic lever in business is not new. In the 1970s and 1980s there were great expectations that knowledge based computer systems ('expert systems') could harness knowledge to solve many business problems. That promise was only partially fulfilled and certainly not to the extent that workers in the field had hoped. In retrospect the problem was that developers focused too much on what has been described as "falling into the trap of trying to develop 'thinking machines' rather than using machines to augment human thinking" (Skyrme 1990).
The more general view of the pervasive role of knowledge in business activities, has evolved from a number of management writers and practitioners as portrayed by Amidon (1997) in her 'Wellsprings timelines' - hindsight, insight and foresight. This shows the evolution and convergence of thinking and writing about knowledge as a strategic focus, alongside other initiatives such as agile manufacturing, innovation and the learning orignization. In our discussions with managers during 1996 and early 1997, the two most important written influences cited were the ongoing series of articles by Stewart in Fortune (Stewart 1993, 1995), and of the book by Nonaka and Takeuchi (1995) The Knowledge Creating Company. The latter, in particular, has provided managers with a framework for distinguishing between explicit and tacit knowledge and the conversion processes between them. They describe explicit knowledge as that which:
"can be expressed in words and numbers and can be easily communicated and shared in the form of hard data, scientific formulae, codified procedures or universal principles"
and contrast it with tacit knowledge which
"is highly personal and hard to formalise. Subjective insights, intuitions and hunches fall into this category of knowledge."
The four conversion processes they describe are:
2.2 Contribution of Knowledge to Business Success
Knowledge adds value to a business through its products, processes and people. The product contribution of knowledge is described by Davis and Botkin (1994). They describe six features of knowledge-based businesses:
Recent examples of the growing intensity of knowledge in products are the intelligent oil drill, which 'knows' the shape of the reservoir it is drilling, and the intelligent car, whose engine management systems can monitor performance of vital parts and 'knows' when they need servicing. These are examples of where knowledge can enhance the value of a product in the eyes of the customer.
Another contribution of knowledge is that in business processes. Throughout industry there are examples of where individuals or departments are ostensibly carrying out the same process, but where the performance levels are quite different. Often it is the 'tacit' knowledge of the experienced person that makes the difference. The sharing of best practices from one part of an organization to another is therefore a key component of many knowledge management programmes. For example, Texas Instruments was able to save the equivalent of the investment in a new semiconductor fabrication plant, by sharing best practices between their existing plants (O'Dell 1996).
The value of knowledge as manifest in an organisations products, its intellectual capital (such as patents and licences), people (human capital) and processes (structural capital) is very evident when the book value of a company, as measured by traditional accounting methods, is compared with its market value, which takes into account the marketplace perception of intangible value not measured by accountants. For many high-tech companies (such as Microsoft) or knowledge intensive companies (such as biotechnology companies) this factor is ten or more to one.
The net result is that as the value and contribution of knowledge becomes more evident, that organisations are investing in initiatives to manage and harness that knowledge. This means a systematic approach to managing the processes for creating and capturing it, classifying it and storing it, disseminating and using it.
2.3 State of Knowledge Practice
During 1996, as part of the research for a 500-page report on knowledge management, we investigated the state of knowledge management in various companies around the world (Skyrme and Amidon 1997). This included literature reviews, case study interviews and the results of an Ernst ∓ Young/Business Intelligence two continent survey (North America and Europe). The survey showed that nearly 90 per cent of senior managers believed that their organisations were in a knowledge-intensive business, whatever their industry. It also revealed different perceptions of the value of various activities and of the contribution of technology across different industries and functions. Our research showed that the following were common activities that were taking place in knowledge management initiatives:
One shorthand way of summarising the knowledge movement, is to say that it is to get the right knowledge at the right place, at the right time. If this is done expeditiously, customer service can be improved through solving problems better, new products brought to market quicker, business processes continually improved, and innovative new ideas brought to commercialisation. What many practitioners have found, is that it the flow of knowledge that is important. This is where networked computer and communications technology plays an important role.
3.1 The Evolution of Computing in the Workplace
One of the most widespread ways in that technology supports knowledge processes, is not through simple point solutions, such as expert systems or group decision support systems, but through enterprise wide information and knowledge sharing infrastructures. Groupware conferencing systems like Lotus Notes and Intranets were very evident.
Figure 1 - The Evolving Role of Information Technology
If one traces the evolution of the contribution of information and communications technologies (ICT) in the workplace, the focus has changed over time (Figure 1). In the 1960s and 1970s the focus was on automating procedures. We even called the discipline data processing at the time. During the 1980s the leading edge was moving toward communications, most notably through electronic mail. At this time, online access to information through networks was also growing appreciably. Like manufacturing automation before, as we have gain the efficiencies in the office through automation of standard procedures (aided and abetted by BPR!) the locus of computer software development has shifted to support less structured activities, those of professional and managers. This is what I call the cognitive computing focus. We are trying to avoid the mistakes of the 'black box' mentality of earlier knowledge systems, and develop systems that augment and support the knowledge work of humans.
Of these, the one that is having the most profound impact is that of the Internet and related technologies. As noted earlier, to many it seems like a revolution, but I prefer to call it an evolution, since its use has been growing exponentially for many years. From a knowledge perspective the Internet has several characteristics that our research found was exploited in various knowledge programmes:
In fact, it can be said that it is the World Wide Web that made the Internet popular among most business users. We now have something akin to Doug Engelbart's notion of a 'docuverse' - a document universe that interlinks pages of information. I'm sure some of you still use Gopher, Verocia and Archie, but for most end-users, the Web represents the Internet.
3.2 Internet vs. Online
It is appropriate here to consider the many criticisms of the Internet that have been made to me by online service providers, who perhaps at the time did not want the Internet to be so successful (although they now have a different view that they are embracing it). First, there is often the criticism that "you get what you pay for", and since the "web is free" then the information is not worth much. In fact, many areas of useful information on the Web are not free - users pay for them, albeit usually on a 'pay-by-use' basis rather than an up front subscription as for many traditional online services. In fact, I have spent money on searched items and subsequently found I could have got the very same item for free on the Web! Second, the Internet is not secure. This is true if you are dealing with really sensitive information. But for most people seeking information and knowledge this is not a real issue.
Two criticisms that do have some validity are that it is slow and difficult to find information. Actually the Internet is very fast when you consider how quickly information can be retrieved from the vast databases that it holds. Obviously if you use a local CD-ROM or proprietary online service you can get information quicker, but if you look at the end-to-end time, from developing a search strategy to collecting information, and the time an end-user might have to spend briefing an intermediary, then the difference is often not that great.
Perhaps the most valid criticism is that the information is very variable in quality and the way it is organised. However, there are a number of resource sites that are building up categorised information and archive databases that compare favourably with online services. Online services have been perfecting their database techniques, their classification schemes and keywords for many years and provide a standard familiar interface to their disparate sources of information. Their value added comes in sourcing, classifying and refining information. This is worth a premium, but charges will undoubtedly have to come down to meet the increased availability of low cost information on the Internet.
In summary, the Internet is an incredible information source, and it has brought information directly to the end-users, without involving an intermediary such as a librarian or information professional. Furthermore, technology developments on the Internet will really improve matters in the near future. Examples include more intelligent search engines and intelligent software agents, that roam the net and bring back relevant information to your desk-top. This poses challenges for online providers and information professional alike. How can we serve the end-user better? How should we meet the opportunities and the challenge of the Internet? As is already happening, the world of online services and the Internet are converging. Users want the best of both worlds, the accessibility, universality, ease-of-use and low cost of the Internet combined with structured, organised and (in some cases) the exclusive information of online services.
3.3 The Knowledge Dimension
So far in this paper, the consideration of the Internet has been almost entirely to do with its information role. But by the time knowledge becomes encoded in a database, it is 'explicit' knowledge. In many respects effective sharing of tacit knowledge needs the face-to-face socialization process as described by Nonaka and Takeuchi. This is difficult over a distance although new technologies such as viedoconferencing are helping. If companies want to share the best knowledge they have to tap into experts wherever they happen to be - world-wide, inside or outside of the firm. The Internet here pays the role of enhancing remote access, through making the necessary connections and enhancing global communications. Users congregate in areas of shared interests, and start electronic conversations.
Electronic mail is the main way that this happens, but computer conferencing, such as with Lotus Notes, is popular in a corporate setting. However, knowledge sharing across organisational boundaries is increasingly required. Therefore, Internet facilities such as electronic mail discussion lists are a way that individuals working in dispersed multi-company teams, an increasingly common facet of organisational life, can converse together over a distance. The European Telework Development project is one example, where the project was originally formulated electronically, and where almost all of the day to day activities between 30 participants in 15 countries, takes place that way (Mitchell 1996). While there are a growing number of Web conferences, companies that are most developed in sharing and developing knowledge over electronic networks seem to prefer a fully functional groupware product such as Lotus Notes, now Web enabled through its Domino version.
It is the ease of use that have made the use of Internet technology, such as browsers and search engines, of interest to companies wanting to share information. The advantages in a corporate setting of using Intranets (internal Internets) are similar to those that make use of the Internet attractive in external information access and communications. End-users are familiar with browser interfaces, information can be shared across different local area networks and computer platforms, and published information is instantly available over the whole network. Furthermore this information need not just be HTML (the Web mark-up language) documents, but can be in any number of common formats, such as word processed documents. Increasingly Intranets are also hosting transaction and database applications with the Web browser being the universal interface to different 'back-end' systems.
Thus an Intranet can connect everyone with everyone else, and can facilitate sharing of company information, and with Internet gateways external information. As with the Internet, the issues of organising and managing information becomes problematical. There is also the added tensions within an organisation of what is 'official' information and what 'informal'. Intranets are surfacing many organizational cultural issues, such as 'information politics'! (CIO 1996)
4.1 The ICT Contribution
In analysing knowledge work we found that information and communications technologies enhance knowledge processes and support knowledge workers in several ways:
These represent combinations of person-to-computer and person-to-person interaction. Access to relevant information is not just though information databases. It is common to have information screens that support business process applications. For example, at insurance company CIGNA, the knowledge of their best experts has been incorporated into help screens in their underwriter's desk top system.
4.2 Support for the Knowledge Value Chain
The number of ways in which computers support knowledge work is very varied and makes planing for it quite difficult. We have developed half a dozen frameworks that position the various support mechanism along different dimensions. We share two of the here. The first is along a knowledge processing value chain (Figure 2).
Figure 2 - Computer support for knowledge processes
First, computer support can make the input processes more effective. This means selecting information and knowledge that is relevant. Text summarising for, example extracts the key parts from a document, so that the reader can gain most of the sense in only a fraction of the original. British Telecom research has found that virtually no important meaning is lost with a 25 per cent abridgement of the original document. Data mining extracts new knowledge from existing data. It can find patterns that humans cannot, but considering many more dimensions and variables.
In terms of the knowledge base, what we found was an increasing emphasis of adding some context to the information. This might be a fuller description of the application of the information, an indication of the quality of the source, and many other little human touches that are often not found in formal databases, but which happen in day-to-day conversation. Some companies now add multimedia commentary e.g. the "expert speaks or demonstrates".
Finally, in terms of dissemination and use, as noted before it is the roll-out of Intranets and groupware that is having the most impact on knowledge management. The 'black box' expert systems, and other point solutions to knowledge problems, are growing in popularity for specific applications. However, Intranets and groupware are seen as a universal solution to the primary need for knowledge sharing, from best knowledge and expertise to the point of action, from those who have it, to those who need it. It provides a foundation for the sharing of information or 'explicit knowledge' as encoded in databases and 'tacit' knowledge, as partially transmitted in email and other conversations. Often computer communications help make the connections between people, who subsequently follow up with "richer" communications methods, such as videoconferencing or face-to-face. BP, for example, have rolled out videconferencing as a key plank of their knowledge management initiative, in their virtual teamworking project. This allows experts and knowledge workers to communicate effectively and share 'tacit' knowledge without the need to travel.
4.3 Layers of Infrastructure
Another useful perspective on the role of ICT in knowledge management is the role of technology infrastructure. If, as noted, technologies that allow collaborative work, such as the Intranet and groupware, are needed, what are the building blocks to have a truly effective infrastructure. Figure 3 shows the 'stepping stones' that together build an enterprise-wide and inter-enterprise collaborative infrastructures.
Layered elements of a collaborative technological infrastructure
They represent ever complex layers of functionality:
Not only are these technology layers, but they are process layers as well. The human and organisational factors become more important the higher the layer. Thus, BP found that for videconferencing to work effectively, needed personal coaching when it was introduced. If a knowledge support architecture is defined in terms of these levels, it clearly identifies the potential an organisation has to effectively create and share knowledge. Whether they realise this potential depends crucially on other factors, mostly organisational in nature.
5.1 Success Factors
Our research showed that the greatest inhibitor to knowledge sharing was inappropriate behaviours and organisational culture. The syndrome "knowledge is power" predominates too often. It is beyond the copse of this paper to go into the organisational and behavioural aspects, that were so important that they took two chapters of the six central chapters of our report (Skyrme and Amidon 1997). In summary, a number of recurring factors do stand out in a successful knowledge programme:
We will focus on the latter as it is the province of many information professionals. What we found was that those that were successful had successful developed a co-operative team that involved those with information management skills, IT knowledge (especially of Internet technologies) and change agents. However, we found a general lack of awareness among top management of the contribution of good information management. For example, identifying important knowledge is often an important starting point in a knowledge programme. Yet there was little appreciation that information resources management (IRM) through techniques such as information audit, could make a strong contribution.
Organisations are crying out for a systematic approach that gathers information, classifies it, adds value to it and supports the knowledge sharing process. We found that some of the management consultancies, whose business after all is "knowledge", were furthest ahead. Price Waterhouse, for example, not only have their KnowledgeViewSM database of best practices, but also have a taxonomy that aids sharing of information across business disciplines and industries, a knowledge centre, and many other features of good practice.
5.2 Implications for Information Professionals
The knowledge agenda and the growth of the Internet means that there is an opportunity to elevate the skills developed over many years in handling information to a higher level and become active in the knowledge agenda. Certainly the overall visibility of information professionals needs to be improved. On the one hand the Internet makes information more readily accessible to the end-user, thus to some extent by passing the need to get involved in mundane activities. On the other it has created a heightened awareness of what information is available, yet tools, such as search engines, may not be effectively used. Users are facing the information paradox - "drowning in data, yet short of intelligence". The implications for an information professional, that we draw from our analysis, are that you should:
5.3 Implications for Online Service Providers
The Internet is here to stay and growing in stature all the time. By now, most online service providers have recognised the inevitable and have strategies to embrace the Internet. However, they need to avoid the air of complacency that was evident a few years ago. The need for well organised information is as real as ever, but organisations will want to put it into their own frame of reference. The implications are therefore:
This paper has drawn together two main strands of current management focus - the Internet and knowledge management. Each has a momentum of its own. However, in combination, they provide a powerful driving force for business and individual opportunities. We have summarised some highlights from our research into this interaction and indicated some of the ways in which information professionals and online service providers can exploit this convergence.
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