More and more of our assets in a business are reverting to knowledge and information. This knowledge and information has a cost as well as providing a possible avenue of revenue. A large part of the business investment is in the solutions and knowledge to provide and support our systems. Protecting, building and improving what we have would be a wise investment.
So you would think. But how many businesses have their heads in the sand? How many still think that the solution is an IT solution? Isn't it the New Intra-net or our document filing system? isn't that the knowledge management thing, that should take care of it, won't it?
More and more we hear this and more and more businesses are losing money. A simple example is if 80% of your staff is spending 30 minutes a day looking for information to carry out their job. What is the cost in lost productivity to your company?
It has been calculated the average salary at a company is about $80,000. This figure would be higher if you were to consider contractors and consultants. And the company employed 100 staff members, 80% of this figure is 80 staff. 30mins a day for a full year based on a 48 week working year, working 5 days a week, 9-5. This is being conservative, considering that most staff work well outside this range of time. The figure equates to 6.66% of a staff members time over that year is devoted to searching for information.
That’s 120 hrs which equates to $5,333.33 for the 80 staff members or $426,666 annually.
Providing resources to search and find relevant and contextual information 10 minutes sooner would save $142,222 a year in lost productivity. This is just one area of the business which is losing productivity based on not having the ability to locate information. The other side of the coin is creating value with our knowledge and returning an income for our investment.
In the article “The Cost of Knowledge” (Jacobson and Prusak, 2006) KM has become synonymous with searching for knowledge or information. This has been achieved by eliciting knowledge from experts and then adapting the gained knowledge. The time used by knowledge workers in searching for knowledge is about 10.2%, most of their time is in the eliciting, meeting and adapting that knowledge.
Many companies spend a large part of their time in eliciting and adapting information, but sharing of that knowledge or information is weak. Based on the figures above how much is your company losing. If they are wasting the sort of money indicated of productive time how much of the businesses investment in experts and external consultants are you wasting or not providing a true ROI.
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