Knowledge Management (KM) its about a Cultural shift not an IT solution.

‘It’s not about creating an encyclopaedia that captures everything that anybody ever knew. Rather, it’s about keeping track of those who know the recipe, and nurturing the culture and the technology that will get them talking” (Arian Ward, of Work Frontiers International)

This takes the emphasis away from creating vast knowledge repositories, and places the higher value on the knowledge which is in people’s head and finding ways to increase the mobility of that knowledge.

The essence of our companies in the new economy will be its capacity to create, transfer, assemble, integrate, protect and exploit knowledge assets. These knowledge assets are chief to most businesses if you are repeatedly to use your solutions in the most cost-effective manner. Unless you learn to nurturer, invest and manage your assets you will not add to the current asset and potentially lose more productivity income.

So what is knowledge management?

Why is it important to your business? And

How will you begin to nurture and manage this asset to increase your return?

To manage knowledge you need to know what it is we are going to manage. There is a need to map and define all the knowledge assets in the organisation and the flows of that information both internally and externally to the business.

Many of my discussions with companies result in comments ranged from “What Knowledge” to “that’s an IT issue” or “that’s not my problem”. These couple of statements provide a real concern on what companies are currently losing. It’s important that members of your organisation understand who and where these assets are located.

KM is not only about information, it is about the people that you have recruited, trained, developed, and promoted within your organisation. KM involves not only setting up a software solution; it involves understanding your business needs, your organisation’s culture, and your personnel. To succeed, any KM initiative needs to know your people and clearly define the behaviours that need to be changed or reinforced.

The benefits of KM can be extensive, but getting the most from a KM initiative is no easy proposition. However, if the people issues are effectively managed, your organisation's chances of success are high. KM is much more effective if it is not a stand-alone button on somebody’s PC but it integrated into a key business process. Most importantly KM is not an IT or HR solution; IT only provides the supporting infrastructure.

HR is involved as one of the parties that will start to depend on many of the tools and solutions a KM initiative can offer. Control and direction needs to involve and be managed within the company. It is the role of the Chief Information Officer (CIO) or Chief Knowledge Officer (CKO) reporting to the CEO, and it must be linked to your business strategy to create value to both our employees and the company.

Knowledge Management - "that's an IT thing is'nt it?"

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.