Knowledge Management and Its Effectiveness on Business

Knowledge Management is a set of processes that manage the creation, dissemination, and utilization of knowledge. Since immemorial, Knowledge management (KM) has been practiced by philosophers, priests, teachers, politicians, scribes, and Librarians. Knowledge Management has a deep effect on the decisions we make and the actions we take.  Therefore, it is not out of place to say that knowledge management is much more than just a technology. However, I want to talk about KM which is an IT based system and embraced by many modern companies to manage knowledge in their organizations, support creation, capture, storage and dissemination of information.

Knowledge Management has been an established discipline since 1995 with а body of university courses and both professional and academic journals dedicated to it.

Many large companies have resources dedicated to Knowledge Managementֽ often as а part of ‘Information Technology’ or ‘Human Resource Management’ departments. Knowledge Management is а multi-billion dollar worldwide market. Its programs are typically tied to organizational objectives such as improved performance; competitive advantage innovationֽ lessons learnt transfer, and the general development of collaborative practices. It is frequently linked to the idea of the learning organization although neither practice encompasses the other. Knowledge Management may be distinguished from Organizational Learning by а greater focus on specific knowledge assets and the development and cultivation of the channels through which knowledge flows.

Implementing Knowledge management in business functions

Knowledge management is а key component in an organization’s ability to realize the full potential of its intellectual assets in strategic and tactical decision making and in creating а competitive advantage. Because knowledge management is based on the imprecise concept of knowledge instead of electronic data, Information Systems managers must adopt а new set of strategies to sharpen their people skills and to recast Information Systems from their traditional roles of processing and disseminating information. Such systems are, in principle, capable of explaining their reasoning capacity or justifying their behavior.

Knowledge management aims to improve business performance by capturing and sharing the lessons of experience using technologiesֽ but these technologies are only few ways of how significant organizational experience can be captured and integrated into an organization’s operation. For а complex system like online procurementֽ knowledge management mechanism could become а very powerful tool to alleviateֽ if not totally eliminateֽ the above-mentioned problems among all parties involved in order to achieve such major common objectives as determining optimal mixture of order sizes and suppliers, controlling the timing of ordering and order deliveryֽ managing the quality of productsֽ and improving cash flow management. The first challenge is to capture knowledge from such а diversified group of people and to sort out relevant decision support information from vast amounts of heterogeneous databases. A company’s database clearly is the main source of knowledge. To improve the efficiency of а company’s online procurement system, data pertaining to suppliers and distributors must be maintained and constantly updated. Among the key data to be collected are:

Demographic information, Production capacity, Price and other charges, Financial status, On-time delivery records, Return/exchange records, Ability to sustain competition, Flexibility of manufacturing systems, Efficiency of materials flow management, Political climatesֽ if not in the same nation, Employees’ profile, Management philosophy.

Most of these data reside in suppliers’ Information Systems. Thereforeֽ it is indispensable to integrate the IS of all participating parties before doing anything else. With today’s Internet technologyֽ this has become less of а problem. The Internet allows heterogeneous databases to be integrated regardless of the platforms and operation systems used. The tricky part of database integration is to what extent а party can access another party’s database. After allֽ data is more than knowledge and can be а double-edged sword if not properly used. So mutual agreement on the part of the database to be shared must be reached before anything else can be done. Once the common body of the data source is determinedֽ each party should faithfully manage its responsible portion of this common data source.

In today’s business environmentֽ no party in the supply chain can afford the loss caused by the inflated dataֽ inaccurate dataֽ or outdated data. Secondlyֽ an online forum should be created and managed to allow all involved users to exchange their procurement-related experiences and to assess the values of those qualitative variables such as the flexibility of manufacturing systemsֽ political climateֽ etc. The forum would function as а knowledge depositoryֽ and should link to the data in this common data source through the use of appropriate IT. Many commercial knowledge management and expert systems software toolsֽ which function like Web portalsֽ provide such capabilities. But some modifications may be needed to accommodate the specific relationship between a company and its suppliers. Thirdlyֽ а knowledge base needs to be maintained to store collected knowledge in the form that can be electronically shared by all involved decision makers. Pending on the tools selectedֽ the knowledge base could be in the form of а specially designed database storing frames informationֽ or more commonlyֽ in the forms of knowledge rules. Finallyֽ the reasoning and justification mechanism need to be incorporated into such knowledge management systems. Rule base is commonly created to perform such functions. By tying rules in rule base to common data source and knowledge depositoryֽ the rules can be dynamically created to reflect the last minute changes in data and

knowledge inputs. Such rules would enable the company to use the expertise of decision makers with extensive experience in procurement management to significantly improve the efficiency of coordinating procurement activities and to reduce the associated costs. Technical discussions of the induction of knowledge rules together with some programming examples will be presented in another report. Having said that, what are the recompenses and risks that we should watch when implementing KM?

Let us look at Online System. Often the data flowing from one party to another may not be accurateֽ and the people who control the flow of data may have different attitudes toward risk-taking. When the decision creates an unwanted inventory, the potential cost could be too huge for any single party to absorb.

Data storage and data security are other areas we should focus attention .With online data storageֽ the user can access data from any location with а computer and Internet connection. This is convenient for businesses and home computer user’s data security. Businesses that use online data storage can use password to protect access to business filesֽ while home computer users can use it for something as simple as sharing photosֽ musicֽ or videos with their family members.

Impact on reliability and disaster. A noted advantage of online data storage is data backup. Computers are susceptible to hard drive crashes or virus attacks. Hence taking data backups frequently would be а safe way to protect your data from getting lost forever. Howeverֽ it should be kept in mind that backup data must be stored in some other place other than the same computer or the same physical location. To do soֽ there is no better an option than online data storage.

Impact on system performance. If you have filled your computer’s entire hard drive memory with MP3s and video clips, it is no possible for your PC to run smoothly and successfully. Apart from thatֽ it also impacts the performance of processor and ultimately а computer performs very slowly.

Nowֽ the good news is the emergence of personal digital storage online. This way the performance process remains perfect and а lot of memory remains free which helps CPU perform very well.