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Knowledge Management in Organizations

Online Course: Knowledge Management in Organizations
What is it and where does it come from?
Some people may think that knowledge management is, again, "the same dog with another collar". Many skeptics consider (we might even say "naturally"), that any new approach is, really, an old or wrong thing.

As a matter of fact, knowledge management is new and is old, as any other thought system that has a value, ant that the combination of ideas that support it (and of which we are all aware) should restore faith on the theme to the interested people. The idea of knowledge management doesn't come from consultants, it constitutes the practical and substantial response of executives and specialists to the needs of economy and society: globalization, communication technology and the cognitive perspective of businesses or organizations in general.

Globalization takes good part of the responsibility. World trade complexity and volume have no precedents; the number of competitors, products and distribution channels grows constantly. Even under the influence of ICT development a frenetic atmosphere is created in companies that see themselves compelled/constrained to accelerate their competitive roles in markets every time bigger, competitive and complex. This acceleration in an uncertain space forces these organizations to ask themselves:

  • What do we know?
  • Who knows it?
  • What we should know that we don't know?
  • Who needs to know what?
  • Does our organization learn (acquire knowledge) from outside of itself?
  • Do we measure and assign a a value to our cognitive assets?

A non intentional consequence of using ICT is the higher value of knowledge that is not digitalized, coded or easily distributed over information and data. In the same measure with which access to information is amplified and and diversified, the value of cognitive abilities not yet represented in a way to have them managed grows constantly. As a result, cognitive components such as evaluation, design, leadership, persuasion, discernment, creativity, innovation, esthetics and sense of humor acquire a higher value. It is already recognized that, though information is one of the most important assets in an organization, the meaning of these cognitive abilities is accepted with more depth and width. The price that many companies pay for the omission of these perspectives reflects these consideration. This wave, though predictable, has become a tsunami that has found many software producers specialized in information and data processing to redefine knowledge management in a way very (and dangerously) reductive as "data and document transfer".

knowledge management comes from the understanding of the critical value of the other factors, less typical than document or data, and the awareness o the need for finding modes to sustain it and get from it strategical benefits. The difference between organizational knowledge and information and data is, aside from effective, intuitive. For many "of the trade" knowledge seems to be a fundamental residual that in itself explains internal productivity after you have evaluated everything. After a brief analysis, it's easy to understand that even a "perfectly managed" information leaves us far away from the Nirvana of highly effective productivity and innovation. The topic has been enough developed and mature as to detach it from its theoretical field. It's already possible to organize real knowledge management projects.


The demonstration of terms of reference: data, information and knowledge

Data are facts about events. The quantity of money or goods in a transaction are "data". Databases are essential to gather and store data and to organize reports. These reports are made of formatted data, and because of this added value these reports can be considered "information". Data are important to measure costs, speed, quantities, totals, capacities, etc. of the organization. Without an interpretation, more data are not worth more than less data. Decisions require data that are converted in useful information, "consumable".

Information is made of gathered, organized and interpreted data. If data are letters, organizing letters in intelligible words, is information. If data represent clients, organizing this list in a usable format, may be the necessary information.

Information requires a communication process between the sender and the receiver. Information may be a "beep" or an audible message that tells that someone is at the door. The beep shapes the data and tells that we must act. Normally, the receiver decides when the message is really information or just "noise" or another type pf data. Message contents can be be accidental or reflecting the judgment, ability or intelligence of the sender. "Noise" restricts communication. There's no noiseless communication.

Information moves across an organization in the form of paper, voice or digital document. Examples are paper mail, HTML pages, magazines, voice mail and other computer based transmissions. Information can be generated by people or machines. Information storage and transmission depend a lot on technology.

Knowledge is the result of a learning and change of behavior process that happens in an individual after having internalized information. Knowledge is an integration of values, experiences and information as part of a mental model.

Organizational knowledge is the result of an integration of collective thinking materialized in best practices, staff mental models and business process management, and as much tacit knowledge control and management. Also enterprises have a perception, a dynamic memory and a long term memory.

"Best practices" are in constant evolution and subject to revolutions.

Knowledge is built in the minds of people, of experts. Collective knowledge in an organization is evidenced in their business attitude and behavior. Information production, organizational routines, business processes and business culture, build up the essence of company behavior. Organizations (businesses, government, and others) are very careful of not not confusing knowledge with information or knowledge management with information technology.


Cognitive technology: knowledge bases

  • Data are discreet elements.
  • Text information and lists are linear, continuous.
  • Knowledge is structural, reticular, made of nodes and relations, multidimensional. It's always open. Knowledge bases are the tools for managing knowledge, for reasoning for representing processes and for processing ideas. Textual information is not knowledge, it contains coded knowledge, to be decode, to evaluate.

Knowledge bases have associated functions for analysis, simulation and searching: semantic searching, categories and searching in database like structures. A knowledge base, because of its graphical interface (semantic or conceptual network) is the consistent platform for exercising creativity and innovation, for business intelligence analysis.

In knowledge management, for the analysts, Knowledge Managers or executives, it's often most convenient to associate data structures of his own to the knowledge base for calculations, analysis, searching, project management and simulations. This permits working with several data types without leaving the cognitive environment. There some activities in an organization (company or any other type) that are specially facilitated, opening the way for many evaluations and valorizations:

  • Project management.
  • Process modeling and management.
  • Tacit knowledge capture and management.
  • Reduction of complexity.
  • Brainstorming management.
  • Pareto 80/20.
  • Causal Loop.
  • EFQM (European Framework for Quality Management).
  • Value Chain.
  • Competitor Analysis.
  • SWOT (Strengths, Weaknesses, Opportunities, Threats).

Many of these productivity resources are already embedded among the fundamental templates for business analysis of Knowledge Master. Some can be built with available resources in knowledge management.

Besides, Knowledge Master cognitive technology contains contents management solutions.

knowledge management knowledge base contents can be exported to most used exchange formats, even en evolved technological contexts, This means that a Knowledge Master knowledge base contents can be exported to XML, reusable in any data base system, to HTML, having it independently, in any browser, or its data, to CSV.


Knowledge and information technology

Technology is is a fundamental component of knowledge management, but it's human interaction with information represented in cognitive format (semantic networks, conceptual knowledge bases), what permits and simplifies reasoning, innovation, in an individual or in an organization.

It is correct to recognize departments such as MIS (management information systems) or IT (information technology). MIS and IT departments deal with how technology can be better used to serve the aims of the organization. knowledge management deals with enterprise capacities and business knowledge that affect the way in which an organization is managed. Every concept of knowledge management is applied the same way to a company or a government agency or organization, to a voluntary service or any other organization. Every organization, from those made of only few people (or professional office) to huge companies needs methods or tools to gather represent, store and share knowledge. knowledge management and IT have a symbiotic relationship. IT facilitates fast sharing of cognitive structures, but it is the human being (wetware) what determines the expert and higher analysis with which to contribute to (and derive from) the knowledge system.

Even though data and information are mandatory tributaries to knowledge management, rational (and irrational) analysis that stimulates creativity and leads to innovation cannot be replaced with a deep search (or data mining) in a database (or datawarehouse). How can a process be represented, or complexity reduced in such other way different from a structural, reticular representation. Business intelligence is based precisely on these principles.

Managing a vast quantity of information is rises complexity and is expensive. Analysis abilities and creativity are not stimulated by a huge volume of data.

Knowledge management and information management aren't mutually exclusive, but they benefit reciprocally. Both resources are indispensable, though different things.


"Business", organizational knowledge.

We know that, as mean, 90% of workplace knowledge is of the tacit type: "tacit knowledge". To present it in an Euclidean optic, would it be possible to replace an efficient employee with data or documents?

Intuitively, most people perceive that the term knowledge implies a wider, richer, more intellectual view of the world (and also in the more circumscribed context of a company or organization) than information o data. Knowledge is created and shared by human beings. These are not concepts from psychology, that deals little with data or information processing. Though the definition has a very consistent logical value, its application is very pragmatic.

This definition clarifies that knowledge is something simple and evident. It's not storable though it can be represented. It's "manageable" only when it is represented. Knowledge is as fluid as people that build it and use it. Knowledge exists in people as part of the complexity that makes us humans. It may seem like a very concrete or very abstract thing.

Transformation of information into knowledge happens when people: 1) compare and integrate new information with previous knowledge; 2) imagine consequences of their decisions and actions; 3) share and compare ideas with others.

 Absurd (though frequent) expressions:

  • "the system is based on knowledge management, that is evaluated through a specific reading" ... to "certify competences".
  • "The output of a deep and very detailed search helps to understand the problem and to plan the future".

Understanding of economists, strategists. faculty and analysts of the fact that a a company can be better considered as an integration of its capacities in some way related to its history and limited in its efficacy by its cognitive and social capacities. The principal component of an organization is specially knowledge, that is mainly tacit and specific. These ideas have had a high impact on executives through the press, books, management development programs, courses and conferences. Though the new ideas have displaced the old concept that companies are mainly information processors, productive machines and rigid almost military structures, demonstrate powerful enough to organize knowledge management.


The company learns

A company learns by doing. Employees learn from experience. If a company is able to better manage the learning process, it can overcome the limitations imposed by the concept of tacit knowledge itself - it can raise its efficiency. Learning in organizations goes far beyond training and courses, and the the development of these strategies is one of the most important aspects of knowledge management.

Regarding business learning, another stimulant of knowledge management that originates from economy and more directly from Knowledge Managers, (or knowledge engineers) is how to discover or detect variations of effectiveness. Why do organizations that do the same global operations reach their results in a substantially different way, even if workers have access to the same information, technology and company resources?

An example from history: A well known multinational company dedicated to deep well drilling decided to analyze, using a cognitive approach, why some of their plants had different levels of effectiveness in their drilling. They found out that there were differences between knowledge and practice, knowledge that is tacit and not documented. As a result of their efforts to to obtain that this knowledge could be used globally, the company achieved meaningful levels of saving and a legendary status in knowledge management circles.

Sociological studies about this revolution (and the underlying principles to "working with knowledge") crystallized and valorize the clear sensation that something different is happening at a global level at the work place.

There's a strong interest in research about the complex structures of working communities that have an obvious relevance to knowledge management. All agree that knowledge exists and grows inside these structures, and have started to study these networks and communities.

Almost since the beginning, knowledge management explored the differences between tacit knowledge and explicit knowledge, between "knowing how" and "knowing what". This essential distinction, known ever since antiquity, seemed forgotten when an extraordinary number of systems for routine work automation was put in circulation. It's astounding the quantity of available data (not costless). The paradoxical consequence is the impressing increment of the value of tacit "non formalized" knowledge, that does not exist in databases and therefore is not searchable, findable or even less, identifiable. These asset has two sources: one is scarcity (the value of expertise, that can't simply be copied, and even less made readily accessible); the other one is the practical application of this knowledge.


Practice

The activities that mainly contribute to knowledge management are information management, quality culture and practice (innovation), human factors (human capital) and the results of business intelligence analysis and approaches.

Information management deals with information aspects, in terms of valorization, of operation and control techniques and access schemes, In this case "information" means documents, data and structured messages.

Knowledge Management cleared that not all information is created equally, and that different types of information have different values and therefore must be managed in different ways. This perception (that applies better to knowledge) remains in the DNA of knowledge management. We can see in practice which techniques or technologies are most appropriate for the different types of knowledge sharing and consumption, not only for their availability.

Quality assessment techniques were applied to production processes, while knowledge management has a wider objective, that includes processes that do not seem that can be measured or that are ill defined. Nevertheless, an important part of it consists (among other things) of rendering knowledge visible (or make it emerge), and therefore develop knowledge processes and control structures. This approach is inherited from quality improvement and analysis activities and methods developed for quality systems.

In practice, our understanding of human capital (and the importance of the corresponding investment), tends to be distorted or diluted. The essential message of human capital researchers is the financial advantage of organizations that invest in people, mainly in education and training. This type of investment has a higher return rate (in the form of higher work productivity and development of abilities) than all other options. Most organizations still see their employees and training programs as expenses, more than as investments.

Unicity of knowledge management
Considering that knowledge has always the same format and structure, in whichever context knowledge will always be represented, managed and used with higher benefit using the corresponding structures, conceptual knowledge bases. Some examples:
  • Companies of every size or activity
  • Government agencies or organizations.
  • Consulting offices.
  • Legal offices.
  • Libraries and information centers.
  • Generally, any knowledge based organization.

Consulting on Knowledge Management and Business Intelligence

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