Chapter 11
Knowledge Management
Jason C. H. Chen, Ph.D.
Professor of MIS
School of Business Administration
Gonzaga University
Spokane, WA 99258
chen@jepson.gonzaga.edu
What is Data Mining?
• Data mining – the process of analyzing data to extract
information (unknown patterns) not offered by the raw
data alone
• To perform data mining users need data-mining tools
– Data-mining tool – uses a variety of techniques to find patterns
and relationships in large volumes of information and infers
rules that predict future behavior and guide decision making
– A wide range of data mining techniques are being used by
organization to gain a better understanding of their customers
and their operations and to solve complex organizational
problems.
• An example
– Grocery Store in UK (see next slide)
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Customer
Relations
Process
Management
Resource
Management
Project
Delivery
Model
Project Management
Accounting and other
functional areas
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From “Old World” to E-World of Business:
Knowledge Management for “Paradigm Shifts”
“Old World”
of Business
E-World
of Business
REENGINEERING
_________________
IT-Intensive Radical Redesign
KNOWLEDGE MANAGEMENT
_________________________
for
“Paradigm Shifts”
RATIONALIZATION
___________________
Streamlining Bottlenecks
Radical Rethinking of the Business
and Organization
for a
“World of Re-everything”
AUTOMATION
__________________
Replacing humans with
machines
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Database vs. Datawarehouse
DBMS
Database
Data Mining
Datawarehouse
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Learning Objectives
• Understand the difference between data,
information, and knowledge.
• Define how tacit knowledge differs from
explicit knowledge.
• Describe why knowledge management is so
important.
• Understand how knowledge is generated
and captured.
• Describe a knowledge map.
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6
Real World Example
• Harrah’s found a way to double revenues by collecting
and then analyzing customer data.
• They mine their customer data completely.
• They use loyalty cards to track customer behavior and to
identify high-revenue customers.
• Harrah’s determined that these customers were motivated
by reduced hotel room rates and wanted quick service.
• They found ways to reduce lines and wait time.
• High-revenue customers rarely waited in any line.
• They found ways to keep customers coming back.
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COMPETING WITH
BUSINESS ANALYTICS
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Business Analytics
• Business Analytics (BA) is an ________
umbrella term including
warehousing business ____________
intelligence , enterprise
data ___________,
information management, enterprise performance
management, analytic applications, and governance, risk,
and compliance.
technologies and
• Business Intelligence (BI) is a set of ____________
processes used to describe business performance.
___________
• Companies find success through better use of analytics.
• Many companies offer similar products and user
comparable technologies.
• Business processes are among the last remaining points of
differentiation.
fact
• Focus on ____-based
management to drive decision making.
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What's The Difference? Business Analytics vs
Business Intelligence
• Business Analytics (BA) is a close cousin of Business
Intelligence (BI). Both are meant to help companies
make better decisions by analyzing business data. The
difference is in their methods, and in the general
direction of their analysis.
• Business Intelligence, the most common form,
data from the present and the
concentrates on ______
immediate past, and drawing conclusions from that.
• Business Analytics makes more of an effort to predict
the future using more complex tools relying heavily on
statistics to neural nets.
anything from _________
http://it.toolbox.com/blogs/inside-erp/whats-the-difference-business-analytics-vs-business-intelligence-58672
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10
The Architecture of BI
• A BI system has four major components:
warehouse with its source data
– 1. a data _________,
analytics (or analytical environment)
– 2. business ________,
a collection of tools for manipulating, mining, and
analyzing the data in the data warehouse;
performance management
– 3. business __________
_________ (BPM) for
monitoring and analyzing performance
interface (e.g., dashboard)
– 4. a user _______
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Fig. 1.3: A High-level Architecture of BI
1.
2.
3.
4.
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Business Analytics (cont.)
• Davenport and Harris
• Characteristics of strategic
suggest that companies
resources are:
who are successful
– valuable,
competing with business
– rare,
analytics have these five
– non-imitable,
capabilities:
– non-transferable,
–
–
–
–
–
Hard to duplicate
Uniqueness
Adaptability
Better than competition
Renewability
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– non-substitutable,
– combinable, and
– exploitable
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COMPONENTS OF
BUSINESS ANALYTICS
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To successfully build B.A. capabilities in the enterprise, companies
people
make a significant investment in their: 1)___________,
technologies 2) _______,
and 3) strategic decision-making __________
processes
Component
Definition
Example
Data Repository
Servers and software used to store data
Data warehouses
Software Tools
Applications and processes for statistical
analysis, forecasting, predictive modeling
and optimization.
Data mining process;
Analytics
Environment
Organizational environment that creates
and sustains the use of analytics tools
Skilled Work
Force
Work force that has the training,
experience and capability to use the
analytics tools
_________________
Forecasting software
package
Reward system
________________ that
encourages the use of the
analytics tools; willingness
to test or experiment
Harrahs and Capital One
have such work forces
Figure 11.6 Components of Business Analytics
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Components of Business Analytics
•
•
Data repositories - data warehouses sometimes serve
as repositories of organizational knowledge.
Software Tools – data mining is used to analyze data
in the data warehouse looking for “gems”.
– Four categories of tools used:
•
•
•
•
Statistical analysis
Forecasting/extrapolation
Predictive modeling
Optimization
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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Components of Business Analytics
• Analytics Environment – alignment of corporate
culture.
– Incentive system
– Metrics used to measure success of initiatives
– Processes for using analytics
• Skilled work force – experts are needed.
– Managers must set the example (CEO-level sponsorship).
– Require decisions be made using analytics.
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Knowledge management vs. Information technology projects
Knowledge Management Project
Information Technology Project
valued-added
•Emphasizes ____________
accessibility of
•Emphasizes ___________
information for users
•Support organization improvement
and innovation
information for users
•Adds value to content by filtering,
•Delivers content only
interpretation, and synthesis
•Support existing operations
•Require on-going user
•Emphasizes one-way transfer of
contributions
•Balanced focus on both technology
and culture
information
•Variety of inputs often precludes
•Assumes capture of all information
automated capture of knowledge
inputs can be automated
•Primary focus on technology
Then, is there a general rule to determine a project is a KM project or a IT project?
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KM Project vs. IT Project
• According to Davenport and Prusak point
out in their “________
33 1/3 % rule,”
– if more than one-third of the time and money
spent on a project is spent on technology, the
project becomes an IT project rather than a KM
project.
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Online Transaction Process vs.
Online Analytic Process
Real-Time,
Data Base
Relational DB
OLTP
(Daily operations)
(copied to)
Not Real-Time
Business
Transactions
__________
Business
__________
Intelligence
OLAP
Data Warehouse/
(Non-daily operations)
Data Mart
(for quick and easy access)
20
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A Generic Data Warehouse Framework
No data marts option
Applications
(Visualization)
Data
Sources
Access
ETL
Process
Select
Legacy
Metadata
Extract
POS
Transform
Enterprise
Data warehouse
Integrate
Other
OLTP/wEB
Data mart
(Engineering)
Data mart
(Finance)
Load
Replication
External
data
/ Middleware
Data mart
(Marketing)
API
ERP
Routine
Business
Reporting
Data mart
(...)
Fig. 2.3 A Data Warehousing Framework and Views
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Data/text
mining
OLAP,
Dashboard,
Web
Custom built
applications
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Discussion Question
• #3. What does it take to be a successful
competitor using business analytics? What
is IT’s role in helping build this competence
for the enterprise? [Business Analytics]
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
22
• Ans: Good data is at the core of business analytics.
Organizations must have high quality data that can be
accessed and examined very carefully and methodically.
• Data mining is key to finding the “gems” of information.
Organizations must be able to quickly turn their data into
valuable information that can be used for competitive
advantage.
• The corporate culture need to be aligned to an analytics
environment that includes: an incentive system; metrics
need to be used to measure the success of initiatives; and
appropriate processes for using analytics. Also, a skilled
work force (experts) is needed. To be truly successful the
managers must set the example (CEO-level sponsorship)
and the organization must require that decisions be made
using analytics. IT is key to providing the infrastructure to
enable and support such a movement.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
23
Learning Objectives
• Understand the difference between data, information,
and knowledge.
• Define how tacit knowledge differs from explicit
knowledge.
• Describe why knowledge management is so
important.
• Understand how knowledge is generated and
captured.
• Describe a knowledge map.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
24
Real World Examples
• Harrah’s found a way to double revenues by collecting
and then analyzing customer data.
• They mine their customer data completely.
• They use loyalty cards to track customer behavior and
to determine high revenue customers.
• Determined that these customers were motivated by
reduced hotel room rates, and wanted quick service.
• They found ways to reduce lines and wait time.
– High revenue customers rarely waited in any line.
• Found ways to keep customers coming back.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
25
Economic reliance on knowledge
workers is increasing
gap .
• Knowledge _____
• Customers and businesses want a more
integrated approach.
• Best to say you are in the knowledge
business.
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Working Smarter, Not Harder
• Overlapping Human/Organizational/ Technological factors
in KM:
PEOPLE
ORGANIZATIONAL
PROCESSES
Knowledge
TECHNOLOGY
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N
Why Knowledge Management?
• Business evolve from competing on cost, to
competing on value , to competing on
knowledge.
• Effectively managing knowledge as a
strategic asset will enable companies
– to adapt to new ways of thinking,
– to respond to change quickly and easily, and
– to adopt a broader view when defining
products and services.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
N
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What is Knowledge Management?
• Knowledge management is defined as the processes needed
to generate, capture, codify and transfer knowledge across
the organization to achieve competitive advantage –
Pearlson and Saunders.
• Knowledge management (KM) is a process of organizing
and structuring institutional processes, mechanisms, and
infrastructure to create, store, and reuse organizational
knowledge.
• Technology plays a significant role in managing knowledge
• Collaboration and innovation are essential to knowledge
management.
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Defining Knowledge Management
•
•
•
•
•
Intellectual capital is defined as knowledge that has been
identified, captured, and leveraged to produce higher-value
goods.
Intellectual property allows individuals to own their
creativity.
Intellectual capital is a synonym of KM
A position called “Coordinator for International Intellectual
Property Enforcement” was created by the US Department
of Commerce.
KM is related to IS in three ways:
1. IT makes up the infrastructure for KM systems
2. KM systems make up the data infrastructure for many IS
applications
3. KM is often referred to as an application of IS.
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N
Figure 12.1 The relationships between data, information, and knowledge.
Data
Data
Information
Data
Information
Simple observation of
states of the world
Data endowed with
relevance and purpose
Easily captured
Requires unit of analysis
Easily structured
Needs consensus on meaning
Easily transferred
Human mediation necessary
Compact, quantifiable
Often garbled in transmission
Knowledge
Knowledge
Valuable information
from the human mind;
includes reflection,
synthesis, context
Hard to capture electronically
Hard to structure
Often tacit
Hard to transfer
Highly personal to the source
More human contribution
Greater value
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The Content of Human Mind
• According to Russell Ackoff, a systems theorist
and professor of organizational change, the
content of the human mind can be classified into
five categories:
– Data: symbols or facts
– Information: data that are processed to be useful;
provides answers to "who", "what", "where", and
"when" questions
– Knowledge: application of data and information;
answers "how" questions
– Intelligence/Understanding: appreciation of "why“
– Wisdom: evaluated understanding.
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Value Chain Data of the
Enterprise
Data
Information
Knowledge
Intelligence
Wisdom
“Knowledge is information that changes something or somebody – either by
becoming grounds for actions, or by making an individual (or an institution)
capable of different or more effective action” - Pete Drucker.
Wisdom refers to our effective use of intelligence (or knowledge),
intelligence refers to our effective use of knowledge.
An organization learns what it knows by cultivating its knowledge ecosystem in
which information, insights, and inspirations cross-fertilize and feed one
another, free from the constraints of geography and schedule.
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Knowledge
• Knowledge is a mix of contextual information,
experiences, rules, and values.
• Richer, deeper, and more valuable.
• Consider knowing –
– What? - based upon assembling information and
eventually applying it.
– How? – applying knowledge leads to learning how to do
something.
– Why? – casual knowledge of why something occurs.
– (Figure 12.2 graphically illustrates these types of knowing).
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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Figure 12.2 Taxonomy of knowledge
Reasoning
Know-Why
Procedure
Information
Application
Know-What
Know-How
Experience
Source:H-W Kim and S. M. Kwak, Linkage of Knowledge Management to Decision Support: A System Dynamic Approach
35
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Discussion Question (extra)
• #2. What is the difference between tacit and
explicit knowledge? From your own
experience, describe an example of each.
How might an organization manage tacit
knowledge?
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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Tacit vs. Explicit Knowledge
Tacit knowledge is personal, context• _______
specific and hard to formalize and
communicate
Explicit knowledge can be easily
• ________
collected, organized and transferred
through digital means.
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Tacit is the knowledge we each, individually know from our experiences
and our thinking. It may not be easily communicated because it may not
be something we have every expressed in words, pictures or numbers ever
before.
Explicit knowledge, on the other hand, is the stuff we can point to, write
about, or otherwise communicate easily. The trick, of course, is to make
tacit knowledge explicit so we can communicate it to others. Each student
should have examples of both types of knowledge.
Tacit knowledge might be how to throw a baseball, hit a tennis ball, run a
marathon, solve a homework problem, etc.
Explicit knowledge examples might be the formula for a chemistry
project or financial calculation or the statistics of your favorite sports
team, etc. An organization might manage tacit knowledge explicitly, that
is by trying to get individuals to make their tacit knowledge explicit then
record it in a database, or by acknowledging the difficulty and by creating
communities of practice, gurus, and other people-based systems that
facilitate discussions and interactions as a means of transferring
knowledge.
38
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Types of Knowledge
What we Know
We Know
We don’t know
We know
what we know
We don’t know
what we know
What we don’t
know
(Explicit knowledge)
(Tacit knowledge)
We know
what we don’t
know
We don’t know
what we don’t
know
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Tacit and Explicit KNOWLEDGE
Oral Communication
“Tacit” Knowledge
50-95%
Information Request
“Explicit” Knowledge
Information Feedback
Explicit Knowledge Base
5 - 50%
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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The Four Modes of Knowledge Conversion
TO
Tacit
Knowledge
FROM
Explicit
Knowledge
Tacit Knowledge
A. Socialization
Explicit Knowledge
B. Externalization
(Sympathized Knowledge)
Transferring tacit knowledge
through shared experiences,
apprenticeships, mentoring
relationships, on–the-job training,
“Talking at the water cooler”
(Conceptual Knowledge)
Articulating and thereby capturing
tacit knowledge through use of
metaphors, analogies, and models
C. Internalization
D. Combination
(Operational Knowledge)
Converting explicit knowledge
into tacit knowledge; learning by
doing; studying previously
captured explicit knowledge
(manuals, documentation) to gain
technical know-how
(Systematic Knowledge)
Combining existing explicit
knowledge through exchange and
synthesis into new explicit
knowledge
C
Which mode is the one for classroom processes? _____
Source:
Ikujiro
Nonaka
John Wiley & Sons, Inc. & Dr. Chen, Information Systems
– Theory
and Practices
and Hirotaka Takeuchi, The Knowledge-Creating Company, 1995 41
Applying Knowledge Management
• KM is not a new concept, but one reinvigorated by
IT such as collaborative systems, the Internet and
intranets.
• KM is still an emerging discipline
• Ultimately, an organization’s only sustainable
competitive advantage lies how its employees
apply knowledge to business problems
• KM is not a magic bullet and can not solve all
business problems.
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FROM MANAGING
KNOWLEDGE TO BUSINESS
INTELLIGENCE
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From Managing Knowledge to BI
• Managing knowledge is not a new concept, but one
reinvigorated by IT.
• KM is still an emerging discipline
• Business Intelligence (BI) is a set of technologies and
processes used to describe business performance.
– BI is a component of KM.
• Business Analytics – use of quantitative and predictive
models, and fact based management to drive decisions.
• An organization’s only sustainable competitive advantage
lies with how its employees apply knowledge to business
problems
• KM is not a magic bullet.
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WHY MANAGE
KNOWLEDGE?
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45
Factors to consider in
Knowledge Management
• Information and knowledge have become the fields in
which businesses compete.
• Several important factors include:
1. Sharing Best Practice
2. Globalization
3. Rapid Change
4. Downsizing
5. Managing Information and Communication Demand
6. Knowledge Embedded in Products
7. Sustainable Competitive Advantage
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Figure 12.4 Reasons for Managing Knowledge. ©IBM Global Services
7. Sustainable Competitive
Advantage
1. Sharing Best Practices
•Avoid “ reinventing the wheel”
•Build on previous work
•Shorter life-cycle of innovation
•Knowledge as an infinite resource
•Direct bottom-line returns
•Inability to assimilate knowledge
•Data organization and storage
is needed
•Information and communication
2. Globalization
4. Downsizing
•Loss of knowledge
•Portability of workers
•Lack of time and resources
for knowledge acquisition
5. Managing Overload
Why Manage
Knowledge?
.
6. Embedded Knowledge
•Smart products
•Blurring of distinction between
service and manufacturing firms
•Value-added through intangibles
Source: adapted from IBM Global Service.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
•Decreased cycle times
•Increased competitive pressures
•Global access to knowledge
•Adapting to local conditions
3. Rapid Change
•Avoid obsolescence
•Build on previous work
•Streamline processes
•Sense and respond to change
47
Sharing Best Practices
• Sharing best practices means leveraging the
knowledge gained by a subset of the organization.
• Increasingly important in organizations who depend
on applying their expertise such as accounting,
consulting and training firms.
• KM systems capture best practices to disseminate
their experience within the firm.
• Problems often arise from employees who may be
reluctant to share their knowledge (managers must
encourage and reward open sharing).
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48
Globalization
• Historically three factors, land, labor and capital
were the key to economic success
• Knowledge has become a fourth factor.
• Knowledge-based businesses can grow without
traditional land, labor, and capital requirements.
• Key competitive factor will be how well an
organization acquires and applies knowledge.
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Other factors
• Rapid change: firms must be nimble and adaptive to compete
• Downsizing: sometimes the wrong people get fired when
creating a leaner organization
• Managing Info and Comm Overload: data must be
categorized in some manner if it is to be useful rather than
overwhelming
• Knowledge Embedded in Products: the intangibles that
add the most value to goods and services are becoming
increasingly knowledge-based
• Sustainable Competitive Advantage: KM is the way to do
this. Shorter innovation life cycles keep companies ahead of the
competition.
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KNOWLEDGE MANAGEMENT
PROCESSES
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Knowledge Management
• KM involves four main processes –
1. Generation – all activities that discover “new”
knowledge.
2. Capture – all continuous processes of scanning,
organizing, and packaging knowledge after it has
been generated.
3. Codification – the representation of knowledge in a
manner that can be easily accessed and transferred.
4. Transfer – transmitting knowledge from one person
or group to another, and the absorption of that
knowledge.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
52
Knowledge Generation
• Concerns the intentional activities of an organization
to acquire/create new knowledge.
• Two primary ways are knowledge creation
(exploration) and knowledge sharing (exploitation).
• Methods include:
–
–
–
–
–
Research and Development
Adaptation
Buy or Rent
Shared Problem Solving
Communities of Practice
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53
Shared Problem
Solving d.
(KS)
Buy or Rent
Creating (R&D)
c.
(KS)
a.
(KC)
KNOWLEDGE
GENERATION
b.
(KC)
Adaptation
e.
(KS)
Figure 12.5 Knowledge Generation Strategies
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Communities of
Practice
54
Research and Development
• Knowledge generated by R&D efforts frequently
arises from synthesis
• Synthesis brings disparate pieces of knowledge
together, often from extremely diverse sources, then
seeks interesting and useful relationships among them
• Realizing value from R&D depends largely on how
effectively new knowledge is communicated and
applied across the rest of the firm
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
55
Adaptation
• Adaptation is the ability to apply existing
resources in new ways when external changes
make old ways of doing business prohibitive
• A firm’s ability to adapt is based on two
factors: having sufficient internal resources to
accomplish change and being open and willing
to change
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
56
Buy or Rent
• Knowledge may be acquired by purchasing it
or by hiring individuals, either as employees or
consultants, who possess the desired
knowledge.
• Another technique is to support outside
research in exchange for rights to the first
commercial use of the results
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
57
Shared Problem Solving
• Also called “fusion,” shared problem solving
brings together people with different
backgrounds and cognitive styles to work on
the same problem
• The creative energy generated by problemsolving groups with diverse backgrounds has
been termed “creative abrasion”
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
58
Helping Fusion Work
• Ideas that help fusion work effectively include:
– (1) fostering awareness of the value of the
knowledge sought and a willingness to invest in it;
– (2) emphasizing the creative potential inherent in
different styles of thinking and viewing the
differences as positive;
– (3) clearly specifying the parameters of the problem
to focus the group on a common goal
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59
Communities of Practice
• Achieved by groups of workers with common
interests and objectives, but not necessarily employed
in the same department or location, and who occupy
different roles on the organization chart.
• Workers communicate in person, by telephone or by
e-mail to solve problems together.
• Communities of practice are held together by a
common sense of purpose and a need to know what
other members of the network know
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Four Basic Principles of
Knowledge Codification*
1. Decide what business goals the codified
knowledge will serve (define strategic intent).
2. Identify existing knowledge necessary to
achieve strategic intent.
3. Evaluate existing knowledge for usefulness and
the ability to be codified.
4. Determine the appropriate medium for
codification and distribution.
*Davenport and Prusak (1998)
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Knowledge Capture
• Knowledge capture takes into account the media to
be used in the codification process.
• The 3 main knowledge capture activities are:
• Scanning (gather “raw” information) – can be
electronic or human.
• Organizing (move it into an acceptable form) – must
be easy for all types of users to access.
• Designing knowledge maps (providing a guide for
navigating the knowledge base)
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*Organizing Knowledge
• Folksonomies – site for collaboratively creating and
managing tags for annotating and categorizing content.
• One scheme for categorizing knowledge uses four
broad classifications (Ruggles 1997):
– Process knowledge – best practices, useful for increasing efficiency.
– Factual knowledge – easy to document; basic information about
people/things.
– Catalog knowledge – know where things are; like directories of
expertise.
– Cultural knowledge – knowing how things get done politically and
culturally.
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Designing Knowledge Maps
• A knowledge map (see figure 12.6) serves as both a
guide to where knowledge exists in an organization
and an inventory of the knowledge assets available.
• A knowledge map can consist of nothing more than
a list of people, documents, and databases telling
employees where to go when they need help.
• Provides access to resources that would otherwise
be difficult or impossible to find
• Can capture tacit knowledge through narratives.
– Good stories are effective for knowledge transfer.
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Figure 12.6
Contents of knowledge maps
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Knowledge Codification
• Knowledge must be used or shared to be of
value.
• Codification puts the knowledge into a form
(representation) that makes it easy to find
and use (accessed and transferred).
• It is difficult to measure knowledge in
discreet units (since it changes over time).
• Knowledge has a shelf life.
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Knowledge Transfer
•
Nonaka and Takeuchi’s Knowledge Transfer
describe four different modes of knowledge
conversion (transfer):
•
•
•
•
Socialization: from tacit knowledge to tacit
knowledge
Externalization: from tacit knowledge to explicit
knowledge
Combination: from explicit knowledge to explicit
knowledge
Internalization: from explicit knowledge to tacit
knowledge
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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Key to Success:
A Learning Organization need to have
four characteristics critical to successful Knowledge
Management
N
E
W
S
CULTURE
LEADERSHIP
STRUCTURES AND PROCESSES
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
PEOPLE AS ASSETS
68
How to Succeed in Knowledge
Management
• A successful KM effort requires leadership
with
– vision,
– commitment, and
– an organizational culture that facilitates
collaboration.
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Manage Core Competency
Human Capital
Technologies
Wellspring of
Knowledge
Knowledge
derivative
Skill
Experience
Knowledge
Processes
Explicit,
Codified
Knowledge
Methods
Learning
Information
Communication
Industries
Core
Competency
Intellectual &
Intangible Assets
Learning
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Partnership
Patents
Data bases
70
Figure: From Organizational
Knowledge to Core
Core
Competency
Crystallize Core CompetenceCompetence
Generalize Best Practice
for Reuse
5
Best Practice
Produce Best Practice
Contextualize Organizational
Knowledge
4
Organizational
Knowledge
Quality
Information
Improve quality of
information
1
[process
knowledge]
Knowledge Hunting
Knowledge Hardening
Create Organizational
3
Know-what
Know-how
Know-why
Raw Information
Knowledge
Explicit
Knowledge
2
Make tacit
knowledge explicit
Tacit Knowledge
Information & Comm.
Technology Infrastructure
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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From Data to Knowledge:
How Can Organization Gain Competitive Advantage?
(Survive and Prosper in the Digital Economy)
Data
process
Information
Quality
Information
Available
-As a product
NOT byproduct
Decision
Making
Accessible
context,
experience
D. B.
Organizational
Knowledge
D.B.:
Structured: R-DBMS
Unstructured: Document Mgt. Systems
informate
Sharable
Collaborative
Reusable
K.B
D.W
automate
Useable
innovate
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
CRM
Accounting
Finance
Operations
Manufacturing
-As core intellectual capital
NOT merely a few smart employers
External
customers
N
72
• A wise CEO will make better decisions and
inspire greater loyalty and trust than just a
knowledgeable CEO.
-- Schrage, 1996
• Imagination is more important than
Knowledge.
-- Albert Einstein
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“Knowledge is the beginning of practice;
knowing
doing is the completion of ___________.”
知識是實踐所做事情的開始;
這樣做是在完成知曉
-- Wang Yang Ming, 1498
(one of great Chinese philosophers)
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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THE WORLD OF REEVERYTHING
• Knowledge is productive ONLY when
captured
in people’s mind
______________________.
Shareability requires decentralized
• ____________
intelligence.
knowledge workers
• We need to empower _________
• Top performers can be a problem; they are
humble
not the most _______.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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Sustainable Competitive
Advantages
• Any sustainable competitive advantages?
• How can an organization sustain its
competitive advantage?
• Firms may create/improve their competitive
advantages only if they:
– have capacity to learn,
– employ revenue management approach,
– learning to learn and learning to change
(life-long learning environment)
76
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CAVEATS FOR MANAGING
KNOWLEDGE
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Caveats for Managing Knowledge
•
•
•
•
KM and BI are emerging disciplines
Competitive advantage increasingly depends on
knowledge assets that are hard to reproduce, so it is
sometimes in the best interests of the firm to keep
knowledge tacit, hidden, and nontransferable
Knowledge can create a shared context for thinking
about the future, not to know the future, but rather to
know what projections influence long-term strategy
and short-term tactics
The success of KM ultimately depends on a personal
and organizational willingness to learn
Copyright 2010 John Wiley & Sons, Inc.
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FOOD FOR THOUGHT:
BUSINESS
EXPERIMENTATION
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Business Experimentation
• Thomke discusses business experimentation as a means
of innovation.
• Products and services are created and improved using
analytics through a process of experimentation.
• Companies who excel are able to create new products
and services at a fraction of the cost of others.
• Capital One is built around this methodology.
• Ran 1,000s of experiments on their bank’s customer
database to test and develop new ideas.
Copyright 2010 John Wiley & Sons, Inc.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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Business Experimentation
• Capital One had the following results:
– Increased business savings retention by 87%
– Lowered the cost of acquiring new accounts by 83%
• It is a concept of test and learn.
– Projects are managed as experiments.
– Projects are designed with a series of rapid iterations.
• Both Harrah’s and Capital One have built a core
competency in business experimentation and
analytics.
Copyright 2010 John Wiley & Sons, Inc.
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Conclusion
Literacy +
Electronic Infrastructure +
Social Revitalization =
Knowledge
distribution
Motivation
Opportunity for New
Societal Infrastructure
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Summary
• KM is related to information systems in three
ways: IT makes up its infrastructure, KM makes
up the data infrastructure for many IS and apps,
and KM is often referred to as an app of IS.
• Data, information, and knowledge should not be
seen as interchangeable.
• The 2 kinds of knowledge are tacit and explicit.
• Manage knowledge carefully, there are many valid
and of course legal reasons.
• KM projects can be measured using project-based
measures.
Copyright 2010 John Wiley & Sons, Inc.
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