Lecture 5 Term 2
7/2/12
Customer Relationship Management Systems
•
Business value of customer relationship management
• Increased customer satisfaction
• Reduced direct-marketing costs
• More effective marketing
• Lower costs for customer acquisition/retention
• Increased sales revenue
• Reduced churn rate
•
Churn rate:
•
Number of customers who stop using or purchasing
products or services from a company.
•
Indicator of growth or decline of firm’s customer base
Enterprise Applications: New Opportunities and Challenges
•
Enterprise application challenges
• Highly expensive to purchase and implement enterprise
applications – total cost may be 4 to 5 times the price of
software
• Requires fundamental changes
•
Technology changes
•
Business processes changes
•
Organizational changes
• Incurs switching costs, dependence on software vendors
• Requires data standardization, management, cleansing
Knowledge Management…
4
Knowledge Management
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KM, it’s like riding a bicycle…
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Systems That Span the Enterprise
•
Knowledge management systems
• Support processes for acquiring, creating, storing, distributing,
applying, integrating knowledge
• Collect internal knowledge and link to external knowledge
• Include enterprise-wide systems for:
• Managing documents, graphics and other digital knowledge objects
• Directories of employees with expertise
Definitions
Knowledge
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Knowledge is a fluid mix of framed
experience, values contextual
information and expert insight that
provides a framework for
evaluating and incorporating new
experiences and information
(Davenport and Prusak, 1998)
 Explicit Dimension
 Tacit Dimension
Knowledge Management
An organisation’s ability to
effectively acquire, create, retain,
deploy and leverage knowledge
Knowledge Hierarchy
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Knowledge
Information
Data
The Knowledge Continuum
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The Knowledge Evolution
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 Hard and soft data (Mintzberg, 1975)
 Managers get more information and knowledge
from face to face meetings than they do from
documentation/ repositories (Kefalas,1973;
Keegan, 1974; Mintzberg, 1975; Eisenberg, 1984;
Davenport, 1994; Davenport et al., 1998)
 “Knowing who to consult” (Keegan, 1974; Simon,
1977)
The Knowledge Evolution…
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 Strategic Scanning (El Sawy, 1985)
 Accommodation Information
 Assimilation Information
 Proposed Solution:
 “Programs that allow users to record their creative ideas,
provide editing, organizing, and outline facilities that later
rearrange those thoughts into topics and give each topic a
separate heading and sub-heading”.
Explicit and Tacit Knowledge
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 Explicit Knowledge
 formal / codified
 documents, best practices, databases, proposals
 Tacit Knowledge
 informal / uncodified
 experiential, within employee’s head,
 hard to effectively capture and share
Knowledge Economy/Society
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ENTERPRISE
LAND
KNOWLEDGE
CAPITAL
LABOUR
The Knowledge Management Landscape
• Sales of enterprise content management software for
knowledge management expected to grow 15 percent
annually through 2012
• Information Economy
• 55% U.S. labor force: knowledge and information workers
• 60% U.S. GDP from knowledge and information sectors
• Substantial part of a firm’s stock market value is related to
intangible assets: knowledge, brands, reputations, and unique
business processes
• Knowledge-based projects can produce extraordinary ROI
Management Information Systems
Chapter 11 Managing Knowledge
The Knowledge Management Landscape
U.S. Enterprise Knowledge Management
Software Revenues, 2005-2012
Figure 11-1
Enterprise knowledge
management software
includes sales of content
management and portal
licenses, which have been
growing at a rate of 15
percent annually, making it
among the fastest-growing
software applications.
KM, a fad?
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 Knowledge is not new
 People in organisations have always sought, used
and valued knowledge
 Companies hire for minds rather than hands
What’s your Strategy for Managing Knowledge?
(Hansen et al., 1999)
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 Codification Strategy
 Computer centred
 Captured and stored in database
 Personalisation Strategy
 Associated with an individual
 Shared person to person
People Broker
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 Locate “experts” to help solve business problems
 Link “knowledge holders” to “knowledge seekers”
 Transfer valuable “Tacit” Knowledge
Role of the Chief Knowledge/Learning Officer
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 Build organisational knowledge culture
 Create knowledge management infrastructure
 Make it all pay off
Learning Organisation
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 “the sum of individual knowledge used in the value
creation process and the knowledge embedded in
collective action”. (Von Krogh et al.,1996, pp.227)
 Organisations ability to :
 Have a memory
 React
 Make decisions
Knowledge Management and IS
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 “‘Techknowledgy’ is clearly part of Knowledge
Management” (Davenport and Prusak, 1998)
 KM is 80% about organization, and 20% about IT
Basic Features of a Knowledge Management
System (KMS)
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 Storage
 Publishing
 Subscription
 Reuse
 Collaboration
 Communication
Searching and Filtering Knowledge
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 Knowledge should be
 Intuitively accessible
 Searchable to find relevant knowledge
 Inform how things get done
 Alternatively you should be able to connect to
experts
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KM Technology
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 Solution which complements strategy
 Technology is an enabler
 Customized solutions which integrate with work
processes


Non invasive
Build on Web and Email platforms
 Combination of tools and technology
 Search / Categorization / Messaging / Collaboration
Examples of implemented KMSPharmaceutical
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 Business
 Prosthetics manufacturer
 Technology

LINK (Leveraging Internal Knowledge)
 Web tool facilitates

Expert finder


Ability to index sent items folder


Describes people who might be working on things that you might
be working on
Enables a user to build a personal work profile
“Brokers Discussions”
Continued…
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 Making it pay
 Reduced length of time to uncover knowledge related to a
clinical trial by finding existing experts in the area within the
organisation
Manufacturing (1)
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 Business

Box design and manufacturer
 Technology

InnoBook: An interactive database of box design concepts,
continually updated by over 300 designers
 Utilised by 250 sites across Europe
 Each design department has access to all designs
and uses the system to search for base designs
when an order is placed
Continued…
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 Designers motivated to contribute their box
designs to the repository
 Initial reluctance to the utilisation of designs
contributed to the system by other departments,
question mark over the quality of the design not
produced by the local team
 Making it pay


overcomes localisation of box design knowledge
avoiding ‘reinventing the wheel’
Manufacturing (2)
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 Business

Multinational data storage device manufacturer
 Technology

Primus a knowledge repository for customer solutions
 Implemented by Customer Service Team in two
locations – European and US
Manufacturing (2)
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 Objective

to manage customer support knowledge issues by breaking
down a problem or situation into its knowledge components

to classify knowledge about the problem received or add new
knowledge about the problem
Continued…
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 Making it pay
 build
a knowledge base of solutions and
solve customer’s problems in a more time
efficient and effective manner
 to
provide an integrated approach to
problem resolution and a solution for
managing the knowledge across the CS
group
Conclusions?
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 People are the key to successful knowledge
management
 IS may be identified as one factor that can enable
the capture, storage, creation and dissemination of
organizational knowledge
But:
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The focus on utilising organizational knowledge
should be on a dialogue between two individuals or a
community of practice and not knowledge objects
stored in a database (Hansen et al., 1999)
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