Knowledge management appears on ERP radar: Page 3

Posted February 22, 2000

Alan Radding

(Page 3 of 3)

Knowledge management appears on ERP radar

American Century Investments of Kansas City, Mo., has taken the PeopleSoft approach to knowledge management one step further by implementing the vendor's Enterprise Performance Management (EPM) offering. EPM is a set of analytical applications running on top of the core PeopleSoft modules that extract key cost and profit information for use in balanced scorecards.

The 41-year old diversified investment firm has grown rapidly, from about $23 billion in assets in 1993 to over $90 billion in assets under management last year and foresees no letup in sight. During this rapid growth, managers found themselves making decisions based more on intuition than on solid information or proven knowledge, notes Roby Shay, director/information technologies. The company found itself scrambling to provide managers with solid information about its products, customers, and channels--knowledge they could use to make decisions.

A long-time PeopleSoft shop, the company jumped at the EPM offering. Previously, American Century manually constructed the kind of models provided by EPM using spreadsheets. The effort generated useful results, but it was labor-intensive and still only produced two-dimensional views of the information. Deeper insights from the information required multidimensional analysis. At the least, managers wanted to look at the customers, the channels, and the products, Shay explains.

The company has not yet rolled out a full production implementation of EPM, but the pilot results look promising. "With this software we will be able to more clearly define the business and the things that sustain a piece of the business and, ultimately, get better cost information. This will help us determine if a piece of business truly is profitable," concludes Shay. Maybe this isn't classic knowledge management, but it is far more than the seat-of-the-pants intuition managers relied on previously.

The foundation is already in place

Business process knowledge, however, consists of more than just information, insists Greenbaum. It forms another major component of knowledge management. ERP solutions typically capture both information and process, although most knowledge management efforts focus primarily on the information part.

The process knowledge in ERP solutions takes the form of business rules. "Business rules are encapsulated in the software," Greenbaum points out. A business rule, for instance, can define how orders are prioritized and scheduled for production or how customer credit is handled.

To date, Arvin has handled the process side of business knowledge manually. "ERP systems capture business process knowledge, but we haven't tried any of the automated tools to work with process knowledge," Lipe notes. The latest release of JDE offers automated process mapping, but Arvin hasn't implemented it yet. Still, process knowledge capture and sharing is on Lipe's agenda for future initiatives.

With an ERP system and a network in place, organizations already have the foundation for knowledge management. All that is really required, suggests Shepherd, is a flexible database, a network, and a set of applications to capture knowledge from both information and business processes. From there, organizations can elaborate as desired, adding multiple internal and external sources of information, support for non-conventional data types, collaboration and knowledge sharing capabilities, and more. But at the least, once the organization has its ERP system up and running, it is ready to start leveraging its knowledge.

ERP vendors move in on knowledge management

Baan Business Intelligence Suite (BaanBIS) provides online analytical processing (OLAP), tools to navigate complex data warehouses, data extraction/transfer/loading (ETL), and reporting.

J.D. Edwards
ActivEra Knowledge Management strategy ties together business intelligence functionality, balanced scorecards, EIS, analytics, and a data warehouse.

Offers a broad set of business intelligence (BI) tools. These include traditional BI tools such as Oracle Reports, Oracle Discoverer, and Oracle Express; Oracle Business Intelligence System (BIS), a suite of BI tools for Oracle Applications; and Oracle Strategic Enterprise Management (SEM) Suite, including Activity Based Costing/Activity Based Management (ABC/ABM), Balanced Scorecard, and Value Based Management (VBM) modules.

Enterprise Performance Management (EPM) provides activity based costing/activity based management (ABC/ABM) accounting and other analytics to create balanced scorecards and track other key performance indicators for decision support, EIS, and knowledge management efforts.

Knowledge Warehouse (Info DB version 4.0) brings together content and tools for authoring, modifying, translating, distributing, and managing knowledge content.

Source: Vendors

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