|In this article:
|What is knowledge management?
|Get in the know
|Do you know how much you know?
Here’s the pitch: Gain corporate intuition, an organizational response to new situations, that lets your company meet and defeat a competitive challenge. The miracle of knowledge management electronically harnesses the know-how and experience of every employee.
Sound too good to be true? That’s because it has been, at least until now. Knowledge management (KM) has become very useful lately, especially to organizations that sell knowledge and services, rather than products.
Illustration by Daniel Guidera
Consider AnswerThink Consulting Group of Miami. Founder Allan R. Frank says he bet the company on KM when he broke away from KPMG Peat Marwick to form his consultancy in April 1997. “Our entire knowledge repository is organized into a hierarchy like you find on Yahoo!” he says. “We’re one large brain” (see http://www.yahoo.comfor the prototypical example of such a hierarchy).
“Our entire knowledge repository is organized into a hierarchy like you find on Yahoo!… We’re one large brain,” says Allan Frank, AnswerThink Consulting Group.
Using the Dataware II Knowledge Management Suite from Dataware Technologies, AnswerThink created a hierarchy–also known in KM jargon as a taxonomy–of its partners’ knowledge. This huge outline includes topics, subtopics, and sub-sub-topics. AnswerThink also identified who knew the most about which topics by scanning e-mails and by identifying who had read or written most prolifically on those topics. The taxonomy and links to the items it indexes (such as e-mail messages, white papers, presentations, checklists, and memos) is accessible over the firm’s extranet.
When AnswerThink acquired a consultancy that made heavy use of the groupware package Lotus Notes, Dataware’s software scanned the Notes databases and added their contents to its taxonomy while the Notes databases remained in place.
“In a world where bricks and mortar no longer count, this system lets us solve problems better and serve customers better, in very concrete ways,” Frank says. “We don’t have to get fancy to address key questions: How can I produce a better proposal, close a sale faster, tell one of my partners all about a client I’ve been working with?”
The nature of knowledge
Knowledge management is essentially assessing and recording who within an organization knows what (see the text box, “What is knowledge management?”).
According to Thomas Koulopoulos, president of the Delphi Group, a Boston-based management consulting firm, two KM phrases, “tacit knowledge” and “explicit knowledge,” go back to academic inquiries at the turn of the century exploring the nature of knowledge.
Indeed, some KM software products claim the ability to identify and record not only an executive’s explicit knowledge–often defined as what he knows he knows–but also his tacit knowledge, which is what he doesn’t know he knows. To identify the characteristics that best leverage an organization’s intellect, the Delphi Group has developed a corporate IQ test. Go ahead, take the test!
“Giving context and revealing who knows what are the two most important aspects of knowledge management,” says Geoffrey Bock, a senior consultant with the Patricia Seybold Group in Boston.
Bock says KM products can be divided into several categories.
One category is text search-and-retrieval engines,a well-established technology that is being expanded to encompass relational data, HTML pages, and other forms of information. This software usually includes filtering and notification features, which are designed to reduce information overload. It lets organizations create their own hierarchies of knowledge, Bock says. Included in this category are products from Excalibur Technologies, Fulcrum, Sovereign Hill, and Verity.
A second type of KM software undertakes the task of organizing knowledge into hierarchies,like those at the Yahoo! site, through which users can browse. Companies in this group include Perspecta, Plumtree Software, and Wise Wire.
A third type of KM software is groupware,such as Lotus Notes.
Finally, some software is designed to interview workers to determine what they do, and how, why, and with what information they do it.It then captures that expertise and makes it available organization-wide. An example is Hyperknowledge.
Delphi’s Koulopoulos likens the use of KM software to standing around the water cooler or the coffee machine, informally sharing knowledge. “That sort of serendipity has always played a creative role,” he says. “KM is really engineered serendipity.”
Building a knowledge base
In the realm of structured data, like that found in databases, datamining has emerged to detect previously unsuspected patterns and connections. KM does the same thing for unstructured, textual data, Koulopoulos says.
Because KM software is designed to find patterns, companies have used it to improve the performance of help desks. Cerner, a Kansas City creator of clinical information systems, uses Casepoint Professional from Inference for both its internal and external help desks. Staffers field 3,000 calls a month, 24 hours a day, seven days a week, from hospitals and laboratories using Cerner’s software in mission-critical capacities. Building a knowledge base of the most common user problems has cut training time in half for Cerner’s front-line support staffers, says Rhonda Dalzell, knowledge-base manager.
The backlog of support calls declined by 5% each month for a period after the knowledge base came online in June 1997. “Because of new procedures, including the knowledge-management system, we were able to double the number of issues that could be resolved in a single day,” Dalzell says.
The quarter after that, clients reported their highest level of support satisfaction in the 10 years it’s been measured, Dalzell says.
“We’re still evaluating the financial costs and benefits of the knowledge-management system and the new help-desk procedures, but there were so many changes at once that it’s difficult to pinpoint the ROI,” says Dalzell. “We do know that our client satisfaction spiked dramatically after the change.”
At Broderbund Software of Novato, Calif., internal and Web-based Inference and similar products create casebases from unstructured data, much as database management systems create databases from structured data. These casebases house 7,000 reported problems and solutions for 700 products, says Jim Wilmott, Broderbund’s product-support manager. Half of all users’ problems are resolved by using the company’s Web-based question-and-answer casebase, and nearly three-quarters of the users prefer on-line help to a free phone call, Wilmott says.
“We run several thousand successful [Web] searches each month,” he says. “Each phone call costs us an average of $10, and each search is a phone call that wasn’t made.”
Pooling disparate information
Pulling together knowledge from disparate sources has already helped reduce crime in Coppell, Texas, a town of 28,000 near the Dallas-Fort Worth airport, says an official there. Capt. Wade Goolsby says beta software from GTE called Bastille has resolved three forgeries by linking them to a suspect recently arrested for a separate forgery. “When we don’t have to rely on the memory of an investigator, we don’t miss details that lead to arrests,” he says.
Coppell’s system links to police departments of six nearby cities and the local sheriff’s office. Plans call for the creation of chat rooms and inter-departmental briefings.
Bastille is built around RetrievalWare, a search-engine technology from Excalibur Technologies. “Using RetrievalWare lets Bastille users search conceptually and with synonyms, which they couldn’t do using SQL,” says Brian Plotkin, operations manager for GTE Law Enforcement Services, a Tampa, Fla.-based division of GTE. It also lets users search through images using keywords, he says. The system stores records on arrests, perpetrators, and types of offense. Any field in any such record can be searched and compared.
You heard right:
Put all your eggs in one basket
KM can be as simple as pooling disparate information in one place. Software producer Platinum Technologyhas acquired 35 companies over the past three years, increasing its payroll to 5,000 from 1,000. To integrate all those companies’ data, it created Jaguar, a huge Web-based pool of knowledge holding the contents of 82 Lotus Notes databases, 13 intranet sites, and 1,028 subdirectories on a common drive, says Glenn Shimkus, director of worldwide sales enablement. On an average day, 40% of the company’s employees access Jaguar through its Notes front end, he says.
“We call this knowledge management because it’s more than documents,” says Shimkus. “We have links to competitors’ sites out on the Web, to help salespeople compare our offerings with the competition’s. We have corporate travel policies, chat rooms for salespeople–most of the information central to running our business.”
Jaguar cost about $750,000 to implement, including consulting, software, and staffing, Shimkus says. By conservative estimate, it resulted in $6 million in productivity and sales gains its first year, and the gains began accruing in less than three months after start-up, Shimkus says.
Serendipity on the rise
Nearly 80 companies now sell software containing the word “knowledge” in the title, says Delphi’s Koulopoulos. Last year, only 40 did so. (For impartial guidance, users might want to purchase a study by Doculabs or research from the Delphi Group. Doculabs’ study, compares seven vendors’ KM products and the Delphi Group’s research covers 50 knowledge management products. Delphi’s software solutions study also profiles 25 knowledge management products.)
Estimates on the size of the KM market vary widely. CAP Ventures, a consulting firm based in Norwell, Mass., says KM is in place in at least 200 of the Fortune 1,000 companies. KMWorlda publishing and exposition company based in Camden, Maine, predicts the market will be worth $5 billion by 2000.
Koulopoulos also predicts that in the near future, KM will become nearly invisible as companies take it for granted. It will be integrated with datamining so that both relational and textual data can be categorized and searched. (For a related story in this issue, see: Link. Electronic calendars, project management, groupware, and e-mail–now four distinct applications at most companies–will be merged and shared throughout an organization.
A simple innovation already in place at oil giant Schlumberger will become widespread: Every e-mail can be submitted to a knowledge base for indexing. It’s a painless way, Koulopoulos says, to build a knowledge base.
“If we can increase the occurrence of serendipity by even 10%, the payback will be enormous,” Koulopoulos says. //
Dan Richman is a Seattle-based freelance writer specializing in high technology.
|Take a corporate IQ test
|How smart is your company? Like an intelligent person, an intelligent company understands itself and its environment.
|By Thomas M. Koulopoulos
What do Microsoft, Sun Microsystems, and Gillette have in common? They are publicly held companies with huge market capitalizations based on high stock-market multiples. These companies enjoy lofty valuations from Wall Street because of their profitability, which is based on innovation. And their innovation is not just a matter of luck, but the result of their ability to leverage their corporate intelligence.
Your company doesn’t need to have a Bill Gates or a Scott McNealy as CEO to be smart. The intellectual value of an organization isn’t the sum of its managers’ IQs. Instead, the intellectual value is based on how the collective knowledge of the organization’s individuals is distributed and applied to the challenges it faces.
Organizations seeking to measure how well they are leveraging and applying their “knowledge” can take a corporate IQ test. By answering a series of questions and calculating scores based on a proprietary weighting system, a manager can determine the intelligence of his or her organization.
Companies that demonstrate high intelligence and success in their ability to innovate are usually incredibly responsive. Look at Microsoft, which turned on a dime to refocus its applications and operating-systems software development on the Internet, or Sun, which reworked a cross-platform desktop operating system into Java, the widely hailed universal platform for the Internet.
A corporate IQ test administered by The Delphi Group looks at about 100 attributes, from how teams are structured, to the specific technologies used to assist the exchange of information and ideas, to the percentage of profits attributable to recent products. Several hundred individuals within an organization take the quiz. Their answers are compiled and analyzed to determine a corporate IQ.
Last year, The Delphi Group conducted a corporate IQ survey of large U.S. companies via the Web. The results from the 350 responding companies can be found at http://www.delphigroup.com/km/ci_responses.html.
The questions on the survey, as in the corporate IQ tests The Delphi Group administers for client companies, focus on four areas of organizational behavior and function:
1. Internal awareness
Internal awareness is most basic. Corporate intelligence is primarily about an organization’s ability to understand itself. Internal awareness is not only having your house in order, but knowing what order your house is in. In simplest terms, internal awareness is the ability to answer the question: What do you do? In other words, what are your core competencies? Sun knew its competencies were in universal platforms long before Java and the Web. If you know your competency, you can quickly map it to the market.
A company that is internally aware has access to disparate pools of knowledge within the organization, even if they might not be considered relevant in the current market context.
Can you answer “yes” to the following corporate IQ questions?