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Knowledge Management > Articles > KM industry reaches maturity; Metrics, organization, culture, po >

KM industry reaches maturity; Metrics, organization, culture, portal tools identified as success factors

by Madanmohan Rao

San Francisco; February 2002

How mature are KM practices and the KM industry today? What is the relationship between KM and e-learning? What new measurement approaches are being devised to assess KM initiatives? What new challenges are emerging for KM architectures today?

One indication of KM maturity is the growing evidence of proven KM benefits in global corporations; another is the continued interest in KM publications, conferences and industry consortia which have outlasted the hype cycle peaks and troughs of the last decade. KM practitioners from the Americas, Asia and Europe gathered recently in San Francisco for two notable events, Delphi's Enterprise Portals seminar and the Institute for International Research's Braintrust International 2002 summit.

KM is defined as a systematic set of approaches to enable information and knowledge to grow, flow and create value; this involves people, information, workflows, best practices, and communities of practice.

Commitment to organizational KM is now emerging in a wide range of parameters: mission statements, strategies, top management support, budgets, human resources, incentives, architectures, measurement, benchmarks, communities, and organization.

Knowledge repositories, collaborative workspaces and cultural change initiatives are being leveraged to help companies create, identify, capture, transfer, improve, and reuse knowledge.

Formally stated KM objectives include management of risk, increase productivity, minimise reinventing the wheel, reduce cycle time, speed up learning, make better/faster decisions, enhance ability to scale up, energise innovation, and improve motivation.

Properly planned and executed KM practices can ease rather than add to employees' daily workload.

Organising for KM

Organising communities, processes, platforms and culture across the entire breadth and depth of a global corporation for KM practices can be quite a daunting task - but some success stories have already emerged on this front.

"Leadership, operating discipline, enabling technology, and a supportive environment are key for KM initiatives," said Greg Horvath, senior program manager at the Knowledge Management Resource Centre at Dow Chemical Company.

Founded in Michigan in 1897, Dow today has 50,000 employees and 171 manufacturing sites in 35 countries, supplying customers in 162 countries with materials for publishing, transportation, personal care, home care, electronics, medicine, food and water purification.

"KM is an integral part of our 21st century toolbox, underpinning key initiatives like Six Sigma, e-business, customer focus, M&A, and value-based management," said Horvath. Dow's KM investment is estimated at $41 million to date.

A formal KM Expertise Centre directed by the CIO consists of 10 people who form a central group with enterprise focus. 26 Information Stewards manage KM environments within business units, and oversee KM certification. There are also content technicians accountable for day-to-day content management activity which supports the KM process.

As for assessment of KM initiatives, Dow's four-tier metrics framework includes knowledge store optimisation (via metatags and filesharing), employee enablement (opinion surveys), KM capability metric (along dimensions like business sponsorship, KM roles, technology), and KM investment performance (hard RoI analysis).

Buckman Labs, another pioneer in KM, launched an online learning centre in 1996, new IT infrastructure for KM in 1998, a TeamToolz toolkit for team creation in 2000, processes like After Action Review in 2001, and new people products in 2002.

"Creative application of knowledge can lead to measurable cost-effective improvements in output and quality," said Melissie Rumizen, knowledge strategist at Buckman Laboratories and author of "The Complete Idiot's Guide to Knowledge Management."

Community Dynamics

Much of the success of organizational KM depends on community dynamics: identifying, nurturing and supporting multiple kinds of communities and encouraging non-traditional forms of community communication.

"Building communities in business has become a priority in knowledge-sharing organisations around the world. Storytelling has become an effective way to mobilise change," said Seth Kahan, president of the Performance Development Group and internal communications consultant to the World Bank.

"Personal storytelling builds community and can revitalise the way we do business. It brings us back to life and to our deeper purpose," said Kahan, who has used non-traditional business communication techniques like art, theatrical tools, poetry, and even a Cherokee talking stick to improve internal and interpersonal communication.

"How we share is as important as what we share," said Kahan.

"Springboard stories ignite action in organizations," said Stephen Denning, author of "The Springboard" and architect of the World Bank's KM initiative.

There are multiple roles in such communities of practice: expert, mentor, sponsor, cybrarian, leader, supporter, administrator, content coordinator, facilitator, journalist, events coordinator, and technologist, according to Michael Fontaine, research consultant at IBM's Institute for Knowledge Management.

Time, resources, and encouragement are requisites for successful communities, which typically involve a mixture of volunteer and staffed members.

Community development proceeds through multiple stages: initial realization of potential, coalescing, maturing, becoming active - and then dispersing if the community is not sustained. Communities and roles can evolve bottom-up (by evolution) or top-down (by assignment), according to Fontaine.

Knowledge centres can be created via top-down, strategic communities, and then be populated with knowledge bases which are augmented via bottom-up, spontaneous communities, said Vic Gulus of energy and infrastructure company Montgomery, Watson and Harza (MWH).

MWH's KM initiative, called Knet, has 90 knowledge communities set up since June 1, 2000, involving over 1,275 people in diverse areas like technology, administrative, marketing, and client services.

"The KM practice aims to export best practices around the world instantly, augment informal relationships with formal business processes, and implement rewards and recognition incentives.

"Our company leverages our fractal community structure, or a family of local communities enabled by a network of facilitators. Business process surveys, social network analysis, and repository changes are some ways in which we assess KM progress," Gulus said.

Such community dynamics play a key role during corporate mergers and acquisitions. "KM can support merger synergies and corporate fusion," said Jeff Stemke, KM consultant at recently merged oil giant ChevronTexaco.

"The merger provides a short window and a unique opportunity for merged company employees to work together and improve synergies, but a better line of sight is needed quickly between the companies to unleash merger synergy," he said. Knowledge portals and a PeopleNet expertise directory are used to connect projects, people, processes and communities at ChevronTexaco.

Directories, Portals, Tools

Information and communication technologies play a key role in facilitating KM in today's globalised company which operates in a complex web of partnerships and alliances.

"Knowledge is information in context, and a knowledge directory can leverage expert networks by personalising information and classifying it in context," according to Kris Kindem, Sharing Technology Manager at Thompson Legal & Regulatory.

"Effective tools can be used to build and test new taxonomies along dimensions of depth, breadth and detail. For administrators, the taxonomy should be easy to maintain, and users should find it easy to understand, navigate, and contribute," said Bryan Seyfarth, senior solution consultant at Sopheon Corporation, while also cautioning that no taxonomy is ever complete or perfect.

Organisational platforms for personalized access and interaction have evolved from chaotic Intranets to more cohesive enterprise portals, said Tom Koulopoulos, president of Delphi Corporation.

Enterprise portals can help turn information into knowledge by facilitating the organization, navigation, visualization and heuristic interaction of employees with one another and with information. "Business portals nurture a sense of community among users and provide access to knowledge and the experts who maintain that knowledge. They impact the supply side, demand side and organizational knowledge," he said.

"Older Intranet implementations will need re-design for just-in-time relevance because they have too much dead content," he observed. Dotcom distractions are less now, and companies can focus more on being "information refineries" by nurturing value chain communities, subject matter communities, and skill-based communities.

KM toolkits are now being offered by a number of second generation software companies such as Orbital Software, Sopheon, Stratify, BrainEKP (enterprise knowledge portal), BackWeb, Plumtree, Corechange, Epicentric, and Voquette.

Delphi classifies enterprise portal vendors into the following categories: content management (Documentum, Open Text), collaboration (Microsoft, Lotus), search (Inktomi, Autonomy, Verity), KM (Intraspect), and ERP (PeopleSoft). Each has varying offerings for content aging, archiving, authentication, peer ranking, collaboration, and security.

Metrics for KM

In the post-dotcom era and in a time of economic slowdown, measuring return on investment in initiatives like KM is becoming a pressing concern at large organizations.

"The KM measurement process must take into consideration the needs of all stakeholders," said Bruce Richard of HP Consulting.

HP's goal is to improve profitability through KM and leveraging intellectual property, by recognizing and promoting desired KM behaviours through performance evaluation, development, coaching, and mentoring.

KM measurement at HP takes place at multiple levels:  process, role, people, organisation, and customer satisfaction, through measures like frequency of contributing, sharing or reusing project material like profiles, snapshots, plans, and deliverables.

"A challenge for us is to make this measurement and rollout globally consistent," said Richard.

"We use a Knowledge Networking Environmental Assessment Tool (KNEAT) to assess our KM environment via surveys about leadership behaviour, individual behaviour, peer behaviour, organisational expectations, and IT tools," said Michael Burtha, executive director of the Worldwide Knowledge Networking Program at Johnson&Johnson, the world's largest manufacturer of healthcare products (which include Johnson's baby powder, Band-Aids, and Tylenol).

Johnson&Johnson's KM network now has close to 600 project summaries, 2,000 person profiles, 85 per cent response rate on its message boards, and 11 global communities of practices. "We connect to external KM experts and programs as well as relevant companies for learnings and benchmarking," said Burtha.

In-process and end-process impacts and measures are an important part of KM metrics, according to Sue Hanley, managing director at e-business solutions firm Plural. Measurement is needed for feedback, funding, follow-on and focus, and will ultimately help with organizational learning and industry benchmarks.

Measures can be quantitative (such as number of document uploads/downloads, frequency of online chat, number of users, number of collaborative projects) and qualitative (anecdotes, usefulness survey, user ratings of contribution value).

Industry Initiatives

Recognising the relevance of effective and efficient KM practices for companies operating in a fiercely competitive global economy, numerous national and industry-led initiatives are being launched around the world for sharing lessons on the KM front.

For instance, the American Productivity and Quality Centre (www.apqc.org) was founded in 1977, funded by 100 corporations to do business research and benchmarking. APQC has focused on KM since 1993, and regularly holds conferences and consultations on topics like content management, sustaining communities of practice, creating a knowledge sharing culture, and using IT for KM.

80 per cent of major US corporations have explicit KM initiatives. Over 220 organisations have joined APQC to benchmark best practices in KM since 1995. Over 60 best practices have been studied in detail, according to Cindy Hubert, director of Knowledge Management and Learning at APQC.

There are reportedly 120 communities of practice at the World Bank, 140 at Daimler Chrysler, 345 at Siemens, 100 and Chevron, and 14 at the NSA. In terms of RoI, Chevron has reduced annual operating costs by US$2 billion, and Cap Gemini Ernst&Young has experienced a 10-fold growth in revenue with a 5-fold increase in employees. 

Schlumberger reported a first year savings of $75 million through its KM initiative called InTouch, which improved operational efficiency by connecting technology centres and field workers. As a result, technical query resolution time fell by 95 per cent and engineering modifications update time was reduced by 75 per cent.

"Boundary-spanning communities of practice are THE new organisational overlay for knowledge creation and use," said Hubert.

KM Goes International

Formal KM activities are emerging not just in US-headquartered companies, but also in Canada, Latin America, Europe, and Asia.

Sue Hanley of Plural cited a survey conducted in 2001 which showed that 91% of Canadian leaders indicated that KM has succeeded in creating value in improving organisational effectiveness, and 89% agree that KM practices have succeeded in delivering customer value.

"From January 1999 to June 2000, our company's KM initiative saved a total of $180 million over areas like planning, technology, operations and business processes," said

Olimpia Salas, head of corporate knowledge management at Venezuelan oil giant PDVSA.

The KM platform, indicators and support services were launched in 1999; there are now 117 communities in 11 clusters. KM champions urge employees to take on KM as a self-development practice. Periodic seminars at PDVSA have been conducted on corporate knowledge centre validation, alignment and synchronization. Desirable KM cultural behaviours have been inculcated at the level of the worker (to share knowledge and develop themselves), leader (to tutor and reward employees), and organisation (to adopt international benchmarks, to promote a knowledge-related corporate identity)

"Latin American people are quite social to begin with, so formal communities for KM can be easily jumpstarted. PDVSA has adopted a liberal arts approach for KM, where emotional intelligence and spiritual values are also important," according to Steve Barth, KM consultant and writer.

The Road Ahead: Speed, eLearning, New platforms

One interesting emerging development on the KM front is the growing convergence of viewpoints between the KM community and the e-learning community.

"There has been a disconnect between KM and e-learning because of different organizational lineage and varying vendor products. There is also a perception that learning is for new employees whereas KM is for experts," observed Edward Barnfield and Jennifer Wilson of Melcrum Research.

But actually the concept of KM can be united with the goals of e-learning to create the larger ideal of a learning organization - via blended learning, skills directories integrated with course delivery, and the interleaving of working and learning.

"E-learning should be blended with communities of practice. Managers need to be able to anticipate training needs based on business goals and deliver those courses quickly to employees," according to Barnfield and Wilson.

"KM and e-learning are converging - managers and employees need to focus on doing while learning and learning while doing. Connected learning is the way to go," said APQC's Cindy Hubert.

Technology and culture will remain key focus areas, according to Hubert. "Good technology really does matter. Every important business process is IT-enabled. KM and learning are enabled by it. At the same time, culture should not be neglected -- people don't hoard knowledge, but reserve it for high payoff activities, and so encouraging a culture of knowledge sharing will become more important," said Hubert.

"We should also not overlook other knowledge components like judgement, persuasiveness, wit and innovation," said Ted Graham, worldwide director of KM services at Hill and Knowlton. The company's global KM mandate is to leverage strategic thinking into high-margin repeatable activities, via "Bestsellers" (successful re-use of information) and PeoplePages. The company even has Webcams installed in some of its worldwide offices which helps people feel part of a connected whole.

"KM initiatives should also focus on the speed factor. Companies have to learn how to learn faster. It's not what you know that counts any more. It's what you know in time," said Erick Thompson, assistant vice president for knowledge exchange at the St. Paul Companies.

"It doesn't matter what you know, but what you do with it. To outwit, outplay and outlast your competition - that is the strategic purpose and value of KM," said Thompson. Accordingly, the employment contract will need to be changed if organizational expertise and experience are to be institutionalized. KM, however, is more than information and speed -- it is also about tapping into imaginations and touching the heart of people, according to Thompson.

"The company of tomorrow needs to create the wave of change, not just ride it," said

Donna Stemmer, Chief Knowledge Officer at EDS.

KM is about creating an environment for success, based on efficiency and effectiveness, productivity and innovation. KM initiatives should focus along the entire spectrums of community structure and focus: organisational team, project team; community of interest, community of practice.

Trends to look for on the KM architecture front include emerging standards for Web services (WSDL), authoring (WebDAV), objects (SOAP, CORBA), commerce (Rosetta Net), process coalitions (BPMI), XML dialects (ebXML, aecXML), and ERP integration.

One of the most notable trends this year will be the increasing use of mobile technologies to take "KM" to another dimension - "knowledge mobilization" - by bringing relevant knowledge directly to the fingertips of a company's roadwarriors and fieldworkers via cellphones and PDAs - but that's another story altogether.

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The writer can be reached at madan@techsparks.com

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