Practical Applications of Knowledge

Management
Reference Models for Key Issues.
Mag. Andrea Polterauer
Profactor Produktionsforschungs GesmbH, Austria.

David Mayrhofer
Profactor Produktionsforschungs GesmbH, Austria.

This paper describes the results of the ongoing ESPRIT project MaKe-IT SME which enables small and
medium-sized enterprises to establish a pro-active knowledge management process for the first time.
One of the main objectives of this project is to develop an IT-software for knowledge management based
on a reference model. After realising that establishing one reference model which should have universal
correctness seemed to be impossible, four reference models for SMEs key issues have been
developed. In co-operation with MaKe-IT SMEs project partners and members of the Industrial
Supporter Group, key issues were defined as customer relationship management, improvement and
problem handling, expertise management and supplier relationship management. In order to be a basis
for implementation, the reference models are modelled in UML (Unified Modelling Language) as well as
their attributes, relationships and classification attributes are described.

Overview
Motivation
Two fundamental and coherent lines of development prevail the economic and social changes
of this ending millennium. That is firstly the increase of a world-wide integration and
interdependency of markets, societies and cultures and secondly the obvious trend to an
information- and knowledge society. Companies have to stand their grounds in rapidly
expanding, more and more dynamic and intransparent markets. They are not only in a worldwide competition for customers, but also in a stiffening world-wide competition for limited
resources. Flexibility, information and innovation are decisive parameters in this competition.
Within such an environment, knowledge and creativity are to become the virtual origin of
success. Therefore it is not astonishing that in managerial theory and practice Knowledge
Management appears to be one of the dominating topical subject these days (Anderson, 1996),
(Bullinger, Wrner, Prieto, 1997).
More and more companies realise that the knowledge of their employees, but also of their
customers and suppliers is of crucial importance and one of their most valuable assets (Probst
et. al. 1998).
Therefore the objective of MaKe-IT SME1 project is to develop holistic methods and tools
for securing, sharing and further development of engineering and manufacturing knowledge.
Embedded in this project and derived from the requirements of the project partners and the
members of the Industrial Supporter Group reference models for best representation of
knowledge have to be developed.
This paper deals with development of four reference models2 showing possible and general
ways of securing and sharing knowledge for customer relationship management, improvement
and problem handling as well as for supplier relationship management and expertise
management.

Project MaKe-IT SME Overview

As mentioned above, the objective of this project is the development of holistic methods and
tools for the securing, sharing and further development of engineering and manufacturing
knowledge. This project will provide methods and an IT solution suitable to flexibly manage
the knowledge in-house as well as with co-operating partners. As the project is targeted
particularly at SMEs, a pragmatic approach was chosen.
The development and deployment of IT systems are thoroughly guided by means for human
resource management and knowledge engineering scenarios. The MaKe-IT SME project
connects technical and human-oriented aspects and additionally includes central aspects of
organisational management. Relevant company parameters were analysed and a benchmark
was conducted in order to identify best practices. The MaKe-IT SME software solution
(prototyp) is targeted at corporate intranets. It will be integrated with the methods and means
for knowledge management and human resource management that are being developed during
1 Management of Knowledge Using Integrated Tools for Small- and Mediumsized Enterprises is Esprit Project No. 25734.
2 Reference Model is seen as a data model, including description of attributes, relationships and classification.

the project. They will enable the capturing, formalisation and distribution of expert knowledge
to overcome the bottleneck of the overall process of knowledge management.

Main issues
This paper deals with three different main issues of the 6th European Conference on Computer
Supported Cooperative Work, which are Key questions for successful knowledge sharing.,
How can knowledge be best represented for inter-individual and organisation-wide sharing?
and Can CSCW systems be used to enable expertise management? How?. It will be
described how the developed reference models and knowledge tools in general can support
knowledge sharing, how knowledge can be best represented using the reference tools and how
expertise management is related to the reference models.
Key questions for successful knowledge sharing
According to Fahey and Prusak (1998) IT is a wonderful facilitator of data and information
transmission and distribution, but it can never substitute for the rich interactivity,
communication and learning that is inherent in dialogue. Knowledge is primary a function and
consequence of the meeting and interaction of minds. So it is clear, that in a company without a
company culture which supports and rewards knowledge sharing, the tools will be useless. But
if used appropriately, tools can have a powerful impact through automation and augmentation
of knowledge work. (Ruggles, 1997).
The same can be said for the reference models described later in this paper.
How can knowledge be best represented for inter-individual and organisation-wide sharing
One of the main purposes of a knowledge management tool is to represent knowledge. The
representation of knowledge in tools has always to be based on a data model, which will be
described in this paper in form of four reference models.
So the main purpose of developing these reference models was to reach best representation
of knowledge for storing, sharing and using knowledge.
Can CSCW systems be used to enable expertise management? How?
The third main issue which can be related to the reference models is the question, how CSCW
systems can be used to enable expertise management and how. One answer can be partly given
by one of the four reference models. Expertise management tries to connect experts and
establish networks to manage access to, and sharing of expertise knowledge.
So this reference model will show what kind of data model has to be basis for a knowledge
management tool managing expertise knowledge.

Key Questions for Knowledge Sharing The Technical

Perspective
Especially for SMEs, customisability and adaptability are key requirements. The solutions to a
specific knowledge management problem can be found in the user company itself and not in a
shrink-wrapped software product. Therefore, the software has to be a system where reference
models can as well be implemented as adapted for enterprise-specific knowledge management
problems. So, a framework architecture is required. (MaKe-IT SME Consortium, 1999b)

Expertise Management

Improvement & Problem Handling

Customer Relationship
Management (CRM)

...

Supplier Relationship
Management (SRM)

SME Consulting

SME Manufacturing

MaKe-IT SME Reference Solutions

for Knowledge Management

MaKe-IT
MaKe-ITSME
SME
Knowledge
Management
Knowledge ManagementFramework
Framework
Figure 1 Framework Architecture

The core of the software prototype consists of a configuration component for the definition of
enterprise-specific knowledge storage models and user interface configuration; generic
application templates that provide standard functionality for externalisation, referencing,
storage, transfer, retrieval and display of information objects; and a server-based object request
service that facilitates the access of information objects and navigation through the network of
related information based on the knowledge storage model (MaKe-IT SME Consortium,
1999a). Application development and customisation entail only the development of forms for
information objects and the registration within the model.
Apart from forms design there is no need for additional software development as all other
functionality is provided by the generic kernel components and further application components,
such as collaboration support, knowledge mapping, folders, staff directory and definition of
organisational structures. Instance objects form these components are represented by
information object types in the knowledge storage model and therefore are an integral part of
the knowledge management application.

Lotus Domino Server 5.0

(Windows NT 4.0, Sun Solaris 2.5.1)
Database Server

Domino Web-Server

Application modules

...

Further
extensions

Improvement
suggestions

Competitor
information

Customer
information

Workspace

(Folders, Tasks)

(Lotus Domino Application Template)

Fulltext-Search, etc.

Object Request
Service
(Java Servlet,
JDK 1.1.6)

External
IT-System
(ERP, etc.)

Configuration/
Administration
Component

External System
Integration
Component

Database registry
information type
definition

Adapter
Replication
Service

Web-Frontend (End User Interface)

(HTML, Forms, Frames, Javascript)

Administration Frontend
(Lotus Notes)

Web-Browser
(Netscape Navigator 4.x)

Lotus Notes Client 4.6

(Windows, UNIX, Apple)

Figure 2 Software Prototype Architecture

As for the meta-model, the architecture of the MaKe-IT SME knowledge management software
has to be suitable for implementation of different kinds of enterprise specific knowledge
management applications. Therefore, a framework architecture was chosen. A configuration
and administration module can be used to implement applications based on enterprise-specific
knowledge engineering storage models. Applications consist of components and can be
extended and modified. Existing reference solutions can be customised to specific needs.
(Prenninger, et. al., 1999)
To show an overview of the functionality that the software provides, the phases of the
knowledge spiral (Nonaka, 1995) were used. Besides providing powerful tools for structuring a
company's knowledge base, the software offers means to assist the user in making tacit
knowledge explicit, finding and re-using existing tacit knowledge and also to enable the
transfer of tacit knowledge through access to the relevant people involved and the facilitation
of direct communication.

Tacit
knowledge

From

Explicit
knowledge

Socialisation
Direct communication of information to
people and/or teams (simple ad hoc
workflow)
Personal working area for assigned tasks and
personal information store
Off-line discussion threads for any
information object
Representation of organisational structures
and staff directory
Support for temporary teams, team workspace
Internalisation
Hypertext generation for navigation to
context and relationship information and
people involved
Retrieval of existing knowledge via
knowledge maps or classification
Full-text search and focused search that uses
knowledge structure
Structured display of information using
contexts, relationships and metadata
Tacit knowledge

Figure 3 Summary of Software Functionality

To

Externalisation
Organisation: Definition of information
object types (knowledge storage model,
forms creation and registration)
Organisation: Definition of context and
relationships for information object types
User: Entry of new information into the
system during user's daily work
User: classification of knowledge
(Knowledge Map)
Combination
Assignment of predefined contexts and
relationships to any information object
Simple association of further related
information elements
Re-use and referencing of existing tacit
knowledge in new contexts

Explicit knowledge

Reference Models for best Representation of Knowledge

Inter-individual and Organisation-wide Sharing
The aim of this chapter is the development of four different reference models, which meet the
practical requirements of the industrial partners3 of the Make-IT SME project as well as have
universal validity.
The first reference models deal with Customer Relationship Management, followed by
Improvement and Problem-Handling, Expertise Management and Supplier Relationship
Management which are the most important issues of the industrial partners of Make-IT SME
project.

Customer Relationship Management

Increasingly customer knowledge is getting important to companies, but "Its one thing to train
a sales staff to be warm and attentive; its quite another to identify, track and interact with an
individual customer and then reconfigure your product or service to meet that customers
needs." (Pepper et al., 1999)
Therefore it is important not only to know hard facts like names, addresses, a.s.o., but also
to know soft facts about customers like their habits, preferences or suggestions.
Three types of customer knowledge can be specified: (Davenport, 1998)
The first type is called data-derived customer knowledge which is related to the
involvement of customers.
The second type is human customer knowledge which typically arises from interaction
among people in the form of observations, comments, lessons learned, conclusions and
qualitative facts which have to be captured.
Last there is unstructured customer knowledge which cannot be described in a clearly way
and arises in the form of body language or facial expressions.
Considering the existence of the types of customer knowledge above will help to increase
customer satisfaction, save money and yield products which are needed by customers.
Customer Relationship Management can basically be used by any kind of companies.
Especially those, who have close corporations with their customers are depending on detailed
customer knowledge.
According to Nonaka and Takeuchi (1995) we have decided to take their spiral of
knowledge creation as a starting point for the development of a general Customer Relationship
Management model. Its task is to support an exchange of opinions, thoughts and images, which
present a new outlook for revolutionary ideas. On the one hand the reference model should
help to make customers knowledge explicit, on the other hand it should assist collecting,
saving, developing, distributing, handling and implicating knowledge in a most structured way.
Figure 4 shows the scope of the reference model for Customer Relationship Management. For
purposes of specification and documentation we decided to apply the widely accepted, objectoriented Unified Modelling Language (UML).

3 Industrial Partners of Make-IT SME consortium are: Anger GmbH, Austria; Iberica AG Spain; Santa & Cole Spain; Pfister
Systemtechnik, Germany.

Product

0..n
1..n

1..n

Competitor

produce

1..n
1..n

describe

supply
0..n

1..n
buy

Supplier

Problem report
1..n
1..n
Customer /
Intermediary

refer to

0..n

1..n

1..1

1..n

work on

0..n

1..1
employ

attend
1..n

deliver

1..n

Contact person

1..1

Employee

Figure 4 Object Model for Customer Relationship Management.

The Customer IOT (information object type) is the central unit for Customer Relationship
Management and has to consist at least of attributes like name, address, firm data as well as of
financial conditions, company description, customer behaviour and information about the last
and next visit.
Contact Persons are also essential for Customer Relationship Management because only
few people manage customer-supplier relationships and details about these are of enormous
importance. Insignificant things like behaviours, preferences, peculiarities and further more are
decisive for the quality of interaction between two partners.
Employees technical specific abilities or experiences help to contact competent employees
to meet customer expectations.
Information about products is needed for users to be able to deal with customers inquiries
or problems.
Competitor and supplier are two more IOTs to support Customer Relationship
Management in order to collect important data about products, relationships to other customers
or any other qualitative data.

Improvement and Problem Handling

Companies are often confronted with similar problems and so it would be efficient to use past
experience for future projects (Probst et. al. 1998). These experiences often called lessons
learned should be documented and evaluated. Because of several reasons particularly
cultural ones (deLong 1997) identifying and transferring internal best practices is tough, but
the potential gains are enormous (ODell, Grayson 1997).
In addition to internal lessons learned also external best practices can help to improve
problem handling to reach knowledge objectives, detect knowledge gaps and develop
competencies.

Transfer of knowledge, experiences and practices is one of the most important concepts of
knowledge management in practice, which enables reduction of costs and time to market and
improvement of customer use if knowledge and best practices are transferred and used
efficiently (Heisig 1998).
A firms success not only depends on knowledge at a given point of time. According to
Fahey and Prusak (1998) also the future is important and focusing on the past and the present
and not on the future is one of the eleven deadliest sins of knowledge management.
To handle this complex topic it is necessary to develop a reference model on improvement
and problem handling, dealing with internal and external problems and solutions as well as
with related information about employees, products and stakeholder which are shown by
Figure 5.
Organisational Unit and Employee represent the organisational structure. In addition to
common attributes an employees IOT should contain information about fields of experience,
profession, additional qualifications, responsibilities or positions.
A problem report is used to formulate problems whose primary purpose is to be solved or
supported by any authorised user of the company. Besides it should help to support solving
future problems. In order to reach these goals, there should be a description of the problem,
deadline, comment, influence as well as priority and status.
As mentioned above, the reuse of lessons learned and best practices is the key to
improvement and problem handling. The main purpose of this information type is that
expertise is elicited by practitioners, formed into rules and guidelines and then made available
to others (Ruggles, 1998). This expertise not only consists of best practices but also of
knowledge how to avoid errors (Probst, 1998).
In order to manage these requirements, there should be a description of the practice, date of
creation and use, frequency of use and satisfaction and possibilities for feedback. In addition
the practices should be classified by quality (from good idea to best industry practice)
(Ruggles, 1997), usefulness and complexity, and there should be the possibility to control
visibility4.
Customers, Suppliers and other contacts can either be source for a problem report or
contacted resource for any practice. In a sense of improvement and problem handling only
basic attributes are needed.

4 Not everything should be visible to everyone. According to (Probst et. al. 1998) uncontrolled knowledge sharing would
destroy all benefits of knowledge sharing. Depending on employees knowledge, position or interest distribution of
knowledge should be controlled.

Products and processes, used as proof of practices or problems are also described with
common attributes.

organizational unit

0..n
0..1

1..1

has a

1..1

is member of

manage

0..n

0..n

employee
edit

1..1
1..1
0..n
post

approves

0..n

0..n
0..n

problem report

0..n
0..n

practice

has a

0..n
0..n

replaces

proof
0..n

used/referenced

0..n

used/referenced

0..n

1..1

contacted
affect
initiate

product & service

process
0..n
0..n

stakeholder

source
0..1
0..n

customer

supplier

contact

is a
affect

Figure 5 Reference Model on Improvement and Problem Handling

Expertise Management
According to Ruggles (1998) there is a great amount of corporate knowledge remaining
uncodified. But it would be useful to find expertise still embedded securely in the mind of the
expert. Although information technology is a wonderful facilitator of data and information
transmission and distribution, it can never substitute for the rich interactivity, communication
and learning that is inherent in dialogue (Fahey and Prusak, 1998).
According to Nonaka and Takeuchi (1995) knowledge has to be built on its own, frequently

requiring intensive and laborious interaction among members of the organisation.

Therefore knowledge maps in form of graphical directories of knowledge owners, stock,
sources, structures and applications are extremely helpful to connect people (Eppler, 1997).
According to Ruggles (1998) Mapping sources of internal expertise and creating networks
of knowledge workers are the two most important should do of knowledge management.
The institute for Research and Learning says it is the informal, socially constructed
community of practice that form within organisations that are the true mechanisms though
which people learn and though which work gets done (Wenger, 1998).
In order to avoid unknown experts, who would lead to unused knowledge (Probst, 1998) the
aim of this reference model is to create transparency for identification of experts and usage of
their knowledge as well as to establish a basis for interaction and discussion to cultivate
electronic communities. According to Turner (1997), these electronic communities as a means
of stimulating the creation and capture of knowledge and innovation will help organisations to
see their performance outpace those that continue to rely on traditional information storage and
archiving systems.
To reach this goal, information object types of Employee, Practice, Organisational Unit,
Qualification, Area of Interest and Discussion Thread are needed. These IOTs and there
relationships between them are displayed in Figure 6.
The IOT of employee is one of the main objects for expertise management. According to
Fahey and Prusak (1998) knowledge is what the knower knows, which means that " there is
no knowledge without someone knowing it and therefore knowledge must be viewed as
originating "between the ears of individuals". To be able to access this knowledge, knowledge
maps in form of orderd by priority lists of experts including their qualification, abilities,
project experience and contact information can be as useful as yellow pages which can be
seen as knowledge profiles of who knows what. These "yellow pages" can be arranged
according to expertise, questions and issues and serve as a pointer to the know-how associated
with the know-what of the process-steps (Probst, 1998).
Therefore, in addition to basic name and address information, there should be personal
details like responsibilities, fields of experiences, profession, additional qualifications or
publications. An expert profile of each employee can be generated by relationships to area of
interest in conjunction to qualification. So any employee will be qualified for each topic.

has a
1..1

0..n

organizational unit
1..1

1..1

enter

1..1

qualification

manage

is member of

0..n

0..n

employee
1..1 enters

0..n
1..1
provide
has a

0..n

0..n

0..n

0..n

area of interest

0..n

0..n
0..n

1..1

practice

belong to

0..n

discussion thread 0..1

0..n

follow

0..n

has a

Figure 6 Data Model for Expertise management

The IOT of practice in means of expertise management has only to have a title and
description. It has to be classified by the kind of practice. More important than attributes are
the relationships to the employee and area of interest.
For the organisational unit also basic attributes will be enough but it should also be possible
to qualify these units with area of interest and qualification.
Qualification is needed for ranking people creating a template which ranks people as
trainee, novice, intermediate and expert depending on their skill, time on job and knowledge
employed.
Area of interest is also used for classifying and can be used for discussion threads, practices,
employees and organisational units.
The IOT of Discussion Thread is used for online discussion. Each firm has its own
approach, content and policies, but all rely on the ability to not only represent ideas, but also
discuss them (Ruggles, 1998). Discussion Threads can be entered by employees and
organisational units, when they are kind of formal information or announcements.

Supplier Relationship Management

At present you can notice a tendency to alliances and co-operations in all economic sectors and
in all steps of the value added chain. New strategies concerning procurement and delivery

make it necessary to think about supplier relationship management. To build up a trustful

relationship you need more information about your partner (Zink, 1998).
Also in terms of quality improvement, suppliers have to be taken into consideration. The
strategic management concept of Total Quality Management (TQM) for example has the aim
of continuous improvement of the quality of products, processes and services. To realise this
goal all parts of the company are responsible for this quality improvement. This efforts are the
basis for customer satisfaction and every company is dependent on their customer. All
activities of the company are consequently customer oriented. To reach the goal of customer
satisfaction it is also necessary to involve the supplier in early state of the production process.
A good and trustful customer-supplier relationship is useful for a continuous improvement of
quality (Verband der Automobilindustrie e.V., 1996).
Supplier selection depends on different procurement resp. purchase situations. In principle
three situations (New Task, Straight Rebuy, Modified Rebuy) can be distinguished (Arnold,
1982).
According to these different situations the development of a general reference model is
demanded to gain more information about your supplier in order to evaluate and support
optimisation of procurement of products and services to find the appropriate supplier for a
special situation. According to Hartmann, Pahl and Spohrer (1997) the aim of supplier
relationship management are: Objectify and optimise the selection of the supplier to guarantee
the supply, development and care of the supplier relationship as well as creation of problem.
In order to reach these goals and to establish a reference model for supplier relationship
management IOTs of Supplier, Product, Contact Person and Employee are needed. These
IOTs and the relationship between them are shown in Figure 7.
The central unit in our reference model for supplier relationship management is the IOT of
supplier. Attributes are needed for common address information, history of relationship, last
and next visits and comments. The main aim of this reference model is to evaluate the existing
supplier mainly on qualitative data, but the hard facts cannot be ignored. Therefore a balanced
matrix for supplier relationship management has been developed. This matrix for supplier
relationship management consists of main and sub standards and the ranking of main standards
arises from the ranking of their sub standards. Main standards are costs and conditions,
company, flexibility, know-how, quality, service, logistics and communication. The ranking of
these standards can be good, medium or bad (Hartmann, Pahl, Spohrer, 1997), (Harrmann,
1990), (Harting, 1989), (Schwaner, 1996).
Product and Delivery are used to describe products and deliveries in means of title,
descritption, amount, unit and date.
Equal to Contact Persons for customers it is most important to know insignificant things
like behaviours, preferences, peculiarities and further more about contact

Product

Delivery

0..n
1..1

consist of

1..n
supply

0..1

1..n
deliver

Supplier

0..n

0..n

1..n
attend

1..1

compete with

1..1
employ

1..1
Employee

1..n
Contact Person

Figure 7 Data Model of Supplier relationship management

persons at a supplying company to improve quality of interaction between partners.

Employee is used for identification of the employee who is responsible for managing the
supplier relationship. It is useful to know name and address information as well as personal
details and the organisational unit, he belongs to.

Lessons Learned and Future Developments

The reference models are currently being implemented using LOTUS NOTES / DOMINO. The
focus on the next phase will be on the continued implementation of the knowledge
management process and adequate human resource management by the industrial partners and
the implementation and evaluation of the reference models using the second prototype. The
reference models will be tested with the industrial partners, revised and implemented again.
As these projects are ongoing, no final results can be reported yet. However, a first set of
lessons learned can be compiled:
On the one hand a concept for the control of access to valuable or confident information and
knowledge is essential for a knowledge management tool, on the other hand makes such a
control mechanism knowledge sharing impossible.
The four reference solutions Customer Relationship Management, Improvement and
Problem Handling, Expertise Management and Supplier Relationship Management are
key issues for successful knowledge management, especially for small- and medium sized
enterprises. This experience is based on requirements of our project partners and the
members of the Industrial Supporter Group.
It has been found out that some of the requirements described in the reference models are
idealistic and can hardly be implemented or realised, because of that the reference models
are the basis for further research.
Knowledge management is more than a tool and far more than a model. The software is

necessary to support the knowledge sharing but also important for knowledge management
are knowledge management-able company culture and an appropriate organisational
structure.
It is impossible to develop a reference solution for knowledge management which can be used
for every aspect in every company of any size. It came out, that even the developed
reference models will not meet all requirements and are not up to standard of every
company, but have to be adopted to every single case.
The integration of knowledge management software with existing IT systems, e.g. enterprise
resource planning (ERP) and product data management system (PDM) is a key success
factor.

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