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Self Study Report



ABV-Indian Institute of Information

Technology and Management,

Under the guidance of: Submitted by:

Dr. Manoj Patwardhan Abhishek Kumar- 2008 MBA-02













5.3 BUDGET 27































"A company that is not managing knowledge is not paying attention to business,"
observed Thomas Stewart, author of Intellectual Capital, in his keynote presentation at

KNOWLEDGE MANAGEMENT revolves around the concept that one of the

most valuable corporate assets is the experience and expertise floating around inside
employees' heads. In order to manage this intellectual capital, executives must devise a
way to capture and share that knowledge with co-workers. If done right, Knowledge
Management is supposed to create a more collaborative environment, cut down on
duplication of effort and encourage knowledge sharing—saving time and money in the

There is as such no formal definition for Knowledge Management.

The term Knowledge Management (KM) has come to encompass the gamut of
organizational processes, responsibilities and systems directed towards the assimilation,
dissemination, harvest and reuse of knowledge. It can be thought of as a tripod with its
three legs defined as follows.

1 Content: To be able to convert information into knowledge - knowledge that is

reliable, available in the right form tailor-made for diverse target groups, and
which is readily accessible. The knowledge could take diverse forms such as
technical contents, business intelligence, approach documents, artifacts,
methodologies, best practices, FAQs (frequently Asked Questions), checklists,

2 Culture: To be able to sustain a culture of knowledge sharing both as a process,

as well as a philosophy.
3 Technology: To be able to harness the power of technology to make knowledge
available on-demand.


management plan: long-term organizational viability through the consistent generation of
stakeholder value.

During the course of the project, it was found that though many companies talk
about knowledge as a key asset, but the number that have actually jumped into practicing
knowledge management is not more than a few hundred out of thousands of corporations
around the world, with consultancies and IT companies around the world leading the
way. Besides, because of the various beliefs and myths wrongly associated with KM, the
KM initiatives undertaken in an organisation with the right intentions sometimes fail

The project report seeks to identify the various issues that underline an effective
and efficient KM implementation such as the basic strategies that help in its successful
implementation, the technologies to be made use of, the measurement techniques etc.

The Knowledge Management initiatives undertaken and the strategies made use
of at INFOSYS, one of the world’s leading IT consulting and software services company
in the world, has been incorporated in the project report as a case study to serve as a
pointer to any organization that seeks to successfully implement KM initiatives.


In this report an attempt has been made to present the issues connected with the
successful implementation of Knowledge Management in an Organisation like the
strategies to be used, technology to be made use of, measurement techniques etc. The
reasons owing to which KM initiatives fail also find a mention.

The objective of the report is to outline the issues that organizations need to
consider in detail when they decide to go for Knowledge Management which involves
significant process, mindset and culture change. A successful implementation hinges on
various factors like equal support from the top management and all the employees of the
organisation, the understanding of the various propositions related with the change, the
company’s adaptability for a change etc.


Data was collected from diverse sources such as the internet, books and
periodicals to get a thorough understanding of the finer points of Knowledge
Management such as implementation methods, opportunities etc.

Information relating to the Knowledge Management initiatives at INFOSYS was

collected from the various white papers, which were written and made available on the
Internet, various articles which appeared in the Economic Times etc.


In 1876, the English novelist, George Eliot, wrote that, “Of a truth, Knowledge
is power”. Now, over a century later, that observation still holds true. Knowledge gives
us, as individuals, the power to grow, to better ourselves, and to succeed in our
endeavours. In the business world, knowledge is power as well. As with individuals,
knowledge is what enables businesses to grow and to succeed. Contained within every
business is a wealth of knowledge about its policies and practices, and about the industry
that it serves. A business uses this knowledge to sell and support the products and
services that it offers.

However, knowledge is not held within a business itself, but rather by the various
individuals that make up the organization. Without the knowledge possessed by the
people within it, a business cannot survive. To a business, therefore, knowledge can be
considered an asset, perhaps the most important asset that it has. The primary concern,
then, that must be addressed, if a business is to grow and prosper, is how this knowledge
can best be captured and harnessed. How can companies preserve their existing
knowledge assets, encourage the dissemination of that knowledge across the
organization, and use that knowledge to identify the best business practices and to refine
and improve those practices? The answers to all of these questions lie in the application
of Knowledge Management (KM) to the business’s operations and the adoption of
Knowledge Management Systems within the business infrastructure.


Any discussion of Knowledge Management should, logically, begin with a

definition of ‘knowledge’ itself. Unfortunately, Knowledge is a very slippery concept
with many different variations and definitions, each of which is valid in its own right.
The nature of knowledge and what it means to know something are epistemological
questions that have perplexed philosophers for centuries and no resolution looms on the

According to Webster's Dictionary, knowledge is "the fact or condition of

knowing something with familiarity gained through experience or association". In
practice, though, there are many possible, equally plausible definitions of knowledge. A
frequently used definition of knowledge is "the ideas or understandings which an entity
possesses that are used to take effective action to achieve the entity's goal(s). This
knowledge is specific to the entity which created it."

There are two basic kinds of knowledge in an Organization: Explicit and Tacit.

Explicit knowledge is knowledge that has been articulated and, more often than
not, captured in the form of text, tables, diagrams, product specifications and so on.
According to a Harvard Business Review article titled “The Knowledge Creating
Company”, explicit knowledge is referred to as “formal and systematic” and examples
include product specifications, scientific formulas and computer programs. An example
of explicit knowledge with which we are all familiar is the formula for finding the area of
a rectangle (i.e., length times width). Other examples of explicit knowledge include
documented best practices, the formalised standards by which an insurance claim is
adjudicated and the official expectations for performance set forth in written work
objectives. Thus explicit knowledge is systematically documented know-how that
becomes available to everyone in the organization.

Tacit knowledge is knowledge that cannot be articulated. Tacit knowledge is the

“know how” possessed by individuals. It’s often intuitive and demonstrated more in how
someone goes about his/her work in a knowledgeable way, even though this knowledge is
not written down anywhere. Of course, one of the goals of knowledge management is to

make tacit knowledge more widely available and to the degree possible, capture it in
explicit terms. Tacit knowledge resides in a few, often-in just one person and has not
been captured by the organization or made available to others. It is this tacit knowledge
that provides strategic edge to the organization. Typically tacit knowledge is asked for
and transferred in non-formal situations and so it is extremely difficult to record it.

Data and information are the essential components of Knowledge Management

but are totally different entities. Knowledge often gets mixed up with data and
information and creates problems. The understanding of these three distinct concepts is
therefore equally important.

Data can be broadly defined as a collection of facts, ‘facts’ about specific events
and about an industry in general. These facts can originate from a variety of sources and
includes such items as raw statistics, demographic and marketing information, and so
forth. Data can form the basis of knowledge, as it is gathered, analysed, and synthesized
by individuals within an organization.

Information, which is sometimes referred to as ‘explicit knowledge’, results from

the collection and communication of ideas and experiences. Information is usually
codified into documents, e-mail, voice mail, and other forms of communication, which
can be easily shared between individuals. It is explicit precisely because it has been
‘written down in some format, and it is useful because it can be stored and reused to
avoid the duplication of work and the repetition of mistakes.’

Knowledge, however, transcends both data and information in that it comprises

ideas, experiences, and insights themselves. For this reason, true knowledge is often
referred to as ‘tacit knowledge.’ Knowledge also represents the intelligence that
individuals apply to data and information to draw conclusions and to make decisions.
Without intelligence, information cannot become knowledge. Therefore, it is the
possession of knowledge, along with intelligence and the ability to create new
knowledge, which determines an individual’s value to a business. Thus knowledge is not
just an explicit tangible “thing”, like information, but information combined with

experience, context, interpretation and reflection. Knowledge involves the full person,
integrating the elements of both thinking and feeling.

Where Corporate Knowledge Lies

A study of more than 700 US companies shows that only a small portion of corporate
knowledge is in a shareable form. The majority is in the employee’s brains and
documents not easily shared.

Where Corporate Knowledge Lies

Employee Brains

42% Electronic Knowledge Bases

Paper Documents

Electronic Documents


Unfortunately, there's no universal definition of KM, just as there's no agreement

as to what constitutes knowledge in the first place. For this reason, it's best to think of
KM in the broadest context. Succinctly put, KM is the process through which
organizations generate value from their intellectual and knowledge-based assets. Most
often, generating value from such assets involves sharing them among employees,
departments and even with other companies in an effort to devise best practices. The term
is used loosely to refer to a broad collection of organizational practices and approaches
related to generating, capturing and disseminating know-how and other content relevant
to the organization’s business.

Knowledge management can be explained as an effort by organizations to manage

some or all of the knowledge within them as a resource, much as they manage real estate,
inventory, and human resources. It involves the following:

1. Capturing it; that is, explicitly recording the tacit knowledge within an

2. Cataloguing and storing it; that is, placing the information into a central area
where all members of an organization who have a need to know have access to it

3. Transforming it for use in other contexts (when appropriate); that is, making
connections among pieces of information to create new approaches

4. Disseminating it; that is, transferring knowledge to people when and where they
need it.

Some definitions of "Knowledge Management"

University of Texas: The systematic process of finding, selecting, organizing,

distilling and presenting information in a way that improves an employee's
comprehension in a specific area of interest. Knowledge management helps an
organization to gain insight and understanding from its own experience. Specific

knowledge management activities help focus the organization on acquiring, storing and
utilizing knowledge for such things as problem solving, dynamic learning, strategic
planning and decision making. It also protects intellectual assets from decay, adds to firm
intelligence and provides increased flexibility.

The Biz Tech Network ( Knowledge Management caters to the

critical issues of organizational adaptation, survival and competence in face of
increasingly discontinuous change. Essentially, it embodies organizational processes that
seek synergistic combination of data and information processing capacity of information
technologies, and the creative and innovative capacity of human beings.

Computerworld (Maglitta, 1996): Knowledge management in general tries to

organize and make available important know-how, wherever and whenever it's needed.
This includes processes, procedures, patents, reference works, formulas, "best
practices,” forecasts and fixes. Technologically, intranets, groupware, data
warehouses, networks, bulletin boards videoconferencing are key tools for storing and
distributing this intelligence.

Forbes: (Bair, 1997): Partly as a reaction to downsizing, some organizations are

now trying to use technology to capture the knowledge residing in the minds of their
employees so it can be easily shared across the enterprise. Knowledge management aims
to capture the knowledge that employees really need in a central repository and filter out
the surplus.

Whatever be its definition, Knowledge Management is increasingly seen, not

merely as the latest management fashion, but as signaling the development of a more
organic and holistic way of understanding and exploiting the role of knowledge in
the processes of managing and doing work, and an authentic guide for individuals
and organizations in coping with the increasingly complex and shifting environment
of the modern economy.


Knowledge Management is nothing new. For hundreds of years, owners of family

businesses have passed their commercial wisdom on to their children, master craftsmen
have painstakingly taught their trade to apprentices, and workers have exchanged ideas
and know-how on the job. But it wasn’t until the 1990’s that chief executives started
talking about knowledge management. As the foundation of industrialized economies has
shifted from natural resources to intellectual asset, executives have compelled to examine
the knowledge underlying their businesses and how that knowledge is used. At the same
time, the rise of networked computers has made it possible to codify, store and share
certain kinds of knowledge more easily and cheaply than ever before.

The pursuit of any significant human activity typically leads to the acquisition by
those involved of know-how and expertise as to how the activity may be successfully
conducted. In so far as what is learned in the process can be captured and communicated
and shared with others, it can enable subsequent practitioners - or even generations - to
build on earlier experience and obviate the need of costly rework or of learning by
making the same repetitive mistakes.

The concept of managing knowledge can be traced back to the early 1970's and
first appeared in the realm of academia. Notables such as Peter Ducker and Paul
Strassman stressed the importance of information and explicit knowledge. Peter Senge
stressed on the "learning organization" and the cultural dimension of managing
knowledge. Research at Stanford in the diffusion of innovation and at MIT in information
and technology transfer contributed to mapping an understanding of how knowledge is
produced used and diffused within organizations.

By the mid 1980's, the importance of knowledge as a competitive asset became

apparent. At the same time, the computer technology that itself had contributed so
heavily to the superabundance of information, also became part of the solution. The 80's

also saw the development of systems for managing knowledge that relied on work done
in artificial intelligence and expert systems. These generated the concepts of "knowledge
acquisition", "knowledge engineering", "knowledge-base systems" and "computer-based
ontology’s". At about the same time, the phrase "knowledge management" entered the
corporate lexicon. The initiative for Knowledge Management was started in 1989 by a
consortium of US companies and Knowledge Management (KM) articles began to appear
in management publications like Sloan Management Review, Organizational Science and
Harvard Business Review.

By 1990, a number of management consulting firms had begun in-house KM

programs directed at their own bodies of knowledge, and in 1991, Fortune published
Brainpower, KM introduction to the popular press. Perhaps the most widely read work to
date is Ikujiro Nonaka's and Hirotaka Takeuchi's The Knowledge-Creating Company:
How Japanese Companies Create the Dynamics of Innovation, published in 1995.

Also in the mid-90, and largely because of the Internet, knowledge management
initiatives were thriving. The number of KM conferences and seminars has been growing
as organizations focus on managing and leveraging explicit and tacit knowledge
resources to achieve competitive advantage. Furthermore, with the advent and
acceleration of collaboration technologies, the Internet presents an ever-flourishing
environment for knowledge exchange, creation and management.

Hence, clearly, organizations have been sharing knowledge long before

knowledge management became fashionable in the mid to late 1990s. Organizations have
been knowledge organizations for many years before they explicitly realized that this is
what they are.


Executives in large organizations around the world are increasingly confronted

with the question of how to launch an enterprise-wide knowledge-sharing program. In
some ways the most difficult thing is to get started, i.e. how to persuade the managers and
staff of the organization to adopt the approach with enthusiasm, when at first it seems
unfamiliar, counter-intuitive and strange.

Once the organization has decided to adopt knowledge sharing as an approach,

the management faces the question: what specific action steps need to be taken?
Typically, they will find that they have pilot projects for sharing knowledge informally
under way in parts of their company. But these isolated pilots do not amount to an
enterprise-wide program. To get to the next level and help the company use knowledge
management to make a major change in overall organizational performance, a new set of
actions will be needed.

What should be done? How do they do it? What are the priorities? What are the
most important things to focus on? What can wait for a later stage? The questions stem
not so much from an unawareness of the many things that will need to be done, but rather
a need to prioritise among a daunting array of possible actions, including culture,
structure, processes, organization, and personnel. Since knowledge management can
involve changes in every facet of an organization, it is sometimes hard to know where to
begin. Among the many things that need to be done, the following are among the highest
priority and form the basis on which the KM program should be ideally implemented.

1 Knowledge Management Strategy

2 Organization

3 Budget

4 Incentives

5 Community

6 Technology

7 Measurement

1. “Strategy of Knowledge Management”:

The first and perhaps most difficult part in launching a knowledge management
program is to put in place a strategy for sharing knowledge. It entails a collective
visioning as to how sharing knowledge can enhance organizational performance and the
reaching of a consensus among the senior management of the organization that the course
of action involved in sharing knowledge will in fact be pursued. Implicit in such a
process is a set of decisions about the particular variety of knowledge management that
the organization intends to pursue, including:

1 What knowledge to share? Knowledge-sharing programs may aim at making

available various types of content. The program will be very different depending
on whether the intent is to share know-how, best or good practices, or knowledge
of clients or customers, or competitive intelligence, or knowledge of processes.
The knowledge-sharing program will differ considerably depending on the type of
knowledge being shared. Comprehensive, organization-wide programs for sharing
knowledge typically emerge when the organization’s know-how is perceived as
critical to its mission, where the value of the organization’s knowledge is high,
and where the enterprise is geographically dispersed. In other cases, knowledge-
sharing programs are limited to a specific function, such as sales and marketing or
research, or a specific area of expertise such as engineering.

The question of “what to share” includes not only the type of knowledge, but also
its quality. In organizing knowledge-sharing programs, it is common to put
processes in place to ensure that the content that is shared reaches a certain
minimal threshold of value and reliability. Some programs make no explicit
distinction between different levels of reliability of the material offered, once the

initial threshold has been met, thus allowing users to reach their own conclusions
as to its ultimate value. Other programs, particularly those that offer external
knowledge sharing, provide explicit guidance on whether the material has been
authenticated, so that users can make inferences about its reliability. Most
knowledge-sharing systems also allow in varying degrees the inclusion of new
and promising ideas that have not yet been authenticated and in this sense are not
yet knowledge.

1 With whom to share knowledge? One of the major decisions concerns the
intended beneficiaries of the knowledge-sharing system. Knowledge sharing
programs may aim at sharing with either an internal or an external audience.
Internal knowledge sharing programs typically aim at making the existing
business work better, faster or cheaper, by arming the front-line staff of an
organization with higher quality, more up-to-date and easily accessible tools and
inputs to do their jobs, and so add value for clients or save costs. External
knowledge sharing poses greater risks than internal sharing programs — raising
complex issues of confidentiality, copyright, and in the case of the private sector,
the protection of proprietary assets — but it may also offer greater potential

2 How will knowledge be shared? There needs to be a consensus within the

organization as to the principal channels by which knowledge will be shared,
whether face-to-face, or by way of help desks, by telephone, fax, email,
collaborative tools or the web or some combination of the above. It is important
not to ignore face-to-face communications, since this is still the best and highest
quality to transfer knowledge between individuals.

3 Why will knowledge be shared? Knowledge management is not something that

is undertaken for its own sake, but rather something that supports the business of
the organization. Reaching explicit agreement as to why knowledge is being
shared, and its likely contribution to organizational performance, is crucial to
sustaining support over the medium term. These motivations may relate to

o Increasing speed,

o Lowering costs of operation,

o Accelerating innovation, or

o Widening the client base.

Since pursuing all of these worthy objectives simultaneously may result in a

failure to achieve any of them, it will be useful to make an explicit choice about
objectives from the outset. Moreover, agreement on objectives can help keep
focus: since knowledge management in a large organization is inevitably a long-
term process involving many people in different units of the organization, there is
a tendency for people to forget why the organization is pursuing knowledge
management in the first place, and become distracted with peripheral activities.
Finally, since knowledge management programs inevitably have a cost,
expenditures will need to be justified and defended against those who would
prefer to spend the resources on other activities. Having explicit KM objectives
can help win these budget battles. For instance, in a large global organization
where the explicit objective of knowledge management was improved quality and
responsiveness, attacks on the KM budget on the grounds that it did not lower
costs of operation were unsuccessful in part because the explicit objectives had
never included lowering the costs of operation.

1 Will knowledge be shared? In large organizations, discussions of strategy can

go on for long periods, sometimes years, without ever coming to closure on the
components. In the end, actually crossing the Rubicon and unambiguously
deciding to share and communicating that decision explicitly throughout the
organization is a key step in launching a knowledge sharing strategy. An explicit
decision is critical because knowledge management typically involves a shift from
a vertical hierarchical mode of operation to a horizontal boundary-crossing mode
of operation: such a shift is unlikely to occur on a sustained basis unless that there
is an explicit decision at the very top of the organization that it should occur.
Without such a decision, the opponents of KM will sooner or later be able to
block the shift, and so thwart the organization's systematic ability to share its

Since knowledge management as a conscious practice is so young, executives
have lacked successful models that they could use as guides. Because knowledge is the
core asset of consultancies, they were among the first businesses to pay attention to - and
make heavy investments in – the management of knowledge. They were also among the
first to aggressively explore the use of information technology to capture and disseminate
knowledge. Their experience, which is relevant to any company that depends on smart
people and flow of ideas, provides a window onto what works and what doesn’t.

Consultants do not take a uniform approach to managing knowledge. The

consulting business employs two different knowledge management strategies. In some
companies, the strategy centres on the computer. Knowledge is carefully codified and
stored in databases, where it can be accessed and used easily by anyone in the company.
This strategy is referred to as the codification strategy. In other companies, knowledge is
closely tied to the person who developed it and is shared mainly through direct person-to-
person contacts. The chief purpose of computers at such companies is to help people
communicate knowledge, not to store it. This is referred to as the personalization
strategy. A company’s choice of strategy is far from arbitrary – it depends on the way the
company serves its clients, the economics of its business, and the people it hires.
Emphasizing the wrong strategy or trying to pursue both at the same time can, as some
consulting firms have found, quickly undermine the business.

The two strategies are not unique to consulting. The same two strategies are at
work in computer companies and health care providers. In fact, the choice between
codification and personalization is the central one facing virtually all companies in the
area of knowledge management. By better understanding the two strategies and their
strengths and weaknesses, chief executives will able to make more surefooted decisions
about knowledge management and their investments in it.

How Consulting Firms Manage Their Knowledge


Provide high-quality, Provide creative, analytically

reliable and fast rigorous advice on high-level
information-systems problems by channelling
implementation by reusing individual expertise.
codified knowledge.
 Invest once in a  Charge high fees for
knowledge asset; highly customized
reuse it many solutions to unique
times. problems.
 Use large teams Economic  Use small teams with
with a high ratio of Model a low ration of
associates to associates to partners.
partners.  Focus on maintaining
 Focus on high profit margins.
generating large
overall revenues.
DOCUMENTS:  Develop networks for
 Develop an linking people so that
electronic Knowledge tacit knowledge can
document system Management be shared.
that codifies, Strategy
disseminates, and
allows reuse of

 Invest highly in IT;  Invest moderately in
the goal is to IT; the goal is to
connect people Information facilitate
with reusable Technology conversations and the
codified exchange tacit
knowledge. knowledge.
 Hire new college  Hire MBAs who like
graduates who are problem solving and
well suited to the can tolerate
reuse of knowledge ambiguity.
and the  Train people through
implementation of one to one mentoring.
solutions. Human  Reward people for
 Train people in Resources directly sharing
groups and through knowledge with
computer-based others.
distance learning.
 Reward people for
using and
contributing to

Anderson Consulting, Examples McKinsey & Company

Ernst & Young Bain & Company

Codification or Personalization?

Some large consulting companies, such as Andersen Consulting and Ernst &
Young, have pursued a codification strategy. Over the last five years, they have
developed elaborate ways to codify, store, and reuse knowledge. Knowledge is codified

using a “people-to-documents” approach: it is extracted from the person who developed
it, made independent of that person, and reused for various purposes. Ralph Poole,
director of Ernst & Young’s Centre for Business Knowledge, describes it like this: “After
removing client – sensitive information, we develop ‘knowledge objects’ by pulling key
pieces of knowledge such as interview guides, work schedules benchmark data, and
market segmentation analyses out of documents and storing them in the electronic
repository for people to use.”

This approach allows many people to search for and retrieve codified knowledge
without having to contact the person who originally developed it. That opens up the
possibility of achieving scale in knowledge reuse and thus of growing the business.

Take the example of Randall Love, a partner in the Los Angeles office of Ernst &
Young. Love was preparing an important bid for a large industrial manufacturer that
needed help installing an enterprise resource planning system. He had already directed
projects for implementing information systems for several manufacturers in other
industries, but he hadn’t yet worked on a manufacturing project in this one. He knew
other Ernst and Young teams had, however, so he searched the electronic knowledge
management repository for relevant knowledge. For help with the sales process, he found
and used several presentations on the industry-documents containing previously
developed solutions-as well as value propositions that helped him estimate how much
money the client would save by implementing the system.

Because Love reused this material, Ernst & Young won the project and closed the
sale in two months instead of the typical four to six. In addition, his team found
programming documents, technical specifications, training materials, and change
management documentation in the repository. Because these documents were available,
Love and his team did not have to spend any time tracking down and talking with the
people who had first developed them. The codification of such knowledge saved the team
and the client one full year of work.

Ernst & Young executives have invested a lot to make sure that the codification
process works efficiently. The 250 people at the Centre for Business Knowledge manage
the electronic repository and help consultants find and use information. Specialists write
reports and analyses that many teams can use. And each of Ernst & Young’s more than
40 practice areas has a staff member who helps codify and store documents. The resulting
area databases are linked through a network.

Naturally, people-to-documents is not the only way consultants in firms like Ernst
& Young and Andersen Consulting share knowledge - they talk with one another, of
course. What is striking, however, is the degree of emphasis they place on the
codification strategy.

By contrast, strategy-consulting firms such as Bain, Boston Consulting Group,

and McKinsey emphasize a personalization strategy. They focus on dialogue between
individuals, not knowledge objects in a database. Knowledge that has not been codified –
and probably couldn’t be - is transferred in brainstorming sessions and one-on-one
conversations. Consultants collectively arrive at deeper insights by going back and forth
on problems they need to solve.

Marcia Blenko, for example, a partner in Bain’s London office, had to consider a
difficult strategy problem for a large British financial institution. The client wanted Bain
to help it expand by offering new products and services. The assignment required
geographic and product-line expertise, a broad understanding of the industry, and a large
dose of creative thinking. Blenko, who had been with Bain for 12 years, knew several
partners with expertise relevant to this particular problem. She left voice mail messages
with them and checked Bain’s “people finder” database for more contacts. Eventually she
connected with nine partners and several managers who had developed growth strategies
for financial services institutions. She met with a group of them in Europe, had
videoconferences with others from Singapore and Sydney, and made a quick trip to
Boston to attend a meeting of the financial services practice. A few of these colleagues
became ongoing advisers to the project, and one of the Asian managers was assigned full

time to the case team. During the next four months, Blenko and her team consulted with
expert partners regularly in meetings and through phone calls and e-mail. In the process
of developing a unique growth strategy, the team tapped into a worldwide network of
colleagues’ experience.

To make their personalization strategies work, firms like Bain invest heavily in
building networks of people. Knowledge is shared not only face-to-face but also over the
telephone, by e-mail, and via videoconferences. McKinsey fosters networks in many
ways: by transferring people between offices; by supporting a culture in which
consultants are expected to return phone calls from colleagues promptly; by creating
directories of experts; and by using “consulting directors” within the firm to assist project

These firms have also developed electronic document systems, but the purpose of
the systems is not to provide knowledge objects. Instead, consultants scan documents to
get up to speed in a particular area and to find out who has done work on the topic. They
then approach those people directly.

Consulting companies manage knowledge by using both the codification and the
personalization approaches. However, effective firms excelled by focusing on one of the
strategies and using the other in a supporting role. They do not try to use both approaches
to an equal degree.

2. “Organizing for knowledge management”:

In order to launch enterprise-wide knowledge sharing, some kind of

organizational arrangements need to be put in place. Organizations are still experimenting
with the right way to organize – some putting the function in the computing group, some
putting it in strategy or finance, some putting it in operations, and some locating it as a
function of top management. Whatever the organizational location, a pattern of
arrangements that is becoming increasingly common includes:

1 a very small ‘central coordinating unit’ with overall coordination responsibility
and spearheading the change process in the organization, making the case for
change, solving problems as they emerge, measuring progress, providing support
to communities of practice, and in general, doing whatever needs to be done in
order for knowledge management to succeed.

2 Decentralized implementation responsibility resting with line managers of the

existing business;

3 Communities of practice or help desks as the key instrument for sharing; and

4 Some kind of capacity to make organization-wide policy decisions.

There is less agreement as to where to place the coordinating unit. Some

organizations place it in the computer group. Some place it in the strategy or finance
group. Some place it in general operations. No matter where the unit is located, there are
risks and dangers:

1 The danger with placing the coordination unit in the computer group of an
organization is that knowledge management will become associated with
information technology, rather than being seen as a better way of pursuing the
organization's business.

2 The risk of placing the coordination unit in strategy or in general operations is that
there will be inadequate coordination with IT.

3 The risk of placing the unit in the strategy group may be the lack of connection to
day-to-day operations.

Ultimately, there is thus no absolute right answer as to where to place the

coordinating unit. Each organization will decide where to place the coordinating unit,
depending on the politics and preoccupations of the organization at the time. If the
computer group provides a congenial and supportive home for the unit, that may be the
best interim location.

The size of the coordinating unit, even in large organizations, is usually less than
ten people. Larger units have been tried, but have mostly been dismantled, as they
encourage excessive centralization of a function, which should be decentralized. It is

important to keep the implementation arrangements light and flexible, so that they can be
adjusted to deal with changes in the organization's business.

3. “Budget for knowledge management”:

The provision of financial resources for sharing knowledge is often an

unambiguous signal to staff that the organization has definitely decided to incorporate
knowledge sharing into the way the organization functions. Funding will be needed to
cover the incremental costs of the central coordinating unit, the technology and the
communities and help desks. The main focus of the financial provisioning should be on
support to operations. If more than 20% of the resources are being spent on technology, a
review may be warranted as to whether knowledge sharing has become confused with
information management.
In the more knowledge-intensive organizations, the expenditures for knowledge
management can be quite significant. For instance, it has been estimated that the major
consulting firms may spend as much as 6-12 % of revenues on knowledge sharing
programs. While few organizations could, or even should, attain these levels of spending,
there does need to be recognition that knowledge sharing does not run on air and
appropriate funding needs to be provided.

4. “Incentives for knowledge management”:

People need incentives to participate in the knowledge sharing process. Since

knowledge sharing usually entails a change in the way the business of an organization is
conducted – often, it entails a shift from vertical “look up and yell down” modes of
behavior to horizontal knowledge-sharing behaviors – it is important that the relevant
behaviors are reflected in whatever incentive systems are in place in the organization.
Thus, it is important that the value of knowledge sharing be reflected in the on-going
personnel evaluation, periodic merit review or pay bonuses of the organization, so that
managers and staff can see that knowledge sharing is one of the principal behaviors that
the organization encourages and rewards.

It is important that knowledge sharing be designated as one of a small number of
core behaviors that are rewarded in the performance review system. Getting agreement
across a large organization to focus on knowledge sharing, as one of a small number of
core behaviors is not easy, and even when accomplished, does not have any instant effect.
In the short run, there is often cynicism and posturing, but the experience of
organizations, particularly the large consulting firms, is that over time such a change
sends an unmistakable signal throughout the organization, which does accelerate the
intended behavioral change.

In practice, informal incentives, in the form of recognition by management, and

visibility within the organization can often be more powerful incentives than the formal
incentive system.

While the establishment of formal incentives is important for the long-run

sustainability of a knowledge management program, it is easy to over-estimate the value
of incentives. The absence of formal incentives in the early days of knowledge sharing
can become a pretext for not implementing the program. The establishment of rewards
for individual knowledge sharing activities can signal the importance of knowledge
sharing, but also run the risk of creating expectations of rewards for behavior that should
be part of the normal way of conducting the business of the organization.

In the long-term, however, the establishment of incentives through the regular

personnel and reward system of the organization can establish a clear value framework
that confirms that knowledge sharing is not a mere management fad, but rather part of the
permanent fabric of the organization.

5. “Communities for knowledge management”:

In the field of knowledge management (KM), a Community Of Practice (COP)
is one of the more prevalent mechanisms for sharing organizational knowledge.

Definitions of community of practice vary somewhat, but are usually taken to

mean a group of practitioners who share a common interest or passion in an area of
competence and are willing to share the experiences of their practice. Often, COPs are
composed of people in a company who have the same job, such as members of a field
sales force or mechanical engineers. But COPs can also include employees who may
have similar skills and expertise but work in several divisions of a company, such as
project managers. It differs from a work team, principally in that it has no specific time-
bound work objective, but exists indefinitely for the promotion of the issue or issues
around which the community is formed. Organizations should not apply team-oriented
processes to COPs. Requiring a COP to provide status reports or allocate its time to
various projects imposes a degree of structure that will only serve to inhibit the free flow
of ideas. It's better to let the community figure out how to do its own work.

In undertaking knowledge sharing programs, most organizations have found –

sooner or later – that the nurturing of knowledge-based communities of practice is a sine
qua non to enabling significant knowledge sharing to take place. Such communities are
typically based on the affinity created by common interests or experience, where
practitioners face a common set of problems in a particular knowledge area, and have an
interest in finding, or improving the effectiveness of, solutions to those problems.
Various tools can be used to strengthen such communities, including the establishment of
specific work objectives for the community, the provision of adequate staff, financial
resources, technology and management support to enable it to conduct its activities.

Communities of practice tend to have different names in different organizations,


o Communities of practice

o Thematic groups (World Bank)

o Learning communities or networks (Hewlett Packard)

o Best practice teams (Chevron)

o Family groups (Xerox)

Communities of practice are relevant in both the connecting and collecting

aspects of knowledge sharing.

1 Connecting people who need to know with those who do know requires an
element of trust that is often lacking in large organizations, particularly when it
comes to sharing knowledge across organizational boundaries. Thus, asking for
advice or other opinions can be seen in a low-trust environment as tantamount to
an admission of ignorance. Advertising that ignorance across the entire
organization is unlikely to occur if there is a risk that it may have personnel
sanctions, particularly in organizations that are downsizing, or looking to save
costs by laying off personnel.

2 Collecting knowledge so that it can be shared through the web or other

technology also comes to be dependent on communities, since it is only in
communities of practitioners that share common objectives and pre-occupations
that it can become apparent as to what knowledge needs to be shared. Efforts to
build knowledge collections in the hope that "users will come" almost always
encounter a disappointing response, since the builders find it difficult to anticipate
what knowledge users will want, and even if they succeed in theory, the users will
regard the collection as something external and foreign unless they had a hand in
designing and constructing it. The experience underlines the difference between a
reference tool such as an information system and knowledge collections: the
former can be effective if the information is relevant and correct, in the same way
that a yellow-pages telephone directory can be useful. The latter depends for its
dynamic and living quality on the active participation of those who use it, since
knowledge is a much more personal affair than data or information.

Communities depend on the fundamental finding that communities thrive on

passion, and die from lack of it. That is to say, communities depend on the members of
the community being interested in, enthusiastic about and committed to the issues around

which the community is formed. Communities comprise volunteers, not conscripts, and
the community exists only so long as the members are willing to contribute their time and
effort to promoting the community and its interests. Communities cannot be commanded
into existence, and if this is attempted, they will become something other than a
community, except in name.
Launching and nurturing communities of practice for knowledge sharing programs can be
accomplished in a variety of ways.

1 Endorsing informal communities that already exist: In almost any

organization, there are bound to be at least some informal communities that exist,
without management support or even awareness. Finding out what they are and
where they are and how they can be supported can be an important first step in
demonstrating that communities of practice are not something foreign, but
something "home-grown".

2 Asking practitioners what issues they care about: Often the most effective way
of nurturing communities of practice is to consult practitioners as to what issues
they care about, and worry about, and would like to find out more about. The
results of such consultations which can take place in informal focus groups or in
structured groupware sessions can then be used to elicit volunteers to come
forward and lead communities built on the issues about which the practitioners
care most. In this fashion, the chances of having communities built on issues,
issues about which members are passionate, are enhanced.

3 Instructing leaders to form communities: Having the management instruct

leaders to form communities is usually a recipe for disaster, unless the leaders so
designated happen to be informal leaders on the relevant issues, or unless they
elicit the co-leadership of others who possess this informal leadership status.
Without such support, the communities may exist on paper and may occasionally
perform functions for the organization, but the dynamism and energy of genuine
communities is likely to be lacking.

4 Launching communities among the "incorrigibles": In any organization, one

will find staffs that are naturally and enthusiastically attracted to participate in

communities of practice. One will also find staffs that are naturally antipathetic to
communities for a variety of reasons, including habits of hierarchical behaviour,
distrust of fellow practitioners, or organizational game playing. Provided that
there are many active communities in core areas of the business, the knowledge
management program might choose to ignore these "incorrigibles" either totally,
or until such time as the measures to encourage compliance with organizational
priorities (budgets, formal incentives, measurement) eventually "kick in", so that
even incorrigibles find it difficult to go on working successfully in the
organization, unless they at least go through the motions of participating in

Among the key elements for launching communities are:

1 A knowledge sharing vision that makes sense for the business: Since
communities comprise volunteers, not conscripts, it is vital that the management
has articulated a compelling vision of knowledge sharing that makes sense to
front-line practitioners. Without this, communities of practitioners will never
form or survive.

2 Budgets: Financial resources or budgets for communities can be an unmistakable

sign that communities have an official status in the organization, even if they are
not part of the formal organization chart. Resources may be needed for instance

o Building knowledge collections that are of relevance to community

members and that help staff do their jobs better?

o Outreach to the community members, such as holding informal meetings

and clinics, issuing newsletters and the like; and

o Funding of ad hoc advice for those experts who will be expected to

provide unprogrammable advice from time to time.

Care has to be taken that financial resources are made available in such a way that
both the priorities of the organization and the independence and the dynamism of
the community is preserved.

1 Incentives for communities: Participation in a community is a volunteer activity,
based on personal interest and passion, and cannot be "bought" with financial
incentives. Nevertheless, the reflection of knowledge sharing in the personnel
system of the organization can send a signal, reinforcing the budget allocations,
that participation in communities is not something extraneous or "extra-
curricular" but rather part of the core business activity of the organization.

Raison d'etre for communities: The dynamic to create communities of practice

is irresistible: knowledge sharing is often essential to organizational survival, and
communities of practice are usually essential to any effective knowledge sharing. Hence
communities of practice are essential to organizational survival.

The effectiveness of a community is most easily measured by surveying the

members of the community and asking them whether and to what extent the community
has proved helpful to them and why. Such surveys can however give false positives, in
the case of communities, which have become self-serving or exclusionary in their mode
of operation. More valid, albeit more expensive, measures can be obtained by tracking
client or customer satisfaction in areas covered by the community.

6. “Technology for knowledge management”:

The reach of know-how and experience possessed by individuals can be greatly

extended once it is captured and explicated so that others can easily find it and
understand and use it.

Reports of activities, minutes of meetings, memoranda, proceedings of

conferences and document filing systems maintained by organizations are traditional
commonly used devices for recording content in paper format so that it can be transferred
to others.

The availability of new information technology, particularly the World Wide

Web, has been instrumental in catalysing the knowledge management movement.

Information technology may, if well resourced and implemented, provide a
comprehensive knowledge base that is speedily accessed, interactive, and of immediate
value to the user. However there are also many examples of systems that are neither
quick, easy-to-use, problem free in operation, or easy to maintain. The Web, for example,
frequently creates information overload. The development of tools that support
knowledge sharing in an appropriate and user-friendly way, particularly in organization-
wide knowledge sharing programs, is thus not a trivial task.

Most of the technological tools now available tend to help dissemination of know-
how, but offer less assistance for knowledge use. Tools that assist in knowledge creation
are even less well developed, although collaborative workspaces offer promising
opportunities, by enabling participation, across time and distance, in project design or
knowledge-base development, so that those most knowledgeable about development
problems — the people living them on a day-to-day basis – can actively contribute to
their solution. Some of the more user-friendly technologies are the traditional ones —
face-to-face discussions, the telephone, electronic mail, and paper-based tools such as flip
charts. Among the issues that need to be considered in providing information technology
for knowledge sharing programs are:

1 Responsiveness to user needs: continuous efforts must be made to ensure that

the information technology in use meets the varied and changing needs of users.

2 Content structure: in large systems, classification and cataloguing become

important so that items can be easily found and quickly retrieved.

3 Content quality requirements: standards for admitting new content into the
system need to be established and met to ensure operational relevance and high

4 Integration with existing systems: since most knowledge sharing programs aim
at embedding knowledge sharing in the work of staff as seamlessly as possible, it
is key to integrate knowledge-related technology with pre-existing technology

5 Scalability: solutions that seem to work well in small groups (e.g. HTML web
sites) may not be appropriate for extrapolation organization-wide or on a global

6 Hardware-software compatibility is important to ensure that choices are made

that are compatible with the bandwidth and computing capacity available to users.

7 Synchronization of technology with the capabilities of users is important so as to

take full advantage of the potential of the tools, particularly where the technology
skills of users differ widely. Knowledge sharing programs that focus on the
simultaneous improvement of the whole system, both technology tools and human
practices, are likely to be more successful than programs that focus on one or the

7. “Measuring knowledge management programs”:

Organization-wide knowledge sharing programs require significant investments

and will entail major management effort, as well as behavioral changes throughout the
organization over a significant period of time. In large organizations, given the likely
large scale of activity, systematic efforts are to be in place to provide reliable information
on both the progress and shortfalls in performance. Without measurement, there is an
ever-present danger of premature abandonment of successful efforts, or alternatively, of
complacent continuation of unsuccessful efforts when course correction is needed.

Putting in place a system for measuring progress is therefore an essential step for
a sustainable knowledge-sharing program. The organization must be prepared to accept
some ambiguity, or at least to rely on non-traditional measures, when it tries to evaluate
the impact of knowledge sharing. Measuring that impact, either in terms of return on
investment (for private companies) or development impact (for public sector institutions),
remains problematical. In principle, inputs lead to activities, which generate outputs,
which in turn produce outcomes, which in turn result in overall impact. But each link of
this chain poses its own measurement difficulties.

In the early stages of the program, the focus will inevitably be on inputs (such as
dollars invested or staff recruited) and activities (such as help desks or communities
established or knowledge resources made available).

As the program gathers momentum, the focus of measurement will increasingly

shift to outputs (numbers of queries responded to, amount of material downloaded from
the web, or usage of electronic tools) and outcomes (such as changes in turnaround times
or unit costs or comparisons with competitors).

The difficulties in measurement in knowledge management are not necessarily a

fatal flaw. Once there is a realization that the choices facing a global organization are
binary - either to share knowledge or to die - the task becomes, not one of justifying
whether to undertake knowledge sharing, but rather how to conduct it more effectively.

Knowledge managers will be expected to talk of knowledge as something that can

be valued (even if not absolutely) and tracked by accountants as a form of intellectual
capital, something that can be traded for a certain value, something that accountants can
put on the balance sheet and track from quarter to quarter, a resource that can be
extracted from stores of information, the way a precious mineral is extracted from a rock.
Whatever the truth of the matter, they will be pressed to present knowledge as though it is
an object, rather than what it really is, namely, a living, dynamic volatile aspect of human


Knowledge sharing is becoming the central driver of the new millennium

economy. More and more companies are now recognizing human capital as the major
asset to business success, access to knowledge and just-in-time learning. The continuous
changes and innovations in information technology and telecommunications will make
knowledge even more accessible.

As the unit costs of computing, communications and transactions decline towards zero,
all economic sectors are going through major and rapid transformations. Economic
success in this fast pace environment requires considerable agility and adaptability. Those
countries, sectors and organizations that can adapt will flourish in the new millennium.

Over the last five-to-six years, companies have increasingly been using new
organizational models to capture and spread new ideas and know-how. Communities of
practice and networks have emerged to complement existing hierarchical structures. As a
consequence they have radically galvanized knowledge sharing, learning and innovation.

As experience was acquired of implementing knowledge sharing in many different

organizations in different countries and different cultures in the public and private sector,
the initial impression was one of diversity of terminology, concepts and approaches,
along with the differences in context in which knowledge sharing was being applied.

More recently, however, as the richness of the knowledge sharing experience has
been digested, it has become clearer that certain features of the knowledge sharing
experience are common across most, if not all, organizations that attempt to implement
an organization-wide program. If the universality of these features is confirmed by
further study, these features might eventually attain the status of the “laws” of knowledge
management. The seven laws of KM are:

1 Knowledge is key to business survival

2 Communities are the heart and soul of knowledge sharing

3 Virtual communities need physical interaction

4 Passion drives communities of practice

5 Knowledge sharing has an inside-out and an outside-in dimension

6 Storytelling ignites knowledge sharing

Law 1. Knowledge is a key to economic survival

In the new knowledge economy, knowledge sharing is increasingly seen as the
sine qua non to survival. Traditional hierarchical organizations cannot cope with fast-
changing client demands unless they are able to agilely share knowledge among
employees, partners and clients. Innovations and the creation of new e-business lines
depend on communal rather than individual knowledge. The knowledge of the
community is always larger than the individual’s. Someone else in the group already
knows capturing what and adding one’s own knowledge is often faster and more efficient
than an individual reinventing a solution. For this to occur, organizations need to develop
knowledge sharing culture and processes. In this situation, knowledge sharing is not
merely an alternative strategic option: knowledge sharing is required for organizational

Law 2. Communities: heart and soul of knowledge sharing

Knowledge sharing only takes place on a significant scale where organizations

have organized themselves into communities of practice. These communities need to be
“integrated” to the company’s strategy and its organizational structure.

The phenomenon of communities of practice is known under different names. In

the World Bank, they are called thematic groups; in Hewlett Packard they are "learning
communities" or "learning networks"; in Chevron they are called "best practice teams",
and in Xerox they are know as "family groups".

Whatever the name, the formation of professional groupings where people

voluntarily come together with others to share similar interests and learn from others’
skills has become the common feature of knowledge organizations. Vibrant communities
operate in an environment of trust and mutual understanding, which encourages learning
and candid dialogue. They are safe places where people who do not know can learn from
those who do know. Learning and knowledge transfer can be accelerated when email or
the World Wide Web electronically links community members to each other.

Information technology is insufficient by itself to create knowledge, but can be a
catalytic tool, which gives global reach to community members across large distances
and time zones. This would have been scarcely possible even ten years ago. Building
"learning organization" requires building communities within which learning can take
place. Without communities linked to structure, organizations don't learn very fast at all.

Law 3. Virtual communities need physical interaction

While technology has dramatically expanded the possibilities for global

communities operating in a virtual mode, with members scattered around the world
communicating seamlessly by email and the World Wide Web, many organizations have
found it difficult to launch communities without initial face-to-face meetings of at least
some of the members. There are no true communities in which a portion of the members
do not periodically get together in person, see each other face-to-face, look each other in
the eye, sniff each other out, and interact so as to establish the bonds of trust and affinity
that are needed in communities. Without such face-to-face meetings, most organizations
have found it difficult to get communities even started. Once a community has been
launched, the absence of periodic face-to-face time leads to entropy, as the community
starts to lose energy, and eventually dies.

Law 4. Passion is the driver of communities of practice

The experience of knowledge sharing shows that communities of practice only

flourish when their members are passionately committed to a common purpose, whether
it be the engineering design of water supply systems, the pursuit of better medical
remedies, or more efficient economic techniques.

Efforts at building communities in a hierarchical or top-down fashion are at best

successful on a temporary basis. Soon they come unstuck as members refuse to contribute
their time to activities that have no meaningful purpose for them. Instead, they will be

looking for professional interest groups who will give them a sense of professional and
personal raison d’etre.

The necessity for passion in the workplace is a hard lesson for companies and
executives who have spent their lives trying to keep emotion out of the work place.
Nevertheless the lesson repeatedly emerges from case studies and benchmarking of
knowledge sharing programs. As a result - for reasons of sheer efficiency and
effectiveness - the modern workplace is finding it necessary to provide time and space for
both the head and the heart.

In the process, it is discovered that communities also enrich organizations and

personal lives. Nurturing communities of practice and building on positive human
emotions in the workplace provide a key to creating and developing healthier forms of
organizations. The limited liability company has been an invention that has helped
generate immense wealth. It has also led for the most part to emotionally desiccated lives
for the individuals who work in these organizations. The emergence of non-hierarchical
communities of practice and the central role of passion in cementing them can lead not
only to an enhanced form of organization capable of generating even greater wealth, but
would also provide more meaningful lives for those who work within.

Law 5. Knowledge sharing: the inside-out and outside-in dynamic

Starting and implementing knowledge sharing in an organization must be done

from inside, not outside. This means that using outsiders such as consultants to "kick
start" or "do it for us" doesn’t work. The successful knowledge sharing programs appear
to be driven by insiders. This means that the person charged with starting/implementing
knowledge sharing must have credibility among both the line and staff functions, so that
when he/she says "here's the direction we're going in", people start moving in that

It is vital that the changes be made from inside the organization, not grafted on

from the outside (or by outsiders). The insiders must "own" the process, be involved in
all aspects of it, make the changes happen, encourage others to make the changes and to
get involved. Only they can do that legitimately, and with organizational (or internal
political) savvy.

That said, the inside person must also use the outside world to validate and "push"
the agenda forward within the organization. For example, using the external recognition
and knowledge fairs and expos as ways of showing that what is happening internally is
valid, good, useful, appropriate, adds value, correct etc. This legitimizes the activities,
which consequently makes it "all right" for others to jump on board.

Law 6. Storytelling ignites knowledge

As organizations start on their knowledge journey, they inevitably find great

difficulties in communicating complicated ideas through abstract forms of
communication. This is even truer where this knowledge journey also implies large-scale
changes in behavior and understanding of the mission of the organization. Telling stories
that build on real knowledge sharing situations enables individuals to gather in some of
the understanding of the storyteller as well as recast the story into their own contextual
work environment; hence adding their own understanding to the process. Organizations
are finding that the marriage of narrative and abstract communications provides a more
powerful tool for sharing knowledge than merely abstract communications.


Lever Key Activities Example

Customer Developing deep knowledge Steel case - an office products

Knowledge sharing relationships. manufacturer has totally
Understanding the needs of redefined its market into

your customers' customers. knowledge worker productivity
Articulating unmet needs. through opening a customer
Identifying new opportunities. knowledge channel from its
product end-users into its

Stakeholder Improving knowledge flows Toshiba collects comparative

Relationships between suppliers, data on suppliers ranking 200
employees, shareholders, and quantitative and qualitative
community etc. using this factors. It has an active
knowledge to inform key suppliers network and
strategies. association where knowledge is
shared and suppliers are
integrated into future strategies.

Business Systematic environmental Smith Kline Beecham has

Environment scanning, including political, evolved a virtual library that
Insights economic, technology, social delivers market updates, patent
and environmental trends. information and a wealth of
Competitor analysis. Market externally sourced material to
intelligence systems. the desktops of its research

Organizational Knowledge sharing. Best Price Waterhouse is typical of

Memory practice databases. several consultancies that have
Directories of expertise. knowledge databases to allow
Online documents, sharing of company
procedures and discussion knowledge. In addition to the
forums. Intranets. KnowledgeViewSM they have
knowledge centres that provide
human analysts and navigators.
It helps them solve customer
problems faster.

Knowledge in Embedding knowledge into CIGNA made their best
Processes business processes and underwriting knowledge
management decision- available as guidance screens
making. in their computerized
underwriting processes. This
helped them turn a loss into a

Knowledge in Knowledge embedded in Campbell Soup's "Intelligent

Products and products. Surround products Quisine" (IQ) delivers weekly
Services with knowledge e.g. in user packages of nutritionally
guides, and enhanced designed, portion-controlled
knowledge-intensive services. meals to those suffering
hypertension or high

Knowledge in Knowledge sharing fairs. Tetra Pak Converting

People Innovation workshops. Expert Technologies has learning
and learning networks. networks, where people from
Communities of knowledge across the organization update
practice. and develop their expertise in
key technologies such as
laminating and printing.

Getting Employees on Board

The major problems that occur in Knowledge Management usually result

because companies ignore the people and cultural issues. In an environment
where an individual's knowledge is valued and rewarded, establishing a culture
that recognizes tacit knowledge and encourages employees to share it is critical.
The need to sell the KM concept to employees shouldn't be underestimated; after
all, in many cases employees are being asked to surrender their knowledge and
experience - the very traits that make them valuable as individuals.

One way companies motivate employees to participate in KM is by
creating an incentive program. However, then there's the danger that employees
will participate solely to earn incentives, without regard to the quality or
relevance of the information they contribute. The best KM efforts are as
transparent to employees' workflow as possible. Ideally, participation in KM
should be its own reward. If KM doesn't make life easier for employees, it will

Allowing Technology to Dictate KM

KM is not a technology-based concept. Software vendors touting their all-

inclusive KM solutions should not dupe companies. Companies that implement a
centralized database system, electronic message board, Web portal or any other
collaborative tool in the hope that they've established a KM program are wasting
both their time and money.

While technology can support KM, it's not the starting point of a KM
program. Companies should make KM decisions based on who (people), what
(knowledge) and why (business objectives). The how (technology) part can be
discussed last.

Not Having a Specific Business Goal

A KM program should not be divorced from a business goal. While

sharing best practices is a commendable idea, there must be an underlying
business reason to do so. Without a solid business case, KM is a futile exercise.

KM Is Not Static

As with many physical assets, the value of knowledge can erode over
time. Since knowledge can get stale fast, the content in a KM program should be
constantly updated, amended and deleted. What's more, the relevance of
knowledge at any given time changes, as do the skills of employees. Therefore,
there is no endpoint to a KM program. Like product development, marketing and
R&D, KM is a constantly evolving business practice.

Not All Information Is Knowledge

Companies diligently need to be on the lookout for information overload.

Quantity rarely equals quality, and KM is no exception. Indeed, the point of a KM
program is to identify and disseminate knowledge gems from a sea of


The main function of the knowledge sharing position would be to help champion
organization-wide knowledge sharing, so that the organization’s know-how, information
and experience is shared inside and (as appropriate) outside the organization with clients,
partners, and stakeholders.

Key responsibilities include:

2 Promoting knowledge sharing through the organization's operational business

processes and systems by, among others, strengthening links between knowledge
sharing and the information systems, and improving integration among
information systems in the organization, to facilitate seamless exchange of
information across systems;

3 Promoting collaborative tools such as activity rooms to facilitate sharing of ideas
and work among internal teams and external partners;

4 Providing support for the establishment and nurturing of communities of practice,

including workshops, one-on-one guidance, and troubleshooting;

5 Sharing experiences across communities of practice, business units, and networks

on innovative approaches in knowledge sharing, including preparation of case

6 Helping monitor and evaluate the knowledge sharing program, including external
benchmarking and evaluation programs/opportunities;

7 Helping disseminate information about the organization's knowledge sharing

program to internal and external audiences, including organizing knowledge
sharing events (such as knowledge fairs, site visits, interviews), maintaining
communications on knowledge sharing across the organization, participation in
orientation and training sessions, and preparation of brochures/presentations.


Communications: Ability to get consensus and collaboration across many business units;
ability to explain complex concepts in layman's language; ability to generate enthusiasm;
ability to communicate with all levels of management and staff. Establishing
straightforward, productive relationships; treating all individuals with fairness and
respect, demonstrating sensitivity for cultural and gender differences; showing great drive
and commitment to the organization’s mission; inspiring others: Maintaining high
standards of personal integrity;

Client Orientation: Understands clients' needs and concerns; responds promptly and
effectively to client needs; customizes services and products as appropriate.

Drive for Results: Makes things happen; Is proactive; balances "analysis" with "doing";
sets high standards for self; Commits to organizational goals.

Teamwork: Collaborates with others in own unit and across boundaries; acknowledges
others' contributions; works effectively with individuals of different culture and gender;
willing to seek help as needed. Influencing and resolving differences across

organizational boundaries: Gaining support and commitment from others even without
formal authority; resolving differences by determining needs and forging solutions that
benefit all parties; promoting collaboration and facilitating teamwork across
organizational boundaries.

Learning and knowledge sharing: open to new ideas; shares own knowledge; applies
knowledge in daily work; builds partnerships for learning and knowledge sharing.

Analytical Thinking and Decisive Judgment - analyzing issues and problems

systematically, gathering broad and balanced input, drawing sound conclusions and
translating conclusions into timely decisions and actions.


Since management as now practiced is a faddish activity, with each new fashion
following the previous with dizzying rapidity, it is not surprising that managers who were
caught flat-footed when knowledge management became the craze, are already looking
beyond it to discern the next wave. Could it be e-business? Does this mean that
knowledge management is already passé, and can be safely skipped?

In fact, the arrival of e-business only underlines the necessity for organizations to
adopt systematic approaches to sharing knowledge. The demands of e-business for rapid
response and agile adaptation to the market-place is a challenge both for the new dotcoms
springing up (the "clicks") and the older traditional companies (the "bricks") that are
trying to adapt to the new world of electronic business.

E-commerce: A minimal response to enable survival in this fast-paced world is to

offer e-commerce, in which sharing of existing services and products
electronically through the Web. For this purpose, the rapid sharing of know-how
among employees is already a necessity. Without it, the company finds itself
publicly stumbling through inability to respond to the requirements of the
marketplace, whether it be B2B or B2C.

E-Business: An e-commerce approach may be enough to enable an organization

to get by and stave off imminent death. But growth in this new electronic world
requires something more. It will require innovation and the generation of new
businesses, with sharing of know-how among not only staff but also partners and
customers in new and unexpected ways. Strategic knowledge sharing, particularly

external sharing will affect every aspect of the organization's activities and will
become a necessity.


Several of the Knowledge Management initiatives fail in a number of

organizations. The causes could be attributed to a variety of reasons. Perhaps
unavoidably, KM suffers from a certain amount of hyperbole, resulting from
overenthusiastic efforts to sell it. For example, several existing products, which have
been touted in the past as tools for decision-support, information management or data
management, are being "born again" as KM products. For KM to be seen in a realistic
perspective, it is thus imperative to strip away this Emperor’s-new-clothes syndrome.
Another reason could be that it is highly equated with technology and sometimes its true
critical success factors are lost in the pleasing hum of servers, software and pipes. As
vendors label their document management, database or groupware products "knowledge
management solutions," executives can be excused for mistaking the software for the
solution when in the real sense it is not. Also there are several myths associated with KM.
Some of them are as follows:

MYTH: Knowledge management technologies deliver the right information to the

right person at the right time.

This idea applies to an outdated business model. Information systems in the old
industrial model mirror the notion that businesses will change incrementally in an
inherently stable market and executives can foresee change by examining the past. The
new business model of the Information Age, however, is marked by fundamental, not
incremental, change. Businesses can't plan long-term; instead, they must shift to a more
flexible "anticipation-of-surprise" model. Thus, it's impossible to build a system that

predicts who the right person at the right time even is, let alone what constitutes the right

MYTH: Information technologies can store human intelligence and experience.

Technologies such as databases and groupware applications store bits and pixels
of data. But they can't store the rich schemas that people possess for making sense of data
bits. Moreover, information is context-sensitive. The same assemblage of data can evoke
different responses from different people. The reason this is important is that many
information textbooks say that while people come and go their experience can be stored
in databases. But unless you can scan a person's mind and store it directly into a database,
you cannot put bits into a database and assume that somebody else can get back the
experience of the first person.

MYTH: Information technologies can distribute human intelligence.

Again, this assumes that companies can predict the right information to distribute
and the right people to distribute it to. And bypassing the distribution issue by compiling
a central repository of data for people to access doesn't solve the problem either. The fact
of information in a database doesn't ensure that people will see or use the information.
Most of our knowledge management technology concentrates on efficiency and creating
a consensus-oriented view. The data therein is rational, static and without context. And
such systems, he adds, do not account for renewal of existing knowledge and creation of
new knowledge.



Infosys is the leader in providing IT consulting and software services to the

world's finest organizations. Infosys Technologies Limited was established in India in the
year 1981. Infosys specialises in offering a complete range of software and consulting
services such as business-technology consulting, Internet and e-business consulting,

system integration, custom application development, re-engineering and sustenance
amply supported by the company’s execution methodologies and delivery models. Over
the years, Infosys has grown into one of the major IT companies in the world and now
has offices in different parts of the world such as the U.S., Japan, Canada, U.K.,
Germany, Belgium, Australia, France, Scandinavia and Hong Kong.

Infosys’ business model focuses on having a long-term strategic relationship with

clients and a significant portion of their revenue comes from repeat business. Their
solutions include building next generation communication, networking and e-
infrastructure products for their clients. Their global delivery model leverages cost-
competitive development centres in different parts of the world to provide high quality,
rapid time-to-market solutions on time and within budget.

Various Fortune 1000 companies leverage on the expertise of Infosys to align

their business and IT strategies and successfully transform themselves for the new
economy. Infosys’ also partners leading-edge technology companies looking to be the
architects of the Internet infrastructure. The sustained growth of Infosys as a technology
company delivering business advantage comes from their presence at the top of the
technology evolution and maturity curve. In a world where excellence in execution is the
key to success, Infosys has an enviable record of completing 85% of its projects on
schedule. Infosys' well-defined processes and a strong Body of Knowledge enables the
company to capture effectively the best practices of every project implemented.

The primary driver for Infosys’ Knowledge Management (KM) strategy is that, as
the company climbs the value curve, it increasingly needs effective mechanisms for
speedy and efficient consolidation of expertise. The large consulting organizations are the
most enthusiastic users of KM, and as Infosys’ business profile evolves to more closely
mirror the profile of these organizations, KM becomes an imperative. The turbulent
scenario of the e-business era, with its premium on speed, agility and competitive
intensity, has given a further fillip to this need.

The goal of Knowledge Management (KM) in the Infosys context is that all
organizational learning must be leveraged in delivering business advantage to the
customer. The objectives are to minimize effort dissipated in redoing learning that has
already happened elsewhere, and ensuring that Infoscions (as employees at Infosys are
called) in contact with the customer have the collective knowledge of the organization
behind them. The company thus aims to move towards a "Learn Once, Use Anywhere"

The conception and implementation of the KM strategy is anchored by a Central

KM group, which forms a part of the E&R department. The group currently consists of
four fulltime staff, and has a sanctioned strength of eight. When ramped up to its full
strength, the group will have three sub-groups – one each to oversee KM research and
content management, technology architecture development and maintenance, and internal
publicity and brand management. Efforts are also on to identify Practice Champions -
members of the practice units who will devote time to facilitation for content generation


The Infosys KM strategy can be described under the following headings:

Existing Initiatives

1 The company maintains an organization-wide Body of Knowledge (BoK), which

enshrines experiential learning gained by past projects. Entries are contributed by
Infoscions, and a review mechanism screens their content, applicability and
presentation aspects. Each contributor must declare that the work is experiential,
and that it does not violate third-party IPR (Intellectual Property Rights) – in case

the IPR belongs to a third party such as the customer, clearance from that party
must be obtained. This system is available on the intranet, via an easy-to-use
interface that incorporates search utilities. Incentives for contribution exist, as do
mechanisms to publicize contributions periodically; prizes are given for
meritorious contributions. Several project- and PU (Practice Unit)-specific BoKs
also exist.

2 Since only a small proportion of employees will distill and write up their
experiences, "as-is" project deliverables must be captured too. Hence a "Process
Assets" system has been developed to capture these assets into an intranet-based
repository. As part of project closure, a Project Leader fills in a brief description
of the project, the target audience and others details while uploading into the
system. This helps in classification and focused search.

3 Given the knowledge-intensive nature of Infosys’ business, a key determinant of

success in the global marketplace is the ability to leverage the know-how,
innovation and reputation of the company as well as its employees. A clear
understanding of this ‘knowledge capital’ is hence essential, but cannot be
obtained via traditional financial statements represented by the balance sheet and
the income statement. Today's discerning investors look at both financial and non-
financial parameters in evaluating the long-term success of a company, as is
amply evident from the fact that companies that have spectacular market
valuations most often have only a fraction of those valuations captured by their
financial statements. As a company that is committed to the highest quality of
disclosure to its global investors, Infosys has adopted various models for
evaluating its intangible assets, and disclosing them in its financial reports. For
e.g. In the Annual Report for fiscal 1998, Infosys has published data on some of
its internal and external assets in the form of a score sheet. The methodology used
was based on Dr. Karl-Erik Sveiby’s Intangible Assets Monitor framework
[Sveiby 1997]. The company believes that such a representation of its knowledge

assets would provide a tool to its investors for evaluating the market-worthiness
of the company.

4 A Knowledge Directory providing pointers to expertise available within the

organization has been developed and deployed. It is called the People-Knowledge
Map (PKM). It provides an intranet-based interface via which people can register
or locate expertise. The system is designed to be driven off a proprietary
knowledge hierarchy that the company has created, which consists of a multi-
level taxonomy of topics that represent knowledge in the Infosys context. The
hierarchy consists of about 800 nodes, with the top level being technology,
process, project management, application domain and culture and deeper levels
representing a finer grain of topics.

5 The company-wide intranet, christened Sparsh, acts as a central information

portal. The intranet consists of about 5000 nodes, spread throughout the various
India-based development centers (DCs) and the US-based marketing offices.
Official policies and documentation, press releases and articles, and web-based in-
house information systems are available from the home page. Sparsh has a
knowledge shop that provides access to several of the intranet-based knowledge
systems. It also links project, PU, department and personal web pages. Access is
governed by IPR guidelines. Security and protection from external intrusion are
provided by means of firewalls.

6 The company’s e-mailing system, which every Infoscion has access to, supports
bulletin boards for official announcements as well as technical and personal
queries. An e-mail protocol has been defined and is adhered to.

7 A web-based virtual classroom has been developed and deployed on the intranet,
and allows access to various courses whose content has also been developed
internally. This system incorporates a discussion forum where participants can
post and respond to course-related queries. In addition, several online tutorials

have also been purchased and deployed over the intranet. Systems for supporting
training management – course announcements, nomination and reporting - and
participant evaluation have also been internally developed and are in use.

8 Practices that have worked are also propagated through regular seminars and best-
practice sessions, held both within units and organization-wide.

9 A few other such systems also exist. One such system is Odyssey, a system that
provides an umbrella for websites maintained by individual projects and a
marketing intranet, which provides information and reusable artifacts useful at the
sales and project initiation stage.


Infosys Knowledge Management Service offering is designed to assist clients in:

1 Formulating a “knowledge strategy” for sustaining the knowledge creation and

reuse in the organization
2 Aligning the knowledge strategy towards business goals and priorities to
maximize value creation

3 Designing a collaborative process-framework, to organize, capture and share
4 Designing content taxonomy and technical architecture for the knowledge
management program
5 Developing and deploying the appropriate technology tools for organization wide
implementation of the program
6 Instituting a “balanced - scorecard” based system for continually measuring the
strategic impact of knowledge management efforts


The Infosys KM effort has come out of infancy, but is hardly past adolescence.
Major inroads are being made on the "hard" front of putting systems in place. However,
there is still a long way to go on the "soft" front - that of ensuring large-scale awareness
and usage of the systems by all quarters within the organization for business leverage. An
important objective for the future includes giving the customer direct benefit from the
KM effort - plans to make this happen include an extranet that will expose internal
knowledge, suitably screened for Intellectual Property Rights issues, to select Infosys

The criticality of Knowledge Management will increase in the future, given the
current revenue and people growth rates, geographical expansion, diversification into
new markets and more sophisticated services.


Knowledge Management (KM) at Infosys has truly come a long way from the
time when employees only shared information through Body of Knowledge documents.
Infosys strongly believes that having a culture of knowledge sharing and reuse is more
critical than building a technology infrastructure. Infosys has therefore embarked on a

number of initiatives aimed at taking the prevailing knowledge sharing culture to even
greater heights. Demonstrating the business value of knowledge re-use and creating a
system demand for knowledge sharing / re-use are other means designed to accelerate
this culture-change. Today Infosys has a comprehensive Knowledge Management
infrastructure complete with a dedicated team, a fully functional technical infrastructure
and, most importantly, increasing awareness of the criticality of knowledge sharing
amongst all employees.

Infosys envisions itself as a knowledge organization:

1 Where every action is fully enabled by the power of knowledge;

2 Which truly believes in leveraging knowledge for innovation;
3 Where every employee is empowered by the knowledge of every other
4 Which is a globally respected knowledge leader.

The Infosys Approach focuses on linking knowledge management to overall

business strategy and is holistic in character; it addresses people and processes, with
technology tools playing the role of key enablers.

Any new effort needs top management push in the early stages and the full
cooperation of the top executives of the company is of utmost importance. The top
management of Infosys ably supported its KM initiatives, which is making it a success, as
the top brass was quiet early in recognizing that Knowledge is the currency of the new
millennium, and Knowledge Management is a key survival imperative.

Intellectual capital, or employee knowledge and experience, is a vital corporate

asset. KM seeks to best use that asset through knowledge sharing and documentation. If
KM is going to continue, either consciously or subconsciously, it's crucial to address the
larger issue of KM. According to Davenport, co-author of Working Knowledge: How

Organizations Manage What They Know, "Organizational and behavioral change is the
hardest part of implementing anything," he says. "Buying software is the easiest part."


All businesses must react effectively to the need to maximize profits, make
operations more efficient, reduce costs, and generally change to meet market needs and
beat the competition. Whilst these core business goals are apparent to all companies,
many fail to address them in a systematic manner and few pauses to think about
designing business processes to best approach them.

The mindset of most companies is 'serial', conditioned by the 'problem - action -

result' sequence. This has given rise to the Business Process Re-engineering, or BPR,
industry that has boomed over the last decade. Sadly BPR has often been used to disguise
a relatively straightforward and occasionally unwarranted downsizing of organizations
for short term Profit &Loss benefit. The longer-term effects have frequently led to
problems for the re-engineered organization.

What is the reason for this? The chief reason is that re-engineering rarely creates a
source of competitive advantage, rather it 'sweats' cost, sells off non-performing
businesses, and worst of all, removes a core base of knowledge. This knowledge base is
now being recognized as an intrinsic source of competitive advantage and a means to
reacting quickly to fast moving change.

A fundamental issue is communication within an organization, between Directors

and Executive Management, within operational management, and to the customers of the
organization. This lack of an embedded knowledge base and effective communications
reveals a complete absence of knowledge management that leaves the organization
unable to respond to changing competitive pressures and customer needs.

The mindset of all leading companies must become anticipative - not reactive.
Anticipation depends on a fundamental understanding of customers, and their existing
and potential needs. This can only be achieved by an intensive information gathering
process that can be greatly enhanced by technology.

Fundamentally, knowledge management is about generating and recording a clear
understanding of business fundamentals, processes, and customers. This process itself is
enabled by technology and should be considered an ongoing commitment. Knowledge
management is the means to creating a true understanding of the way a business operates
and allows companies to test different operational alternatives before putting the
optimum process into operation.

The matrix of processes, systems, strategies, and people is endlessly complex but
nonetheless holds the key to delivering the core business goals of revenue and profit
generation, competitiveness, and growth. Knowledge management can help organizations
to unravel the mysteries of the way their business functions and hence anticipate and
address the ever-changing business environment.
Hence, there is scarcely any dissent about it: Knowledge is the currency of
the millennium, and knowledge management is a key survival imperative. Hence
organisations from all sectors should adopt KM measures with a view to increase
their competency, be more agile and be in a better position to respond to changes.
Knowledge Management is the Holy Grail of the modern company and is a
‘mission critical’ for all managers of today and tomorrow.



1 The Knowledge Management Yearbook 2000-01

- James H. Cortada, John A. Woods.
2 Managing Knowledge Workers
- Horibe, Frances.
3 Working Knowledge
- Thomas H. Davenport, Laurence Prusak.