KNOWLEDGE MANAGEMENT | MM5013

FINAL REPORT
CORPORATE KNOWLEDGE MANAGEMENT FOR INNOVATION
Jun Kyu Hwang | 29316702
Miftahul Ahyar Arrifai | 29316095
Muhammad Fiqri Rihyawan | 29316056
Rosi Ab Rantung | 29316027
GENERAL MANAGEMENT 3
 TABLE OF CONTENT

Table of Content....................................................................................................................... 2
Chapter I: Introduction ........................................................................................................... 3
Firms Background .................................................................................................................. 3
Knowledge Management and Innovation .............................................................................. 4
Chapter II: The Maps of Existing Knowledge ...................................................................... 5
Firms Existing Knowledge ................................................................................................... 5
Types of Knowledge Involved ............................................................................................... 7
How the Knowledge is Organized ......................................................................................... 9
Chapter III: The Proposed Innovation ................................................................................ 11
JP-OMNIA ........................................................................................................................... 11
Business Model Canvas for JP-OMNIA .............................................................................. 12
JP-MONETA ........................................................................................................................ 12
Tax Benefits ......................................................................................................................... 13
Business Model Canvas for JP-MONETA........................................................................... 15
Chapter IV: The Map of Required Knowledge for The Innovation ................................. 17
Chapter V: Implementation Plan ......................................................................................... 21
Identifying the Business Problem ........................................................................................ 21
Preparing for Change ........................................................................................................... 21
Creating the Team ................................................................................................................ 22
Performing the Knowledge Audit ........................................................................................ 23
Defining Key Features ......................................................................................................... 26
Building Blocks for Knowledge Management ........................................................................ 27

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 CHAPTER I

INTRODUCTION

A. Firms Background

Founded in 27 September 1993, PT Asuransi Jasa Raharja Putera or JP Insurance is one of

subsidiary company from Jasa Raharja in a relatively short course of time has evolved to
become one of the prominent insurance companies in Indonesia by gaining peoples trust.
Therefore, the company is committed to do its best in maintaining peoples trust, among others
by continuously upgrading its service to better suit costumers needs.

JP Insurances commitment is maintaining its reputation as a trustworthy insurance

company has earned it a rating idA+ through its various quality product and insurance services,
JP Insurance is able to book an encouraging financial performance which shows an inclining
trend from year to year. The company believe that such achievement is made possible through
the implementation of good corporate governance in virtually all operational aspects, supported
by the deeply rooted corporate culture, namely honesty, discipline, responsiveness,
thoroughness and politeness.

To be the To provide
Foremost Appropiate
Insurance Products with
Company in Excellent
Indonesia Service

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 The aforementioned achievements cultivated a strong confidence in each personnel of
JP-Insurance together with the employee, the management of the company is assured that the
company can achieve more in future and realizing the companys vision to become the leading
insurance company in Indonesia

To date, JP-Insurance services can be accessed throughout the country through its 27
branch offices and 87 marketing office. JP-Insurance provide a various solution needs, such as
general insurance and surety bonds.

B. Knowledge Management and Innovation

Observing the current proses and product in JP-Insurance, we would like to recognize the
importance of knowledge as a means to gain or sustain competitive advantage for raising new
innovation proses into company. We have concluded that the only thing that is sustainable, for
successful businesses. The awareness of the value of knowledge to a business, coupled with its
management, acts as an integrator that improves cross-functional communication and
cooperation. Shared knowledge not only makes for a more effective, efficient and agile
organization, but creates a common perspective and culture that produces a natural consistency
of successful decisions and actions.
Steps and methodologies are implemented into making this report to make sure that all
data that we gather is more accurate. Identify the existing knowledge in this company, compare
and analyse the knowledge that has implemented, identify the business canvas to analyse the
flow process of business, figure out the key source of the knowledge, and how the existing
knowledge organised by company, those all steps lead to final decision before we decide what
kind of innovation and how its organised that we would like to proposed into JP-Insurance in
order to achieve the vision and mission of company.

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 CHAPTER II
THE MAPS OF EXISTING KNOWLEDGE

A. Firms Existing Knowledge

PT Jasaraharja Putera Insurance (JP-INSURANCE) provide a solution for the needs of
insurance services and surety bond (Suiretyship) which is packaged as JP-BONDING.
JP-INSURANCE in the Indonesian insurance industry, known as the pioneer of Surety
Bond. Surety Bond itself is a financial product to support the continuity of some certain project
runs by project manager or contractor. JP-INSURANCE also have several excellent products,
such as:
JP-ASTOR can guarantee the risks of damage and / or loss from the
vehicle itself, vehicle accesories, liability to third parties (if your
vehicle hits another party). Accident Risk on passengers, drivers or
Legal Responsibility to passengers.

JP-BONDING provides assurance of risk protection that can occur in

preparation, execution, and completion of the project so that it runs
in accordance with the plans and expectations. PT. JASARAHARJA
PUTERA as the pioneer of Surety Bond in Indonesia.

JP-ASPRI you can provide 24-hour non-stop protection for your

family, your colleagues and your employees from the risk of
accidents that can happen when and wherever they may be

Building is a valuable asset for every inhabitant, but so vulnerable to

a building if there is no protection, because the risk can occur at any
time. JP-GRAHA protects your building assets and their contents
from residential, shop, apartment, factory, and other assets.

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 This insurance product provides protection against trading
transaction losses experienced by producers, distributors, sub-
distributors, agents due to outstanding amounts of borrowers
(buyers), due to Protracted Default and Insolvency.

When the occurrence of a damage or loss of the insured goods must necessarily go
through a certain process to be able to get compensation. The mechanism of the
indemnification/restitution in PT Jasa Raharja Putera / JP INSURANCE is:
1. In case of loss experienced by the insured, then they must report to JP INSURANCE
2. JP INSURANCE will respond by conducting a survey on the spot
3. The insured performs the administrative process of the duties and completes the files
4. If the cause of the loss is not guaranteed then JP INSURANCE will issue a Claim Rejection
Letter. However, if the letter accepted, then an agreement of the settlement process will be
done
In order to obtain such damages before going through a process or mechanism of
compensation, the files relating to the indemnification/restitution shall be completed first.
Completeness of claims file in indemnification/restitution which in general the mechanism is
as follows:
1. Insured as soon as possible to report / submit a written statement about the losses incurred
by not changing / damaging objects that suffered losses.
2. Submission of claims for goods or motor vehicles shall be made by filling out the Claim
Form or written statement (letter / fax) by enclosing:
a. Copy Policy
b. Copy of driver's license and vehicle registration (for vehicle replacement)
c. Letters of damages
d. Certificate of incident
e. Estimated losses
f. A letter from the police
g. Other supporting documents required
h. For compensation against passengers must meet the following conditions:
1) Fill out the Personal Accident Insurance Claim Report (LK1)
2) Attach a medical treatment receipt.
3) Attach the death certificate, copy of Family Card and ID card specifically to pass
away.
4) For permanent disability victims equipped with the latest health report from the
doctor.
5) Other supporting documents required
When one of the terms and files cannot be fulfilled and completed, the
indemnification/restitution cannot be obtained. When the file can be completed and conditions

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can be met does not rule out the possibility of a problem. Because there has been a mismatch
of data provided with the actual. This may be due to deliberate or negligence factors.
Insurance benefits:
1. Provide a sense of security
2. Have savings when needed
Payment system:
The premium system, the premium is the payment made by the customer to the insurer to obtain
the risk transfer service. The size of the premium is determined by the customer itself which in
turn will also determine the amount of service received.
Payment method:
1. Direct The customer will get a risk-shifting service after the premium payment to the
insurer has been paid off.
2. Instalments Customers can get the risk transfer service by instalment so customers do not
have to pay in full but gradually on a regular basis.
Types of insurance rates:
1. Manual (Class rate) Premium rates apply to all similar risks.
2. Merit The way of determining the premium rate is calculated by looking at the risk
conditions. Generally, this insurance is selected for fire insurance. And the insured goods
can be divided by 2 i.e. goods selected and not selected.

B. Types of Knowledge Involved

The knowledge that has been used in PT Jasa Raharja Putera Insurance/JP-
INSURANCE are mostly explicit knowledge. Explicit knowledge is technical or information

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that is described in formal language, like manuals, mathematical expressions, copyright and
patents. Explicit knowledge is a knowledge that has been codied or documented into a format
that can be distributed to others or transformed into a process or strategy without requiring
interpersonal interaction. Explicit knowledge can be a policies, procedural guides, reports,
products, strategies, goals, mission, and core competencies of the organization and also can be
the IT infrastructure.
As we know, that most of the knowledge shared by this company to its customer is by
using written guide or instruction, either to fulfil the requirements in acquiring the insurance
premiums or to claim the insurance premiums.
C. Sources of Knowledge
A factor that serves as a role model of knowledge management activities in the company.
Following is the source of knowledge for knowledge management at PT Jasa Raharja Putera /
JP-INSURANCE.
Phase in The Generic Sources of KM Tools/ Activities
Innovation Routines Knowledge
Process
Discovery Search R&D division & Scanning, data available
Marketing division (repository), search engine,
data mining
Capture internal Workshop, meeting, discussion
Articulate Internal, external Statistic tools
(statistician,
actuary)
Realization Contextualize Internal. Designing the product
Apply Internal (insurance Marketing (promotion, sales &
agent) customer relationship)
Nurture Evaluate Internal (internal Procedure audit & Cost audit
auditor)
Support Internal (marketing marketing team propose new
& higher reengineered product of
management) insurance
External (investor)
Re-innovate Internal Re-innovate the existing
product
(can be back from searching
phase)

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D. How the Knowledge is Organized
Lkujiro Nonaka and Hirakata Takeuvchi (1995), assume that knowledge is a dynamic thing
and can change form between Tacit and Explicit. They then propose a model in the process of
knowledge creation, which then allows the organization to manage the process effectively.
They propose four steps of knowledge creation called SECI model or Socialization,
Externalization, Combination, and Internalization.

Tacit Tacit

Explicit
Tacit

SOCIALIZATION EXTERNALIZATION

Explicit
Tacit

INTERNALIZATION COMBINATION

Explicit Explicit

1) Socialization
Transfer knowledge from one individual to another in the form of tacit knowledge. Mentioned
that Socialization emerged from the activity of "sharing and creating tacit knowledge through
direct experience". Socialization in JP-INSURANCE is the way that all the employee giving
some required knowledge to the other and also to the customer itself to make the customer
know the way insurance works through direct experience.

2) Externalization
Transformation of knowledge from Tacit form into Explicit form. With externalization, tacit
knowledge in the individual is expelled and formulated into other media that can be easily
learned by other individuals. The externalization process in JP-INSURANCE is the way that
the company gives a written instruction to the customer on how to claim or acquire the
insurance premium offered by the company. This will create an easier process in direct order
to prevent clustered claims proses and insurance purchases that confuse the customers.

3) Combination:
Organize a collection of Explicit knowledge into a more systematic form of media, through the
process of adding new knowledge, combinations and categorizations of knowledge that have
been accumulated.

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4) Internalization
Transforms knowledge from Explicit form to Tacit form. For example, with the learning
process which is then followed by 'learning by doing' which gradually form new knowledge in
the individual. The way JP-INSURANCE implemented this process is through a training inside
the company to expand the employees knowledge to be able to get better at work.

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 CHAPTER III

THE PROPOSED INNOVATION

We proposed 2 new products for JP-Insurance. First JP Omnia, a customized and flexible
insurance contracts combining life insurance, health insurance, auto & home insurance to reach
low-income customers. Second product we purposed is JP Moneta, an insurance to reduce
currency swing risk for export and import activities.

A. JP Omnia

An important question most health experts have tried to address in discussing healthcare
services delivery in Indonesia has been: what really determines the overall insurance services
condition of the Indonesia population, one obvious possible answer is comprehensive insurance
services, that covers all risk that might arise in life. A risk management for life is one of the
most important basic needs of mankind and is indispensable in social and economic
development of a nation.

The Indonesian government had recognized the need good insurance for transportation
accident insurance services for the nation and have been purchasing the objective of this type
of insurance delivery since 1960. Although the nation's health insurance such as BPJS exist, it
did not cover all the risk in life.

JP Omnia offer this scheme to give people some flexibility around how they want to be
rewarded for their contribution. The aim of the scheme is to enable you to shape your rewards
to suit your personal circumstances each year or each month. Customers can use JP Omnia
scheme in website to arrange their benefits package by choosing the services that are most
relevant for them. Once the customer input their personalized coverings, JP Insurance will
calculate several schemes to meet the costumers income.

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B. Business Model Canvas For JP-OMNIA

Value Customer Customer

Key Partners Key Activities
Proposition Relationship Segments
Government Risk Assessing Flexible & Partner for life Mass
(regulator) Research and Customized Personal Market
Customer development Overall for assistance Middle
Agent Customer general risks income
Broker maintenance in life Business-to-
Financial Key Resources Channel business
institutions Existing Agent
customers Website
Customers Marketing
risk awareness channel
Human
Resources:
Existing
knowledge
Willingness to
learn

C. JP-MONETA

There are a whole range of choices when it comes to hedging risk. A trading company can try
to reduce or eliminate risk through their investment and financing choices, through insurance
or by using derivatives. Not all choices are feasible or economical with all risks and it is
worthwhile making an inventory of the available choices with each one. The risk associated
with nationalization cannot be managed using derivatives and can be only partially insured
against; the insurance may cover the cost of the fixed assets appropriated but not against the
lost earnings from these assets. In contrast, exchange rate risk can be hedged in most markets
with relative ease using market-traded derivatives contracts.

Another decision making involves to set an assessment of how well this company deal
with different risk exposures. An international trading company may suffer uncertainty if any

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large amplitude of currency swing happens, thus can hinder this company financial
manoeuvrability.

Assume now that you have a list of all of the risks that you are exposed to, categorizes
these risks and measured your exposure to each one. A fundamental and key question that you
have to answer is which of these risks you want to hedge against and which you want to either
pass through to your investors or exploit. To make thus judgment, you have to consider the
potential costs and benefits of hedging; in effect, you hedge those risks where the benefits of
hedging exceed the costs.

According to Damodaran, there are several reasons why firms may choose to hedge
risks, and they can be broadly categorized into five groups. First, the tax laws may benefit those
who hedge risk. Second, hedging against catastrophic or extreme risk may reduce the likelihood
and the costs of distress, especially for smaller businesses. Third, hedging against risks may
reduce the under-investment problem prevalent in many firms as a result of risk averse
managers and restricted capital markets. Fourth, minimizing the exposure to some types of risk
may provide firms with more freedom to fine tune their capital structure. Finally, investors may
find the financial statements of firms that do hedge against extraneous or unrelated risks to be
more informative than firms that do not.

D. Tax Benefits

A firm that hedges against risk may receive tax benefits for doing so, relative to an otherwise
similar firm that does not hedge against risk. As we noted in chapter 9, there are two sources
for these tax benefits. One flows from the smoothing of earnings that is a consequence of
effective risk hedging; with risk hedging, earnings will be lower than they would have been
without hedging, during periods where the risk does not manifest itself and higher in periods
where there is risk exposure. To the extent that the income at higher levels gets taxed at higher
rates, there will be tax savings over time to a firm with more level earnings. Surveys
consistently indicate that the most widely hedged risk at U.S. firms remains currency risk.
There are three simple reasons for this phenomenon.

1) It is ubiquitous: It is not just large multi-national firms that are exposed to exchange rate
risk. Even small firms that derive almost all of their revenues domestically are often
dependent upon inputs that come from foreign markets and are thus exposed to exchange
rate risk.

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2) It affects earnings: Accounting conventions also force firms to reflect the effects of
exchange rate movements on earnings in the periods in which they occur. Thus, the
earnings per share of firms that do not hedge exchange rate risk will be more volatile than
firms that do. As a consequence, firms are much more aware of the effects of the exchange
rate risk, which may provide a motivation for managing it.
3) It is easy to hedge: Exchange rate risk can be managed both easily and cheaply. Firms can
use an array of market-traded instruments including options and futures contracts to reduce
or even eliminate the effects of exchange rate risk.

Merck in 1990, identify this hedging currency risk. They rationalized the hedging of
currency risk by noting that the earnings variability induced by exchange rate movements could
affect Mercks capacity to pay dividends and continue to invest in R&D, because markets
would not be able to differentiate between earnings drops that could be attributed to the
managers of the firm and those that were the result of currency risk. A drop in earnings caused
entirely by an adverse exchange rate movement, could cause the stock price to drop, making it
difficult to raise fresh capital to cover needs. So, we can conclude that one of the primary
challenges in the issuance of foreign currency policies is how to minimise foreign exchange
risk exposure.

JP Moneta offers the issuance of foreign currency policies can benefit both the issuer
and the policyholder. For both the issuer and the policyholder, the currency exposure of the
foreign currency (typically US dollar, euro, Australian dollar) is generally considered more
stable than local currencies. For the issuer, the funds can then be invested in markets that are
generally more stable and with more developed capital markets without having an underlying
currency exposure. For the policyholder, they may have plans to retire overseas or send their
children to school overseas. So, foreign currency policies can help match these long-term
exposures.

In Taiwan, for example, local regulations require premium payments be made in the
same foreign currency as the policy, effectively making the payment cross-border, thereby
increasing the cost of payment as fees and deductions can be incurred. In this case, JP Moneta
will create a unique solution to address this challenge. JP Insurance will team-up with partner
banks to offer foreign currency drafts in up to several currencies, providing policy purchasers
a wide range of locations to obtain foreign currency payments. Through a specialized setup,
policy purchasers send the drafts to JP Insurance and the drafts can be cleared much more

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quickly and less expensively than other methods of foreign currency collections. The result is
a convenient and cost-effective solution for the policy purchaser to make the premium payment
in the foreign currency.

If a country where cheques are the predominant payment method such as in Singapore,
collections result in two challenges. First, at what rate to apply to calculate the amount of
Singapore dollar owed and, second, how to handle the cheque collections and returns. JP
Moneta will create a solution by providing a sheet rate at the beginning of the day. The
insurance companys agents can easily calculate the amount of Singapore dollars required and
the foreign exchange volatility risk is offloaded to JP Insurance. The cheques are collected and
converted right away to the foreign currency, usually US dollars, using the sheet rate. Returned
cheques are processed when returned and funds are converted back to Singapore dollar.

E. Business model canvas for JP Moneta

Value Customer Customer

Key Partners Key Activities
Proposition Relationship Segments
Government Risk Assessing A certain Financial Business-
(regulator) Trading profit in advisory to-business
Customer analysis uncertainty Business-
Agent Customer world to-business-
Broker maintenance to-
Financial Key Resources Channel consumer
institutions Existing Agent
customers Website
Customers risk Marketing
awareness channel
Human
Resources:
Existing
knowledge
Willingness to
learn

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This two of proposed innovation can be categorized as this graphic below

JP Omnia JP Moneta
Competence-Enhancing Vs.
Product Vs. Process Incremental Vs. Radical Competence-Destroying
Innovation
Obviously both of proposed This is an incremental yet JP Insurance existing
innovation is a product also a radical innovation. knowledge and networks are
innovation since its offers Since, based upon existing very useful to implement
new product to create new knowledge and resources these two innovations.
business revenues. but also requires new
capabilities

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 CHAPTER IV

THE MAP OF REQUIRED KNOWLEDGE FOR THE INNOVATION

According to Fetterhoff & Vlkel (2006), JP Insurance can sketch the innovation process and
support in form of:

Seeking opportunities. The pace of change in the global economy today is truly staggering.
Change is bringing new, emerging risk types, offering new opportunities for the insurance
industry. At the same time, the industry has seen an influx of non-traditional capital as well
as new enabling data, technology, and analytics capabilities. Taken together, favourable
developments in all three strands of the marketdemand driven by new risks, supply from
new capital, and empowering data and analyticsmake the outlook for the coming decade
very bright.
Evaluating their market potential inventiveness. With the increasing competition in the
market the development of insurance companies is possible through a realization of
measures aimed at boosting investment activities and determining their strategic directions.
In the process of development and selection of investment strategies it is necessary to take
into account the level of internal investment resources of insurance companies as well as
changes in external conditions of their functioning, which can cause the need to adjust the
set goals and objectives.
Recruiting potential development partners. Business-to-business-to-consumer (B2B2C)
distribution is not new to insurance. Insurance channel such is partnership has been a
successful model for many years, and other non-insurance players already distribute
insurance in many markets. However, this trend will accelerate in the near future, driven in
particular by improved customer access from digital players, and by technological advances
that make it much easier to fit insurance into partners ecosystems. This will mean a much
larger B2B2C insurance market the race is on to become the leading digital B2B2C
insurance partnership.
Capturing value through commercialization. With the insurance industry facing ongoing
consolidation, combined with increasing commoditization of core products, there is
increasing emphasis on developing new products that innovatively meet customers'
evolving and diverse financial needs. Insurance companies are facing challenges in this
environment, in terms of developing and bringing new products to market in a quick and

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 effective manner. These challenges put increasing emphasis on developing integrated
financial services capabilities and on the separation of manufacturing and distribution
organizations. Product development and commercialization challenges escalate as it relates
to moving products from distinct manufacturing organizations into integrated distribution
channels.
Extending the innovation offering. A variety of breakthrough technologies are set to spur a
fundamental transformation of the insurance industry. Cloud computing, the Internet of
Things (IoT), advanced analytics, telematics, the global positioning system (GPS), mobile
phones, digital platforms, drones, blockchain, smart contracts, and artificial intelligence
(AI) are providing new ways to measure, control, and price risk, engage with customers,
reduce cost, improve efficiency, and expand insurability. These technologies are also
enabling the creation of new insurance products, services, and business models. And while
emerging technology provides opportunities for traditional insurers to modernize and
reinvent themselves, it also forces them to respond to new sources of competition from
increasingly well-funded and nimble software-based companies that are beginning to make
inroads in the market by focusing on unmet consumer demand, bringing down cost, and
providing new services.
As for the KM tools and instruments, JP Insurance can be adopted from Hidalgo & Albors
(2008):

Knowledge audits. Insurance companies today face increased regulation, a hyper-

competitive market, rapid technological innovation, and widespread consolidation.
Companies must be vigilant and flexible about finding new ways to manage margins and
preserve capital by implementing sound decision processes and risk mitigation
strategies while leveraging their vast data assets to make informed business decisions
Knowledge mapping. Knowledge mapping is a tool for divining the complex needs and
inter relationships of multiple audiences in an organization. The process gets groups with
various backgrounds and contexts communicating about commonalties and structures that
facilitate an improved organizational information metabolism. Mapping should be an
ongoing process since knowledge landscapes are continually shifting and evolving. The
process of mapping can help create a common vision and common viewpoint on challenges
inherent in managing intranets and making the information they contain more timely and
useful.

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 Document management. JP Insurance deals with real-time access to client documentation
when operating many locations. Document management solutions can help the
organization to provide high-quality customer service while lowering operation expenses
by enabling authorized users to access client support materials instantly regardless of
department or location. JP Insurance might be processes hundreds, if not thousands, of
physical paper documents each day, including client applications, policies, endorsements,
declarations, cancellations and reinstatements, claims, and financials. Thus, it is very
important of an easy-to-use, yet powerful document management system that helps to
access, manage, and share those documents with clients, carriers, and claims processing
organizations
Market intelligence/Business intelligence techniques. A major change in how businesses
are using data in the past number of years, is the incorporation of data generated outside
their own organisation. The use of third party data such as market, economic,
environmental or demographic data has demonstrated an ability to provide all important
context to their own results. At a more strategic level, businesses have been challenged to
understand their position and performance in the context of the market. In the fast-paced
world of insurance, being correctly positioned with the right information at the right time
has always been the key.
Technology watch/technology search. The insurance industry, like many other industries,
is facing sweeping changes driven by a confluence of business and technology forces
fuelled by innovation. Insurance companies understand they likely need to become more
customer-focused, easier to do business with, nimbler, and increasingly knowledge-rich.
The interconnectivity between insurance technology and consumers lives is increasing
rapidly and insurers' insatiable desire for more data to make better decisions and to reflect
risk accurately while simultaneously driving costs down never ends.
CRM (Customer Relationship Management). JP Insurance certainly face a daunting
challenge in maintaining and increasing their competitive edge. But by focusing on three
key imperativesgaining a unified enterprise view of customers, retaining customers with
great service and controlling costs while expandingJP Insurance can turn challenges into
strategic competitive advantage and enhance their long-term viability and profitability.

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On implementing these two-product innovation, JP Insurance can be used such cooperative and
networking tools:
Groupware. Groupware refers to programs that help people work together collectively
while located remotely from each other. Programs that enable real time collaboration are
called synchronous groupware. Groupware services can include the sharing of calendars,
collective writing, e-mail handling, shared database access, electronic meetings with each
person able to see and display information to others, and other activities.
Team-building. The most successful, memorable team-building events are ones that dont
feel like a day at the office. Activities that overtly aim to draw in leadership lessons or
practical takeaways are less powerful. Spending time together, sharing an experience or
working towards a common goal allows bonding to happen more organically and far more
effectively.
Supply chain management. JP Insurance can use of modern supply change management
techniques to manage and improve their supply chain process. A single supply chain
management function enables standardized supply chain management practices across the
entire supply chain process and promotes optimal supply chain outcomes. Our suggestion
that JP Insurance should seriously consider including supply chain management in their
claims operational reviews, recognizing that supply chain management presents not only
an opportunity for significant gains in efficiency, process improvement, and cost-reduction
Benchmarking. Most established companies in the insurance industry have been slow to
adopt digital tools and business models, relative to other industries, such as retail, media,
travel and retail banking. Meanwhile, a growing number of tech-oriented start-ups and
young firms continue to chip away at insurance markets. Therefore, JP Insurance will have
to stage their preparation for different levels of demand in different circumstances.
Business simulation. JP is required to put together business plans and budgets and set up
contingency plans to deal with adverse risk development. JP Insurance have to put a
business case to investors to raise or repay capital and demonstrate why their business plan
requires this level of shareholder investment. This simulation has proved over the years to
be engaging and highly effective in communicating the economics of the insurance industry
to a wide variety of audiences

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 CHAPTER V

IMPLEMENTATION PLAN

A. Step 1: Identifying the Business Problem

Successful implementation of knowledge management requires a clear identification of the

business problem to be solved and an alignment of the knowledge management project with
overall business objectives. Every insurance employees charged with implementing a
knowledge management system almost always face an initial problems or challenges. Consider
the quantity and diversity of information recorded in corporate databases, available on the
Internet, and stored in JP Insurance employee knowledge repository towards JP Insurance as a
global corporation. Transforming that information into something valuablesomething that
employees can access anytime from anywhere and apply to their jobsseems daunting.

This fear is typically grounded in an attitude that knowledge management is an all or

nothing proposition. However, knowledge management is a set of business practices and
technology implementation that are applied over time to help companies better manage their
intellectual capital knowledge management is not an end in itself. The building blocks for
enterprise knowledge management are already familiar to most organizations in the form of
basic information access applications. These applications take a well-defined set of
information, such as material safety data sheets or technical documentation, and create an
organized repository that enables users to access and search the specific content.
Implementation is usually direct, quick, inexpensive, and a good first step toward enterprise
knowledge management.

Another reason for focusing knowledge management efforts on a set of clear objectives
is that most successful knowledge management projects start small and are tested thoroughly.
The ideal is to test the process and cultural changesnot merely the softwareon a small scale
and then refine and apply the techniques to other business problems across the organization.

B. Step 2: Preparing for Change

Knowledge management is more than just an application of technology. It involves cultural

changes in the way employees perceive the knowledge they develop. A successful

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implementation of knowledge management also requires endorsement from corporate
management. Only a fraction of the corporate changes required for successful knowledge
management are technical. A common problem for those undertaking a knowledge
management project is placing technology ahead of the ability or the desire of people to use it.

One common cultural hurdle to increasing the sharing of knowledge is that companies
primarily reward individual performance. Creating a collaborative culture may require
redesigning organizational values and implementing incentives to encourage participation in
meeting organizational goals. Leaders need to preach the gospel of sharing information.
Managers need to rate performance based on employees cooperative efforts. Rewards, whether
theyre key chains, peer esteem, or promotions, need to recognize knowledge sharing.

Cultural changes of this magnitude take time. Organizations have to expect that
contributions to a knowledge management project and maintenance of a knowledge
management system, are an investment in corporate learning and ultimately in corporate
efficiency. Employees with time for knowledge management also need coaching and help.
Once people are ready to try knowledge management, the corporation needs to support them
with technical tools and coaching. Given the changes to corporate culture, behaviour, and
processes that usually characterize knowledge management, corporate leaders have to be
committed to the effort.

C. Step 3: Creating the Team

A well-staffed team with a strong team leader and cross departmental expertise is essential
for successful implementation of knowledge management. Once a problem is selected and the
business objective of implementing knowledge management is clear, organizations can
determine what kinds of knowledge employees need in order to solve the problem. Questions
such as Who in the company has that knowledge?, How do they work with it?, Who else
needs it? and How might I categorize it so that people who need it can easily find it? need
to be answered. Fortunately, there are professionals in most organizations who are already
experts at asking and answering these questions.

Building and launching a knowledge management system requires a broad range of

expertise in a focused core team. All members of the knowledge management team are united
by the projects targeted problems and corporate objectives, but each members skills and

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experiences should be diverse. As previously stated, executive buy-in is a critical factor to
successful implementation of knowledge management. An additional key to successful
implementation of knowledge management project is a strong team leader. Knowledge
management projects encompass a wide range of content and cross organizational boundaries.
Therefore, a knowledge management team leader requires not only project management skills,
but a broad knowledge of the organization and excellent people skills. Since knowledge
management practices cannot be imposed on employees, the team leader should ideally have
skills and experience in change management.

Also, essential to the team are individuals familiar with the business problem to be
solved, including the content and processes involved. The knowledge management technology
should be designed at the start for supporting the character of the knowledge work itself.
Members of IT team are also essential to a knowledge management team. They understand
existing systems and will customize the knowledge management technical infrastructure.
Knowledge management teams require guidance in organizing content. These kinds of skills
are best provided by employees with library science backgrounds. Corporate librarians are
experts at categorizing information. They are knowledgeable about the content and relevance
of existing information sources and can help filter informationespecially from external
sources like third-party researchers and electronic databasesto prevent information overload.

D. Step 4: Performing the Knowledge Audit

The knowledge audit identifies sources of knowledge required to solve the business problem.
It begins to organize knowledge by developing categories that reflect how your organization
operates. The knowledge audit does not have to be a long, complex project. It only needs to
answer a few key questions. A Knowledge Audit starts by working with employees to locate
the knowledge they need to solve the business problem identified in step 1. At this point, some
knowledge pundits propose a process that is long, detailed and tedious. In fact, a productive
knowledge audit need only concentrate on answering the following question: In order to solve
the targeted problem, what knowledge do I have, what knowledge is missing, who needs this
knowledge and how will they use the knowledge?

The audit begins by breaking that information into two categories: what knowledge
currently exists and what knowledge is missing. Once the location or source of the missing
information is identified, they can begin to structure the relevant information so that it can be

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easily found. At the conclusion of the knowledge audit, the knowledge management team has
the information necessary to design its knowledge management system on paper.

Identify Whats Missing

A common mistake is to limit the knowledge audit to merely cataloguing existing explicit
information assets, or the information that is documented, transferable and reproducible (e.g.
research reports and sales proposals). Certainly, knowledge management teams need to
determine what explicit resources currently exist and how they might be categorized for more
effective use, but they also must identify which additional resources may be missing, such-as
industry-specific news required for competitive analysis.

In addition to capturing explicit information assets, knowledge management systems

must be structured to capture tacit knowledge. Tacit knowledge is the hand-on skills and
experiences of individuals and it is most often the key to the effective solution of many critical
business problems. Examples of tacit knowledge include valuable information about a report
that the author knows, but has not documented. Tacit knowledge is typically found in the
answer to questions such as Why was this report written?, Where else can these results be
applied?, What was the outcome of this proposal? and Who else understands the reports
contents? The value of capturing tacit knowledge should not be underestimated.

There are two methods for increasing the transfer of tacit knowledge. One way is to
make tacit knowledge more accessible by capturing it as metadata data about an explicit
knowledge asset. Asking subject-matter experts what kinds of questions they most often ask
others in the process of doing their jobs is a way to identify what tacit knowledge will have the
most value by being made explicit. Another method for increasing the transfer of tacit
knowledge is to make it easier for individuals to identify and contact subject-matter experts.
Methods of identifying experts that are enhanced by the application of knowledge management
techniques include creating skills databases, online communities of practice, and searchable
repositories of resumes or skills profiles.

Organizing Knowledge

Knowledge maps present users with the big picture of an organizations intellectual capital.
They allow individuals to navigate a companys vast resources so they can quickly find relevant
information. There are many methods to organize knowledge, some more effective than others.
The most common, but often most ineffective way to map information in a corporate

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environment is to organize knowledge based on the physical systems where the information
resides. This goes beyond a file/directory metaphor to a higher level that shows databases, file
servers, document management systems, groupware systems and other knowledge silos, in
addition to the individual files contained in those systems. This classification scheme helps
workers find information quickly because it shows them exactly where the information they
need resides. However, it is of little use to those who are unfamiliar with or uninterested in
learning the information technology architecture of the organization.

For those who are unfamiliar with, or do not want to learn an organizations IT
architecture, a qualitative organization of knowledge assets is more useful than file directory
organization. Qualitative organization helps workers quickly find the information they are
looking for by allowing them to search for it by its topic instead of its location. The qualitative
methods appropriate for organizing corporate knowledge assets can be classified as process
oriented, functional or conceptual. Process classification uses a generalized model of how a
business functions from understanding customers and markets to managing people,
processes and resourcesand maps it to the knowledge contained in the organization.

In practice, the best system for helping end-users quickly find what they are looking for
depends on individual preferences, the information required and the clues with which they
begin the search. For example, a user may know he or she is looking for information from a
news feed and that its stored in a news feed server. In this case, the classification system that
helps the user find the desired information is physical, showing the location of the news feed
system in relation to other physical information systems.

However, if that person is looking for information about a particular customer, a

physical classification system offers little value because knowledge about that customer is
likely spread across many physical information systems. In this case, the best classification
system is a conceptual knowledge map that includes a customer category. Regardless of how
an organization chooses to organize its knowledge, knowledge maps help users contribute
knowledge to the system and search the system for knowledge. They characterize contributions
in a consistent manner and speed searches for knowledge assets by narrowing the search to a
category of knowledge, which can then be searched for keywords appearing either in document
text or in metadata. Content must be able to be categorized by multiple knowledge maps so
users can employ the organization scheme that applies the appropriate context for quickly
locating the information they are seeking.

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E. Step 5: Defining Key Features

Creating a checklist of required key features will ensure that knowledge management
technology you acquire will help solve your key business problems while enhancing your
overall IT infrastructure. Although individual knowledge management systems are as different
as each individual organization, they share many basic features. Such features, which typically
address system openness, measurability, customizability and security, guide IS as it decides
what products and technologies to buy or build internally.

Open and Distributed

Open systems ensure that employees can obtain the information they need from any location
at any time. Adherence to IT standards, enables organizations to implement new technologies
quickly and to easily extend and customize them in the future. Most knowledge management
projects will need to distribute components of their systems. Those components might be
distributed across servers at a single site to increase system speed, or the components could be
geographically distributed in global corporations. The ability of a knowledge management
system to handle such distribution is important as the company and its system grows.

Measurable

The most tangible measurements of a knowledge management system involve who contributes
or accesses which information. These measurements offer a guide to the value of the
information content and to the corporate population that uses the system. They are designed to
guide management in measuring the effectiveness of the system. They may also be useful in
implementing incentive or compensation policies designed to encourage the contribution of
knowledge to these systems. Another tangible measurement of a knowledge management
system involves bottlenecks of the distributed system. Bottlenecks result from inadequate
hardware and software. Those measurements assist IS to resolve the bottlenecks.

Customizable

A knowledge management system needs to reflect a companys unique products, processes,

and people. This requires customization of many aspects of the system, from knowledge maps
to metadata. Another aspect of customizability is the user interface. It needs to blend in with
the user interface of existing corporate systems, such as the organizations intranet.

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 Secure

Security has come a long way since corporate users first started navigating internal networks.
Security problems with knowledge management tend to be more cultural than technical;
organizations often need to question their assumptions about why information should not be
accessible to broader audiences than originally intended.

F. Step 6: Building Blocks for Knowledge Management

Implement knowledge management systems using a phased approach and a smooth onramp.
Each phase of the implementation addresses a specific part of the knowledge management
solution, lays the foundation for the next phase, provides immediate benefits and provides a
measurable ROI. An organizations knowledge management system is the collection of
information technologies used to facilitate the collection, organization, transfer and distribution
of knowledge between employees. Successful knowledge management projects use
technological building blocks and take a phased approach that balances the immediate need
to unify access to existing information with the long-term goal of improving the way
knowledge is captured and managed.

Using this smooth on-ramp methodology to implement knowledge management

makes the set of functional buildings blocks critical. Each block has to contribute to the ultimate
knowledge management system, while providing a positive ROI. In addition, each block
provides immediate, beneficial results that can be seen by the entire organization and each
phase in the process provides a foundation used to implement the next phase. The following
table presents a summary of a phased approach using a smooth on-ramp methodology. In
each of the phases, details about the building blocks used and recommended method of
implementation are provided.

Knowledge Mining

Some users will want to perform simple keyword searches across all information sources, while
others will want to target specific sources. As the number of information sources increases, end
users may be presented with extremely large result sets. Many users are already familiar with
this problem from their experiences with Internet search engines; they are often presented with
thousands or tens of thousands of hits with no easy way to navigate them. They will have little
patience when encountering info-glut inside the organization. he best way to head off this

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exasperating problem is through categorization of knowledge assets to enable clustering of
search results by knowledge map categories. This allows the user to quickly drill down or
mine the most relevant knowledge assets without having to learn complex query languages.
No one search method is best for all people at all times, so knowledge assets should be clustered
by multiple methods including physical system source, content type, or specialized conceptual
taxonomies. Ideally, a well-designed knowledge management system allows the user to choose
the method that best fits the task at hand.

The Knowledge Warehouse

The purpose of a knowledge warehouse is to provide a secure, scalable repository where

content, metadata and full text indices to knowledge can be stored. By providing both security
and metadata storage, a Knowledge Warehouse goes well beyond the capability of a simple
file index. By including and indexing the content of a document and metadata about the
document (e.g. where the document was created, what application was used to create the
document, who contributed to the document, etc.) the value of the knowledge in the document
is dramatically increased. A knowledge warehouse also provides the infrastructure for users to
easily contribute knowledge to the corporate knowledge store in the form of existing documents
or legacy data. This provides a central location for the myriad forms of ad hoc knowledge in
an organization that previously resided only in isolated silos. Through forms based contribution
where users supply metadata (either in fixed fields or in free format), and optionally attach
documents as part of the contribution, valuable knowledge can be quickly and easily captured.

Capturing Tacit Knowledge

The capture and management of tacit knowledge requires more than a searchable repository. A
knowledge management system with the ability to create customizable metadata about explicit
assets is an important resource in this regard. It should enable the capture and later location of
not just documents, but related information such as lessons learned, previous experiences and
relevant people. In addition, the system should allow users to submit valuable knowledge even
when they are not frequent contributors and therefore may not work through an established
knowledge silo. This eliminates the need for all users in the organization to install and maintain
complex client software for all of the application silos.

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 Knowledge Mapping

To increase the accuracy and speed of information retrieval, a knowledge management system
associates knowledge assets with categories from one or more taxonomies, or knowledge maps.
This categorization can be accomplished by the administrator, the end user on submission of
the knowledge or by a designated content manager (knowledge editor). The knowledge
management system must incorporate categorization into the contribution process, yet be
flexible enough to adapt to each organizations unique environment.

G. Step 7: Linking Knowledge to People

Knowledge Directory

Finding who knows what in an organization has always been a time-consuming process and
relying on serendipity is no solution to find the person with the right knowledge. The need to
locate subject-matter experts is not new and many enterprises have implemented skills
databases to try to solve this problem. Skills databases depend on end users to manually update
their profiles as their competencies and job functions change. A database administrator must
be assigned to continually update the database as new employees are hired and existing
employees leave or move within the organization.

A knowledge directory enables employees to locate subject-matter experts in order to

share tacit knowledgetheir experiences, know how and insights. A knowledge directory,
unlike a simple skills database, can infer what employees know based on the knowledge they
contribute and share. After a user specifies the expertise she seeks, a knowledge directory
returns a list of ranked subject-matter experts and their contact information based on the
explicit knowledge assets those employees contributed to the knowledge management system.
While a knowledge directory should eliminate the bulk of manual updating, it should also give
administrators a way to modify the results returned. Therefore, a key aspect of a knowledge
directory is the ability to include administrator-defined rules. This ensures that particular
experts can always be identified (or hidden) as required. The link between knowledge and
people distinguishes knowledge management systems from applications that manage explicit.
Knowledge dies when it is disembodied. But, in order to keep knowledge inside the
organization, the solution could be:

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 To analyse the workforces strengths, (analysing their expertise and knowledge and
categorize it so it could become accessible by other employees)
To determine which employees are flight risks (open talks to determine how could some
employees be retained)
Hiring retiring employees as consultants
Establish practice communities where individuals could meet and solve problems
Implement a mentoring program
Building a culture that values expertise

Knowledge processes are related to innovation processes. Some conceptualizations of

innovation processes regard knowledge as a resource and others regard tacit knowledge more
important than explicit knowledge for innovation. To optimize innovation processes is
important to know when to depend on tacit knowledge or on explicit knowledge. This is related
to the issue of weak and strong ties within networks. Further research is necessary to know
when tacit knowledge is important and when explicit knowledge in the innovation processes;
and when weak ties and strong ties are important within the innovation process. The
management strategies for hub firms within network structures, in particular the management
of knowledge mobility, innovation appropriability and network stability need further research.

One of the important implications of using knowledge-based systems (KBSs) will

centre around their impact on individual employees. This is especially true as more insurance
employees leave the workforce as they retire or seek other employment. In this case, using
knowledge management systems to capture the knowledge of internal experts will be crucial.
Being able to extract corporate knowledge and distribute it consistently will ensure steady
performance and efficiency in times of transition. KBSs also allow less experienced staff to
operate at higher levels with less oversight, which frees up more senior personnel for more
complex activities. Finally, and perhaps most importantly, the use of these systems increases
consistency and compliance to internal and external policies and regulations.

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