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Role of Information Technology in

Successful Knowledge Management Initiatives

Atreyi Kankanhalli, Fransiska Tanudidjaja, Juliana Sutanto and Bernard C.Y. Tan
Department of Information Systems
National University of Singapore
3 Science Drive 2, Singapore 117543, Republic of Singapore

Forthcoming:
Communications of the ACM

Word Count (excluding cover page): 2,993 words

Please address all correspondence on this paper to Bernard C.Y. Tan (Dr.)
Phone and Fax: (65) 6874-6868; Email: btan@comp.nus.edu.sg

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But considering the complexity of KM initiatives and the variety of IT solutions available on the market. executives must often confront the challenging task of deciding what type of IT solutions to deploy in support of their KM initiatives.knowledgebusiness. 1999). giving rise to knowledge management (KM) initiatives. Both these KM approaches are fundamental to understanding the role of IT in KM. This paper aims to shed light on the IT-KM match by investigating the role of IT in successful KM initiatives. With the codification approach. The main role of IT here is to help people share knowledge through common storage so as to achieve economic reuse of knowledge.pdf). An example of such IT tools is electronic knowledge repositories. more tacit and unstructured knowledge is shared largely through direct personal communication. 12 organizations (see Table 1) have been chosen for this study because information on their KM initiatives is available and they represent a variety of industry contexts. Examples of such IT tools are knowledge expert directories and video-conferencing tools. There are two basic approaches to KM for which IT can provide support: codification and personalization (Hansen et al. The main role of IT here is to help people locate each other and communicate so as to achieve complex knowledge transfer. Given that advances in information technology (IT) have made it easier to acquire.com/uploads/2002_Global_MAKE_Summary. more explicit and structured knowledge is codified and stored in knowledge bases. or disseminate knowledge than ever before. With the personalization approach. Role of Information Technology in Successful Knowledge Management Initiatives The growing importance of knowledge as a critical business resource has compelled executives to examine the knowledge underlying their businesses. These organizations can be classified along two dimensions (product-based 2 . The KM initiative in each organization was analyzed to better understand the role of IT in these initiatives. many organizations are employing IT to facilitate sharing and integration of knowledge. store. Organizations Studied and Industry Classification Among the 20 winners of Most Admired Knowledge Enterprises (MAKE) 2002 award (http://www.

an up-to-date expert directory is used to rapidly provide software development teams with people who have the desired expertise (Clayton and Foster 2000). as a manufacturer of computing and imaging products. in product- based industries. thereby dictating appropriate KM approaches and the role of IT in KM. Conversely. However. in Microsoft. Hewlett Packard can leverage its sales knowledge to support sales personnel or enhance product development. knowledge is less time-sensitive and stored knowledge tends to be useful over a relatively longer time span without updates. Table 1 classifies the 12 organizations under study using these two dimensions. For example. the services that accompany products. In a high volatility context. knowledge is time-sensitive. Currency of knowledge is paramount. This classification is important because it defines the competitive bases of organizations. and socio-cultural context. Therefore. where software life cycle is short. 3 . Product-based and service-based industries have different competitive bases. But a service-based organization like Ernst and Young mainly leverages its service knowledge to provide cost-effective services to its clients. The volatility dimension reflects the rapidity of change in the business environment and thus the extent to which knowledge can be economically reused. Stored knowledge needs to be refreshed continuously.versus service-based and high versus low volatility context). Business environment refers to market conditions as well as the technological. regulatory. For example. competition in service-based industries depends mainly on the services offered. and the processes of marketing the products. in a low volatility context. Competition in product-based industries includes the physical products themselves. there are more diverse areas where knowledge can be utilized to gain and sustain competitive advantage. compared to service-based industries.

Thus. In short. For example. Knowledge needed to sustain these diverse bases of competition is often tacit and fuzzy. • British Petroleum • Hewlett Packard based • Buckman Laboratories • Microsoft • Shell • Siemens Infineon Technologies • Xerox Service. Thus. Instead. and price. product-based organizations in low volatility context usually do not compete on the basis of products alone. Similarly. British Petroleum and Shell manufacture petroleum and petrochemicals obtained by oil exploration and refining. Buckman Laboratories. The papermaking and water treatment industries use fairly standard chemicals manufactured by well-established processes.500 per employee each year. these products are subject to regulation of quality. and Shell are examples of such organizations. which are informal networks of people who share similar work roles and common context. Buckman Laboratories produces chemicals for papermaking and water treatment. quantity. British Petroleum and Shell recognized oil exploration as a source of competitive advantage because drilling for oil is an expensive undertaking. Low volatility context High volatility context Product. Buckman Laboratories has spent $7. For instance. In the petroleum industry. • Ernst and Young • McKinsey based • KPMG • Skandia • Siemens Business Services Table 1. Industry Classification of the 12 Organizations Product-Based Organizations in Low Volatility Context British Petroleum. Such regulatory pressures and the nature of commodity markets make it difficult for British Petroleum and Shell to compete on basis of products.g.. Buckman Laboratories changed its strategy from merely selling products to solving chemical treatment problems for customers (Fulmer 1999). these organizations often compete on other bases (e. 4 . services that accompany products). these organizations have mainly adopted the personalization approach to KM and have deployed IT to support face-to-face communication and communities of practice (COP). it is difficult for Buckman Laboratories to compete solely on the basis of products.

g.for its more than 1. knowledge needed by sales teams should be disseminated swiftly to gain competitive advantage. To facilitate communication among its subsidiaries. Product-Based Organizations in High Volatility Context Hewlett Packard.000 to develop Connect. They operate in rapidly changing environments where rate of innovation and speed of new product development is crucial.. a knowledge yellow pages that helps employees to locate required expertise (Huang and Pan 2000). The effort needed to codify the knowledge and answer each possible query may be substantial (Hansen et al. Microsoft.200 employees. it is more effective to share knowledge via the personalization approach. Following launch of products. and industrial water treatment). electronic mails. Hence. technical knowledge must be transferred to product development teams in a timely manner. The best practice forum has a greater degree of codified knowledge whereas the discussion forum has minimal codified knowledge. To perform well. In addition. which comprised collaboration tools like LiveLink and Microsoft Exchange (Arjan 2000). Shell has an Expertise Directory that acts as a clearing-house and signpost for both knowledge seekers and contributors. For example. 1999). to facilitate a global e-communication network (K’Netix) that links specialists to field staff (Fulmer 1999). Although these organizations have invested heavily in IT to support the personalization approach to KM. Knowledge shared during the creation of high technology products is typically too tacit to be codified. Shell developed Global Networks. Towards this direction. global community knowledge is assembled across the organization to leverage expertise on maintenance of oil drilling platforms and reservoir modeling. Shell Global Networks has different degrees of codification for its three forums (Earl 2001). TechForum has about 20 sections devoted to areas such as pulp and paper. Siemens Infineon Technologies makes use of telephone. and video-conferencing tools for knowledge 5 . British Petroleum has invested $434. K’Netix has several forums to support COP devoted to various business areas (e. These organizations produce high technology products (computing hardware and software). Siemens Infineon Technologies. they also practice the codification approach to a lesser extent. and Xerox are examples of such organizations. Likewise.

and customer account history for its sales force (Teigland et al. Siemens Business Services provides technological solutions (e. the above units of Ernst and Young and KPMG provide consultancy services on operational issues (e. tax. sales and marketing tactics.sharing (Davenport and Probst 2000). 2000)..g. audit. The wealth of knowledge cumulated by these organizations and the ability to use this knowledge to serve their clients stand as a key value proposition. the codification strategy to KM can be employed for such functions. Examples of such IT include Connex in Hewlett Packard and Knowledge Map in Siemens Infineon Technologies. At Hewlett Packard. Service-Based Organizations in Low Volatility Context Siemens Business Services and the financial services and tax consultancy units of Ernst and Young and KPMG typify such organizations. The main role of IT is to provide yellow pages that map topics with experts. physical transfer of people across geographical locations facilitates such knowledge exchange (Hansen et al. knowledge needed by sales teams (e. In Microsoft. They provide consultancy services that are relatively stable over time. and white papers) provides knowledge and training to its field sales force (Clayton and Foster 2000).. the Internal Technical Education knowledge repository (comprising online learning.g.. live class schedules. 6 .g. In contrast. Competitive advantage of these organizations lies in the cost-effectiveness of service provision. product capabilities. Thus. and financial matters) that are fairly well-defined. For example. as a main component of their businesses. SAP R/3 consultancy) which have well-organized support knowledge. For example. Xerox deploys the Eureka knowledge repository to provide its service engineers with access to technical tips for servicing photocopier machines (Hickins 1999). Hewlett Packard uses its Electronic Sales Partners as a knowledge base of technical product details. 1999). market characteristics. Employees in both organizations use such systems to locate colleagues with relevant expertise on specific problems and then utilize more personal forms of communication to gain knowledge from the experts. and service tips) can be more readily codified and thereby cost effectively disseminated to sales teams.

Moreover. Ernst and Young has developed the Center for Business Knowledge as a central repository holding its 40 areas of operational knowledge (Sarvary 1999). Service-Based Organizations in High Volatility Context McKinsey and Skandia typify such organizations. a financial services and insurance organization. leverages knowledge about its clients and their needs to develop strategic financial services. The personalization approach to KM is usually used by these organizations. Knowledge is codified. McKinsey. Due to the highly dynamic nature of their businesses. For example. In Skandia. Physical transfer of people between offices is crucial to knowledge sharing (Sarvary 1999). 2001). stored electronically. Their competitive advantage lies in the ability to provide strategic services that are tailored to the unique requirements of clients. knowledge sharing in McKinsey is done mainly through brainstorming sessions and personal conversations.Here. Knowledge management initiatives focus more on people than on IT. these organizations rely less on IT for knowledge sharing. KWorld of KMPG and SAP R/3 Knowledge Library of Siemens Business Services (Davenport and Probst 2000) are valuable knowledge resource repositories for their employees. Skandia built a 7 . Such tacit knowledge can be effectively shared via face-to-face interactions. new and unstructured knowledge must be effectively exchanged so that custom-made solutions can be tailored for their clients. the exchange of knowledge among international subsidiaries is conducted mainly through physical transfer of people. Lotus Notes. These organizations deliver their knowledge resources to employees through common technological platforms such as Microsoft Office. For instance. in a timely fashion. and web browsers. Skandia. Similarly. utilizes its cumulative knowledge to deliver highly customized solutions to solve unique client problems. and made available to employees via common technological platforms throughout the entire organization. a strategic consultancy organization. International meetings among managers are held several times a year to exchange experiences and promote new concepts (Mertins et al. Compared to organizations under the preceding three categories. the codification approach to KM is often employed to facilitate economic reuse of knowledge.

Repositories Direct Exchange based • Center for Business • Phone and video conferencing Knowledge (Ernst and Young) (McKinsey) • Kworld (KPMG) • People transfer (McKinsey and • SAP R/3 (Siemens Business Skandia) Services) Table 2.g... A combination of expert directories with collaborative tools (e.g. Executives operating in such a context can identify and foster COP that have direct impact on their organizational strategic objectives (e. discussion forums and video-conferencing) allows employees to connect and pool their knowledge. Low volatility context High volatility context Product.waterside villa (Future Center) where employees can exchange ideas and experiences. the COP on Pulp and Paper 8 . thereby facilitating accidental learning and building networks (Earl 2001). Summary of KM Systems Implications for Practice Product-based organizations in low volatility context tend to compete on bases other then the physical products themselves. Expert Directories Expert Directories based • Connect (British Petroleum) • Expert Directory (Microsoft) • Expertise Directory (Shell) • Knowledge Map (Siemens COP Infineon Technologies) • K’Netix (Buckman • Connex (Hewlett Packard) Laboratories) Direct Exchange • Global Networks (Shell) • Phone and video conferencing (Siemens Infineon Technologies) • People-transfer (Hewlett Packard) Repositories • Electronic Sales Partners (Hewlett Packard) • Eureka (Xerox) • Internal Technical Education (Microsoft) Service. Table 2 summarizes the KM systems in the organizations discussed above. Many such organizations adopt the personalization approach to KM. These events are designed to promote intensive knowledge exchange and for employees to learn where to find experts on certain topics within the organization.

Management can focus on the creation and maintenance of knowledge repositories in core domains. Service-based organizations in low volatility context often take the codification approach to KM. executives can also provide incentives to build an organizational culture that encourages knowledge sharing. To support sales teams and technical field teams. For example. Given that rate of innovation and fast product dissemination are keys to success. For example. which encourage knowledge sharing.. expert directories and collaborative tools can support the personalization approach to KM. During product development (and for research and development purposes in general). with a careful review process by domain experts or knowledge owners. and that both factors hinge on intensive knowledge sharing. organizations control the quality of knowledge content being codified through a careful review process by domain experts (as in Xerox). They require IT tools that support multiple media (e. organizations can enforce policies to alleviate misuse of organizational knowledge so as to further encourage knowledge contribution. and searching of discussion threads. To be most effective. a common knowledge base with anytime. In addition. audio. anywhere access will go a long way towards facilitating the codification approach to KM. employees in Ernst and Young are rewarded for their contribution to knowledge repositories. video.in Buckman Laboratories).g. 9 . These communities can be supported with tools that allow efficient posting of queries and solutions. Participation in COP may also be made a part of employee performance appraisal. these repositories must provide employees with seamless access. and have powerful indexing and search capability. Product-based organizations in high volatility context tend to adopt both personalization and codification approaches to KM. Buckman Laboratories promotes and rewards employees who are actively contributing in discussion forums. In many instances. Beyond the technical qualities of knowledge repositories. executives may consider providing team rewards to foster collaborative norms. Service-based organizations in high volatility context often rely on the personalization approach to KM.

the amount of consulting time that an expert has provided to colleagues may form a part of performance appraisal. Summary of Implications for Practice Conclusion This article offers some insights on the IT-KM match through a study of 12 organizations with successful KM initiatives. depending on task characteristics or processes supported. • Create and maintain high quality • Build a culture of mutual support based knowledge repositories and interaction • Provide effective search • Provide communication support capabilities for repositories for one-to-one interaction via • Reward quality contributions to multiple media knowledge repositories • Reward effective reuse of knowledge from repositories Table 3. Nevertheless. It is plausible that organizations could use the personalization and codification approaches to KM.g. Depending on whether organizations are product-based or service-based. Low volatility context High volatility context Product. For example. For example. and graphics) for richer interaction. 10 .. and whether they operate in a high or low volatility context. • Identify and promote strategic • Provide expert directories and based communities of practice collaborative tools for product • Provide expert directories and development teams collaborative tools • Provide knowledge repositories for • Reward participation in strategic product sales teams communities of practice • Review of contents in knowledge repositories by experts • Reward team sharing of knowledge Service. Future work may go beyond the industry classification of this study to investigate KM strategies and IT support at a finer level (e. Since knowledge sharing is mainly conducted through one-to-one interaction. executives should build a culture of mutual support.text. Organizations may consider mechanisms to reward employees for sharing knowledge directly with colleagues. The implications for practice are summarized in Table 3. organizations are found to have distinct patterns in their approaches to KM (see Figure 1). consultants in McKinsey are expected to return phone calls from colleagues promptly. to varying extents. task characteristics or processes supported).

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