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Learning Objectives

11-1

Define knowledge and describe the


different types of knowledge
Describe the characteristics of knowledge
management
Describe organizational learning and its
relationship to knowledge management
Describe the knowledge management
cycle
Describe the technologies that can be
used in a knowledge management system

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Learning Objectives

11-2

Describe different approaches to


knowledge management
Describe the chief knowledge officer and
others involved in knowledge
management
Describe the role of knowledge
management in organizational activities
Describe the different ways of evaluating
intellectual capital in an organization
Describe how KMS are implemented

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Learning Objectives

11-3

Describe the roles of technology,


people, and management in knowledge
management
Describe the benefits and drawbacks of
knowledge management initiatives
Describe how knowledge management
can revolutionize the way an
organization functions
The future of KN: Web 2.0 and beyond

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Knowledge management

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Knowledge management(KM) is the process of capturing,


developing, sharing, and effectively using organisational
knowledge.It refers to a multi-disciplined approach to
achieving organisational objectives by making the best use of
knowledge.

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Opening Vignette:
MITRE Knows What It Knows
Through Knowledge Management
Company background
Problem description
Proposed solution
Results
Answer and discuss the case
questions
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Opening Vignette:
MITREs View to the KM Process

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Introduction to
Knowledge Management

Knowledge management concepts


and definitions

Knowledge management
The active management of the expertise
in an organization. It involves collecting,
categorizing, and disseminating
knowledge

Intellectual capital
The invaluable knowledge of an
organizations employees

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Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Introduction to
Knowledge Management

Knowledge is

information that is contextual, relevant,


and actionable
understanding, awareness, or familiarity
acquired through education or experience
anything that has been learned,
perceived, discovered, inferred, or
understood.

In a knowledge management system,


knowledge is information in action
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Introduction to
Knowledge Management

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11-10

Knowledge and data are related through information, which is


also defined in this answer.
Data are facts, measurements, and statistics.
Information is organized or processed data that is
timely (i.e., inferences from the data are drawn within the time
frame of applicability) and accurate (i.e., with regard to the
original data).
Knowledge is information that is contextual, relevant,
and actionable.

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Introduction to
Knowledge Management

Characteristics of knowledge

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Extraordinary leverage and increasing


returns
Fragmentation, leakage and the need to
refresh
Uncertain value
Uncertain value of sharing

Knowledge-based economy
The economic shift from natural resources
to intellectual assets

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Introduction to
Knowledge Management

Explicit and tacit knowledge

Explicit (leaky) knowledge

Explicit knowledge is knowledge that has been or can be


articulated, codified, and stored. It deals with objective, rational
and technical information in manuals, documents, procedures,
software, and even stories (though this last is less common in
business).

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Knowledge that deals with objective, rational, and technical


material (data, policies, procedures, software, documents, etc.)
Easily documented, transferred, taught and learned
Examples

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Introduction to
Knowledge Management

Explicit and tacit knowledge

Tacit (embedded) knowledge

Tacit knowledge has been described as know-how, as opposed to


the know-what and know-why of explicit knowledge. It is often
highly personal and difficult to formalize, and deals with subjective,
cognitive and experiential learning. Some tacit knowledge could be
made explicit if the person holding the knowledge recognized the
value of doing so, but in other cases it is difficult to codify (such as
knowing how to ride a bicycle). Capturing and sharing tacit
knowledge is a more difficult knowledge management task than is
capturing and sharing explicit knowledge.

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Knowledge that is usually in the domain of subjective, cognitive, and


experiential learning
It is highly personal and hard to formalize
Hard to document, transfer, teach and learn
Involves a lot of human interpretation

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Introduction to
Knowledge Management

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Knowledge management
systems (KMS)
A system that facilitates knowledge
management by ensuring
knowledge flow from the person(s)
who know to the person(s) who
need to know throughout the
organization; knowledge evolves
and grows during the process

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Organizational
Learning and Transformation

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Learning organization
An organization capable of learning
from its past experience, implying the
existence of an organizational memory
and a means to save, represent, and
share it through its personnel
Organizational memory
Repository of what the organization
knows

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Organizational
Learning and Transformation

Organizational learning

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Development of new knowledge and


insights that have the potential to
influence organizations behavior
The process of capturing knowledge
and making it available enterprise-wide
Need to establish corporate memory
Modern IT helps
People issues are the most important!

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Organizational
Learning and Transformation

Organizational culture
The aggregate attitudes in an
organization concerning a certain issue
(e.g., technology, computers, DSS)

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How do people learn the culture?


Is it explicit or implicit?
Can culture be changed? How?
Give some examples of corporate culture:
Microsoft, Google, Apple, HP, GM,

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Organizational
Learning and Transformation

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Why people dont like to share knowledge:

Lack of time to share knowledge and time to


identify colleagues in need of specific knowledge

Fear that sharing may jeopardize ones job security

Low awareness and realization of the value and


benefit of the knowledge others possess

Dominance in sharing explicit over tacit knowledge

Use of a strong hierarchy, position-based status,


and formal power

Insufficient capture, evaluation, feedback,


communication, and tolerance of past mistakes

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Organizational
Learning and Transformation

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Why people dont like to share knowledge:

Differences in experience and education levels

Lack of contact time and interaction between


knowledge sources and recipients

Poor verbal/written communication and


interpersonal skills

Age, gender, cultural and ethical defenses

Lack of a social network

Ownership of intellectual property

Lack of trust in people because they may misuse


knowledge or take unjust credit for it

Perceived lack of accuracy/credibility of


knowledge

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Knowledge Management
Activities

Knowledge management
initiatives and activities

Most knowledge management


initiatives have one of three aims:
1.
2.

3.

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To make knowledge visible


To develop a knowledge-intensive
culture
To build a knowledge infrastructure

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Knowledge Management
Activities
Knowledge creation is the
generation of new insights, ideas,
or routines
Four modes of knowledge creation:

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Socialization :Tactic to
Externalization
Internalization
Combination
Analytics-based knowledge creation?

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Knowledge Management
Activities
Knowledge sharing

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Knowledge sharing is the willful


explication of one persons ideas,
insights, experiences to another
individual either via an intermediary
or directly
In many organizations, information
and knowledge are not considered
organizational resources to be shared
but individual competitive weapons to
be kept private

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Knowledge Management
Activities
Knowledge seeking

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Knowledge seeking (knowledge


sourcing) is the search for and use
of internal organizational knowledge
Lack of time or lack of reward may
hinder the sharing of knowledge or
knowledge seeking

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Approaches to
Knowledge Management

Process approach to knowledge


management attempts to codify
organizational knowledge through
formalized controls, processes and
technologies

Practice approach focuses on building the


social environments or communities of
practice necessary to facilitate the sharing
of tacit understanding

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Focuses on explicit knowledge and IT

Focuses on tacit knowledge and socialization

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Approaches to
Knowledge Management

Hybrid approaches to knowledge


management

Hybrid
at
80/20
to
50/50

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The practice approach is used so that a


repository stores only explicit knowledge
that is relatively easy to document
Tacit knowledge initially stored in the
repository is contact information about
experts and their areas of expertise
Increasing the amount of tacit
knowledge over time eventually leads to
the attainment of a true process
approach

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Knowledge Management A Demand Led Business


Supply-driven vs. demand-driven KM
Activity

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Approaches to
Knowledge Management

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Best practices
In an organization, the best methods
forsolving problems. These are often
stored in the knowledge repository of
a knowledge management system
Knowledge repository is the actual
storage location ofknowledge in a
knowledge management system.
Similar in nature to a database, but
generally text-oriented

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

A
Comprehensi
ve View to
Knowledge
Repository

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Approaches to
Knowledge
Management

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Approaches to
Knowledge Management

Developing a knowledge repository

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Knowledge repositories are developed


using several different storage
mechanisms in combination
The most important aspects and
difficult issues are making the
contribution of knowledge relatively
easy for the contributor and
determining a good method for
cataloging the knowledge

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Information Technology (IT) in


Knowledge Management
The KMS cycle

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KMS usually follow a six-step cycle:


1. Create knowledge
2. Capture knowledge
3. Refine knowledge
4. Store knowledge
5. Manage knowledge
6. Disseminate knowledge

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Information Technology (IT) in


Knowledge Management
The Cyclic
Model of
Knowledge
Management

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Information Technology (IT) in


Knowledge Management
Components of KMS

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KMS are developed using three sets of core


technologies:
1. Communication
2. Collaboration
3. Storage and retrieval
Technologies that support KM

Artificial intelligence

Intelligent agents

Knowledge discovery in databases

Extensible Markup Language (XML)

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Information Technology (IT) in


Knowledge Management

Artificial intelligence

AI methods used in KMS:

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Assist in and enhance searching


knowledge
Help for knowledge representation (e.g.,
ES)
Help establish knowledge profiles of
individuals and groups
Help determine the relative importance of
knowledge when it is contributed to and
accessed from the knowledge repository

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Information Technology (IT) in


Knowledge Management

AI methods used in KMS:

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Scan e-mail, documents, and databases to


perform knowledge discovery, determine
meaningful relationships and rules
Identify patterns in data (usually through neural
networks and other data mining techniques)
Forecast future results by using data/knowledge
Provide advice directly from knowledge by
using neural networks or expert systems
Provide a natural language or voice command
driven user interface for a KMS

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Information Technology (IT) in


Knowledge Management

Intelligent agents

Intelligent agents are software systems


that learn how users work and provide
assistance in their daily tasks
They are used to elicit and identify
knowledge

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See ibm.com, gentia.com for examples

Combined with enterprise knowledge


portal to proactively disseminate
knowledge

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Information Technology (IT) in


Knowledge Management

Knowledge discovery in
databases (KDD)
A machine learning process that
performs rule induction, or a
related procedure to establish (or
create) knowledge from large
databases

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a.k.a. Data Mining (and/or Text


Mining)

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Information Technology (IT) in


Knowledge Management

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Model marts
Small, generally departmental repositories
of knowledge created by employing
knowledge-discovery techniques on past
decision instances. Similar to data marts
Model warehouses
Large, generally enterprise-wide
repositories of knowledge created by
employing knowledge-discovery
techniques. Similar to data warehouses

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Information Technology (IT) in


Knowledge Management

Extensible Markup Language (XML)

Web 2.0

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XML enables standardized representations of


data structures so that data can be
processed appropriately by heterogeneous
information systems without case-by-case
programming or human intervention
The evolution of the Web from statically
disseminating information to collaboratively
creating and sharing information

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

KM System Implementation

Knowledge management products and


vendors

Knowware
Technology tools (software/hardware
products) that support knowledge
management
Software development companies / vendors

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Collaborative computing tools


Knowledge servers
Enterprise knowledge portals (EKP)
An electronic doorway into a knowledge
management system

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KM System Implementation

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Software development companies /


vendors

Electronic document management


(EDM)
A method for processing documents
electronically, including capture, storage,
retrieval, manipulation, and presentation

Content management systems (CMS)


An electronic document management system
that produces dynamic versions of
documents, and automatically maintains the
current set for use at the enterprise level

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KM System Implementation

Software development tools

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Knowledge harvesting tools


Search engines
Knowledge management suites
Knowledge management consulting
firms
Knowledge management ASPs

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KMS Implementation

Integration of KMS with other


business information systems

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With DSS/BI Systems


With AI
With databases and information
systems
With CRM systems
With SCM systems
With corporate intranets and extranets

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Roles of People in
Knowledge Management

Chief knowledge officer (CKO)


The person in charge of a knowledge
management effort in an organization

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Sets KM strategic priorities


Establishes a repository of best practices
Gains a commitment from senior executives
Teaches information seekers how to better elicit it
Creates a process for managing intellectual assets
Obtain customer satisfaction information
Globalizes knowledge management

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Roles of People in
Knowledge Management

Skills required of a CKO include:

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Interpersonal communication skills


Leadership skills
Business acumen
Strategic thinking
Collaboration skills
The ability to institute effective educational
programs
An understanding of IT and its role in
advancing knowledge management

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Roles of People in
Knowledge Management

The CEO, other chief officers, and


managers

The CEO is responsible for championing a


knowledge management effort
The officers make available the resources
needed to get the job done

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CFO ensures that the financial resources are available


COO ensures that people begin to embed knowledge
management practices into their daily work processes
CIO ensures IT resources are available

Managers also support the KM efforts by


providing access to sources of knowledge

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Roles of People in
Knowledge Management

Community of practice (CoP)


A group of people in an organization
with a common professional interest,
often self-organized for managing
knowledge in a knowledge
management system

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See Application Case 11.7 as an


example of how Xerox successfully
improved practices and cost savings
through CoP

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Roles of People in
Knowledge Management

KMS developers

KMS staff

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The team members who actually


develop the system
Internal + External

Enterprise-wide KMS require a fulltime staff to catalog and manage the


knowledge

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ensuring the Success of


Knowledge Management
Success stories of knowledge management
Efforts
Implementing a good KM strategy can:

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Reduce
loss of intellectual capital
costs by decreasing the number of times
the company must repeatedly solve the
same problem
redundancy of knowledge-based activities
Increase
productivity
employee satisfaction

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ensuring the Success of


Knowledge Management
MAKE: Most Admired Knowledge Enterprises
Efforts
Annually identifying the best practitioners of KM

Criteria (performance dimensions):

1.

Creating a knowledge-driven corporate culture


Developing knowledge workers through leadership
Fostering innovation
Maximizing enterprise intellectual capital
Creating an environment for collaborative knowledge
sharing
Facilitating organizational learning
Delivering value based on stakeholder knowledge
Transforming enterprise knowledge into stakeholders
value

2.
3.
4.
5.
6.
7.
8.

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Ensuring the Success of


Knowledge Management
MAKE: Most Admired Knowledge
Efforts
Enterprises

Annually identifying the best practitioners of


1. McKinsey &
10. PricewaterhouseCoope
KM
Company
rs
2008 Winners:
2.
3.
4.
5.
6.
7.
8.
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9.

Google
Royal Dutch Shell
Toyota
Wikipedia
Honda
Apple
Fluor
Microsoft

11.
12.
13.
14.
15.
16.
17.
18.

Ernst & Young


IBM
Schlumberger
Samsung Group
BP
Unilever
Accenture

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Ensuring the Success of


Knowledge Management
Useful applications of KMS
Efforts

Finding experts electronically and


using expert location systems

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Expert location systems (know-who)


Interactive computerized systems that
help employees find and connect with
colleagues who have expertise required
for specific problemswhether they are
across the county or across the roomin
order to solve specific, critical business
problems in seconds

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ensuring the Success of


Knowledge Management
Knowledge management valuation
Efforts

Financial metrics for knowledge


management valuation

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Focus knowledge management projects


on specific business problems that can be
easily quantified
When the problems are solved, the value
and benefits of the system become
apparent

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ensuring the Success of


Knowledge Management
Knowledge management valuation
Efforts

Nonfinancial metrics for knowledge


management valuationnew ways to
view capital when evaluating intangibles:

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Customer goodwill
External relationship capital
Structural capital
Human capital
Social capital
Environmental capital

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ensuring the Success of


Knowledge Management
Causes of knowledge management
Efforts
failure

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The effort mainly relies on technology and


does not address whether the proposed
system will meet the needs and objectives
of the organization and its individuals
Lack of emphasis on human aspects
Lack of commitment
Failure to provide reasonable incentive for
people to use the system

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ensuring the Success of


Knowledge Management
Factors that lead to knowledge
Efforts
management success

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A link to a firms economic value, to


demonstrate financial viability and
maintain executive sponsorship
A technical and organizational
infrastructure on which to build
A standard, flexible knowledge structure
to match the way the organization
performs work and uses knowledge

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ensuring the Success of


Knowledge Management
Factors that lead to knowledge
Efforts
management success

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A knowledge-friendly culture that leads


directly to user support
A clear purpose and language, to
encourage users to buy into the system
A change in motivational practices, to
create a culture of sharing
Multiple channels for knowledge transfer

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ensuring the Success of


Knowledge Management
Factors that lead to knowledge
Efforts
management success

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A significant process orientation and


valuation to make a knowledge
management effort worthwhile
Nontrivial motivational methods to
encourage users to contribute and
use knowledge
Senior management support

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Last words on KM

Knowledge is an intellectual asset


IT is just an important enabler
Proper management of knowledge is
a necessary ingredient for success
Key issues:

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Organizational culture
Executive sponsorship
Measurement of success

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

End of the Chapter

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Questions / comments

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Publishing as Prentice Hall

11-60

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall