KNOWLEDGE MANAGEMENT

MITM563

TOPIC 5 (PART 2)

KM MODELS AND SYSTEMS

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 Knowledge Management
Technologies
Technologies that support KM include:
1. Artificial Intelligence (AI)
2. electronic discussion groups
3. computer-based simulations
4. databases
5. decision support systems
6. enterprise resource planning systems
7. management information systems
8. expertise locator systems
9. videoconferencing
10.information repositories encompassing best
practices databases and lessons learned systems
11.Others

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 Knowledge Management
Technologies
Examples:
1. World Bank: uses a combination of video interviews
and hyperlinks to documents and reports to
systematically record the knowledge of employees
who are close to retirement [Lesser & Prusak 2001]
2. British Petroleum (BP): desktop videoconferencing
has improved communication and enabled many
problems at offshore oil fields to be solved without
extensive traveling [Skyrme 2000]
3. PETRONAS: has developed a knowledge-based
platform that comprises several components, such
as knowledge repository, communities of practice,
expert directory, best practices, and other virtual
applications.

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Knowledge Management
Systems
Knowledge management systems
are the integration of
technologies and mechanisms
that are developed to support the
four KM processes.

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Knowledge Management
Processes
What are the processes that
knowledge undergoes in an
organization?

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 KM Processes
Source: SECI model by Nonaka and Takeuchi (1995)

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1. Knowledge Discovery Systems

Knowledge discovery systems

support the process of developing
new tacit or explicit knowledge
from data and information or from
the synthesis of prior knowledge
Support two KM sub-processes
◦ combination, enabling the discovery of
new explicit knowledge
◦ socialization, enabling the discovery of
new tacit knowledge
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Knowledge Discovery Systems:
Mechanisms for Combination
Mechanisms that facilitate combination:
◦ Collaborative problem solving
◦ Joint decision making
◦ Collaborative creation of documents
Example:
◦ At senior management level, new explicit
knowledge is created by sharing documents and
information related to midrange concepts (eg,
product concepts) augmented with grand
concepts (eg, corporate vision) to produce new
knowledge about both areas.
◦ This newly created knowledge might be a better
understanding of products and a corporate vision

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Knowledge Discovery Systems:
Mechanisms for Socialization
Mechanisms that facilitate
socialization:
◦ Apprenticeships
◦ Employee rotation across areas
◦ Conferences
◦ Brainstorming retreats
◦ Cooperative projects across
departments
◦ COP

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Knowledge Discovery Systems:
Technologies for Combination
Technologies that facilitate combination:
◦ Knowledge discovery systems (knowledge work
system)
◦ Databases
◦ Web-based access to data

 “Reconfigurationof existing information

through sorting, adding, combining, and
categorizing of explicit knowledge (as
conducted in computer databases) can
lead to new knowledge” [Nonaka & Takeuchi
1995].

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Knowledge Discovery Systems:
Mechanisms for Socialization
Technologies that facilitate
socialization:
◦ Instant messaging
◦ Social Networking Sites (Fb, Instagram,
etc.)
◦ Social chat groups (WhatsApp, Telegram,
etc.)
◦ VOIP
◦ Video-conferencing
◦ Electronic support for communities of
practice (COPs)
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Knowledge Discovery Systems
Knowledge work systems
Collaboration systems and
enterprise knowledge
environments
Data mining and knowledge
discovery

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 Data Mining (DM)
 Data Mining can be used in many
different sectors of business to both
predict and discover trends.
 In the past, we were only able to
analyze what a company’s customers or
clients HAD DONE, but now, with the
help of Data Mining, we can predict what
client WILL DO.
 Data Mining helps professionals improve
their understanding of customer
behavior and make smart decisions.
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 Benefits Using Data
Mining
Predictfuture trends
Analyze customer purchase
habits
Help with decision making
Improve company revenue and
lower costs
Market basket analysis
Quick Fraud detection

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 DM Techniques
Applications
1. Marketing – Predictive DM
techniques, like artificial neural
networks (ANN), have been used for
target marketing including market
segmentation.
2. Direct marketing – customers are
likely to respond to new products
based on their past consumer
behavior (pattern)
3. Retail – DM methods have likewise
been used for sales forecasting.
4. Market basket analysis – uncover 15
 DM Techniques
Applications
1. Banking – Trading and financial forecasting are
used to determine securities pricing, futures
price forecasting, and stock performance.
2. Insurance – DM techniques have been used for
segmenting customer groups to determine
premium pricing and predict claim frequencies.
3. Telecommunications – Predictive DM techniques
have been used to attempt to reduce attrition,
and to predict when customers will change their
services to a competitor.
4. Operations management – DM techniques have
been used for planning and scheduling, project
management, and quality control.
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 Cross-Industry
Standard Process
(CRISP DM)
1. Business Understanding
2. Data Understanding
3. Data Preparation
4. Model building and validation
5. Evaluation and interpretation
6. Deployment

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1. Business Understanding
process
a. Determine Business objectives – To obtain the
highest benefit from data mining, there must be
a clear statement of the business objectives.
b. Situation Assessment – The majority of the
people in a marketing campaign who receive a
target mail, do not purchase the product.
c. Determine Data Mining Goal – Identifying the
most likely prospective buyers from the sample,
and targeting the direct mail to those customers,
could save the organization significant costs.
d. Produce Project Plan – This step also includes the
specification of a project plan for the DM study .

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2. Data Understanding
process
a. Data collection – Defines the data sources for the
study, including the use of external public data,
and proprietary databases.
b. Data description – Describes the contents of each
file or table. Some of the important items in this
report are: number of fields (columns) and percent
of records missing.
c. Data quality and verification – Define if any data
can be cleaned/deleted because of irrelevance or
lack of quality.
d. Exploratory Analysis of the Data – Use to develop a
hypothesis of the problem to be studied, and to
identify the fields that are likely to be the best
predictors/key success factors.

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3. Data Preparation process
a. Selection – Requires the selection of the
predictor variables and the sample set.
b. Construction and transformation of
variables – Often, new variables must be
constructed to build effective models.
c. Data integration – The dataset for the data
mining study may reside on multiple
databases, which would need to be
consolidated into one database.
d. Formatting – Involves the reordering and
reformatting of the data fields, as required
by the DM model.

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4. Model building and Validation
process
a. Generate Test Design – Building an accurate
model is a trial and error process. The DM
specialist try several options, until the best
model emerges.
b. Build Model – Different algorithms could be
tried with the same dataset. Results are
compared to see which model produce the
best results.
c. Model Evaluation – In constructing a model, a
subset of the data is usually set-aside for
validation purposes. The validation data set is
used to calculate the accuracy of predictive
qualities of the model.

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5. Evaluation and Interpretation
process
a. Evaluate Results – Once the
model is determined, the
predicted results are compared
with the actual results in the
validation dataset.
b. Review Process – Verify the
accuracy of the process.
c. Determine Next Steps – List of
possible actions decision.
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6. Deployment process
a. Plan Deployment – This step involves
implementing the ‘live’ model within an
organization to aid the decision making
process.
b. Produce Final Report – Write a final report.
c. Plan Monitoring and Maintenance –
Monitor how well the model predicts the
outcomes, and the benefits that this
brings to the organization.
d. Review Project – Experience, and
documentation.

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CRISP-DM Data Mining Process
Methodology

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 Data Mining Techniques
1. Predictive Techniques
◦ Classification: Data mining techniques in this
category serve to classify the discrete outcome
variable.
◦ Prediction or Estimation: DM techniques in
this category predict a continuous outcome (as
opposed to classification techniques that
predict discrete outcomes).
2. Descriptive Techniques
◦ Affinity or association: Data mining
techniques in this category serve to find items
closely associated in the data set.
◦ Clustering: DM techniques in this category
aim to create clusters of input objects, rather
than an outcome variable. 25
 Data Mining and Customer
Relationship Management
(CRM)
CRM is the mechanisms and
technologies used to manage the
interactions between a company and
its customers.
The data mining prediction model is
used to calculate a score: a numeric
value assigned to each record in the
database to indicate the probability
that the customer represented by that
record will behave in a specific manner
(trend & pattern).
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Barriers to the use of DM
The most significant barriers that
prevented DM in the business:
1. Lack of data to support the
analysis
2. Limited computing power to
perform the mathematical
calculations required by the
DM algorithms.

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Other Barriers to DM

• User privacy/security
• Amount of data is
overwhelming
• Great cost at implementation
stage
• Possible misuse of
information
• Possible in accuracy of data
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2. Knowledge Capture
Systems
Knowledge capture systems
support the process of retrieving
either explicit or tacit knowledge
that resides within KM Repositories
- people, artifacts, or organizational
entities
Technologies can also support
knowledge capture systems by
facilitating externalization and
internalization
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 Group Discussion (last week)
Knowledge Capture at Viant
Viant, the Boston-based company uses a variety of means to
capture knowledge. It employs a number of simple but
unavoidable forms. Before every project, consultants are
required to complete a quick sheet describing the knowledge
they will need, what aspects of knowledge can be leveraged
from prior projects, and what they will need to create along
with the lessons they hope to learn that they can share with
others later. A longer report, a sunset review, is produced at a
team meeting to document what worked and what did not
work well. Forgetting these reports is hard due to several
reasons: “First, almost every document ends up on Viant’s
internal Web site, hot-linked every which way. Second, sunset
reviews are done with a facilitator who wasn’t on the team,
which helps keep them honest. Third, every six weeks
Newell’s knowledge management group prepares, posts, and
pushes a summary of what’s been learned.”
Source: Stewart 2000
Questions:
Can you identify knowledge capture activities32
Knowledge Capture Systems:
Mechanisms for Externalization
Examples of mechanisms that facilitate externalization, from
the consulting company Viant
Before every project, consultants are required to complete a
“quicksheet” describing:
◦ the knowledge they need
◦ what aspects of knowledge can be leveraged from prior projects
◦ what they need to create
◦ the lessons they hope to learn that they can share with others later
◦ After every project, the team is required to meet to produce a sunset
review to document what worked and what did not work well.
Forgetting these reports is hard for several reasons:
◦ “Almost every document ends up on Viant’s internal website, hot-
linked every which way.”
◦ “Sunset reviews are done with a facilitator who wasn’t on the team,
which helps keep them honest.”
◦ “Every six weeks [the] knowledge-management group prepares,
posts, and pushes a summary of what’s been learned.”

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Knowledge Capture Systems:
Mechanisms for Internalization
Mechanisms that facilitate internalization:
◦ Learning by doing
◦ On-the-job training
◦ Learning by observation
◦ Face-to-face meetings
Example:
◦ At one firm “the product divisions also
frequently send their new-product development
people to the Answer Center (Helpdesk) to chat
with the telephone operators or the 12 experts,
thereby `re-experiencing’ their experiences”
[Nonaka & Takeuchi 1995].

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Knowledge Capture Systems:
Technologies
Technologies that facilitate externalization:
◦ Knowledge capture is needed for implementation
of intelligent technologies such as:
 expert systems
 case-based reasoning systems
Technologies that facilitate internalization:
◦ Computer-based training technologies (E-learning)
◦ Communication technologies
Example: an individual can internalize knowledge
from a message sent by another expert, an AI-
based knowledge capture system, computer-based
simulations, etc.

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3. Knowledge Sharing
Systems
Knowledge sharing systems support
the process through which explicit
or implicit knowledge is
communicated to other individuals
Knowledge sharing systems
operate by supporting socialization
(which promotes sharing of tacit
knowledge) and exchange sub
processes (i.e. sharing of explicit
knowledge)
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 Knowledge Sharing Systems:
Mechanisms & Technologies for Socialization

Mechanisms and technologies

facilitating socialization: many play
an equally important role for
knowledge sharing as in knowledge
discovery
Topically focused discussion groups
(or technology-enabled chat groups)
facilitate knowledge sharing by
enabling individuals to explain their
knowledge to the rest of the group
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Knowledge Sharing Systems:
Mechanisms & Technologies for Exchange

Mechanisms facilitating exchange:

◦ memos & letters
◦ manuals
◦ progress reports
◦ presentations
Technologies facilitating exchange:
◦ Web 2.0, groupware & other team collaboration
mechanisms
◦ web-based access to data & databases
◦ Knowledge repositories, including best practice
databases, lessons learned systems, and
expertise locator systems
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4. Knowledge Application
Systems
Knowledge application systems
support the process through which
some individuals utilize knowledge
possessed by other individuals
without actually acquiring, or
learning, that knowledge
Mechanisms and technologies
support knowledge application
systems by facilitating routines and
direction.
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Knowledge Application
Systems: KM Mechanisms
Mechanisms facilitating direction include:
◦ traditional hierarchical relationships in organizations
◦ help desks
◦ support centres
Mechanisms supporting routines include:
◦ organizational policies
◦ work practices
◦ Standards of procedures (SOP)
Forboth direction and routines, these
mechanisms can be implemented either:
◦ within an organization (eg, organizational hierarchies)
◦ across organizations (eg, software support help desks)

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Knowledge Application
Systems: KM Technologies
Technologies supporting direction include:
◦ experts’ knowledge embedded in expert systems
and decision support systems
◦ troubleshooting systems based on the use of
technologies like case-based reasoning
Technologies that facilitate routines include:
◦ expert systems
◦ enterprise resource planning systems
◦ traditional management information systems
Again,for both direction and routines, these
technologies can be implemented either:
◦ within an organization
◦ across organizations

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Illustrative Summary: KM Processes,
Mechanisms, and Technologies

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Any Questions?

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