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The Three Stages of Intellectual Capital Management

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The Knowledge Base and IT Infrastructure


The IT architecture of an organization should serve two major functions: (1) creation and man­agement of content, and (2) provision of technological enablers.


Content Management and the Knowledge Base. Content management42 involves creating con­tent, maintaining it, and using consistent taxonomy so that content created by a CoP or a subject matter expert can be properly stored and later retrieved by anyone in the organization. Content creation by various departments, business units, and CoPs results in divergent use of taxonomies and idiosyncratic approaches to content management. Many organizations find they have the information but cannot effectively retrieve it or, once retrieved, it is not understandable due to the divergent models used for their creation, defying assimilation of content with other departments. Add to that content received from external resources (e.g., subscriptions and customers' and sup­pliers' feedback). But streamlining content to make it comprehensible and accessible to those who need it is only part of the problem. The more critical challenge is weeding out old obsolete content, updating it and creating new content. Although central IT departments maintain the sys­tem and own the process for the whole organization, only subject matter experts can create new content relevant to local and business unit needs.


The practice of content creation and management was launched decades ago with the use of the first servers and increased digitalization. The KM concept, however, revolutionized content management by centralizing content management and decentralizing content creation to CoPs and subject matter experts. KM also transformed the substance of content creation and the archi­tecture of the IT system through the idea of the knowledge base. The knowledge base has the distinct goal and function of supporting business processes, and hence decision making, by pro­viding knowledge and not just information or data. A knowledge base is different from an infor­mation or database in two ways. First, it enables access to both explicit and tacit resources, with the goal of maximizing learning of users. To perform this, the explicit resources needed to carry out critical business processes are organized in the knowledge base in knowledge/content cen­ters by reference to the key decisions in the business process. The knowledge/content centers should have all the knowledge an employee needs to make a critical decision, plus learning tools and materials. Second, the knowledge base enables access to sources of tacit knowledge required to make key decisions, through expert directories. In that respect the knowledge base refers to CoPs, their areas of knowledge, how to contact them, and how to gain access to their content centers (see also about safe investments).


To create a knowledge base the taxonomies used should coincide with the critical knowledge creation processes it is designed to support. Taxonomies and classification systems should reflect the way users work, and thus follow the knowledge creation process. For the knowledge base to enable effective KM, the knowledge base's content should be classified in a way that resonates with the various stages in the critical business processes. Because critical business processes are specific to organizations, the design of the knowledge base should take into account how work is done. Therefore, the input of the end users, whose decisions and learning needs are being sup­ported by the knowledge base, is of absolute importance.


That being said, general classifications include grouping knowledge resources by reference to process, practice, topic area, or by reference to the decisions that need to be made. In some cases, organizations classify knowledge in terms of problems commonly faced and lessons learned. In all cases and regardless of the taxonomy and classification methodology used, the knowledge base should be developed with a clear vision of the common business problems or processes it is meant to support.


Once the knowledge base design is clear, then and only then can the organization examine the design of its IT infrastructure. All software programs have underlying models that control the progress and sequence of electronic applications and flow of information. If that model conflicts with the knowledge creation process underlying a certain business process or decision-making loop, it will both confuse and counteract the KM effort. In general, the IT infrastructure should at least enable the following applications for effective KM.


IT and Other Enablers.    Enablers of KM comprise technological and nontechnological tools designed to facilitate knowledge transfer, sharing, and conversion of knowledge from explicit to tacit and vice versa, with the main goal of promoting organizational learning. Technological tools should enable the following applications:


•   Retrieval of information through search tools.


•   Digestion and making sense of information through visualization and other tools that detect information patterns. Many tools have emerged in the past few years that enable the presentation of a vast volume of information and data in a comprehensible way through topographical maps and citation trees. The user is instantly able to detect con­centration of information in certain areas, as well as the referencing relationships between them.44


•   Location of experts through expert directories. Consultation companies first championed expert systems in which the need for tacit knowledge is greater, especially in companies that accept clients with unique needs and problems. Examples are Pricewaterhouse Coopers' Knowledge View software; Booz, Allen & Hamilton's Knowledge On-Line; andMcKinsey's Knowledge Resource Directory.


•   Communication tools, including document transfer capability. A multitude of tools are available mainly by e-mail through intranets, videoconferencing, and virtual centers. Many organizations have created virtual workplaces where employees can "meet" and share knowledge. Other organizations instead provide videoconferencing. In one case, videoconferencing was used to help solve a drilling problem in one of BP's remote sites, with reported savings of $270,000 that day alone.


Nontechnological Enablers. Enabling KM also involves the use of nontechnological tools and methods that accommodate the human/social aspect of tacit knowledge creation and transfer. Of course, CoPs, if looked at as a tool, are the best enablers for tacit knowledge transfer, particularly when face-to-face meetings are used. In addition, other tools are required (e.g., storytelling).