Building Knowledge Management (KM) Systems in Organizations

“KM is more of a strategy supported by Information Technology (IT) that can show a quantifiable and sometimes substantial return on investment” (MacSweeney, 2002). Knowledge needs to be put at the fingertips of people within an organization i.e. readily available to everyone in an organization. This should not only be available but ease of use is very important. It needs to be the culture of the organization to use the knowledge available either by IT or collaboration. It needs to be enabled for users internally.

Buyers and customers need to be educated as with Armonk insurance company: with the use of the internet, products are described online, as well as coverage type, liability, background process for rating etc. Applying this scenario to Albion (organization for group coursework), the use of the internet for buyers, garment technologists and customers may prove to be a beneficial KM strategy in the organization (MacSweeney, 2002).

MacSweeney (2002) suggests that the focus of a knowledge strategy can either be inward or outward, either way the strategy should not be Information Technology (IT) driven but IT can support a strategy. He further purports that to have a successful KM strategy, the business community has to be involved from the inception and sponsorship from business executives in essential.

Role of IT in Supporting Knowledge Management (KM)

Case Study (Laudon and Laudon 2006)

Content Management Systems as an IT support for KM: Southern Company is an organization that generates electricity for over 4 million people in the United States of America.

The introduction of documentum system (content management system) cut down search time for essential documents and processes to 10 minutes from 2 hours and also increased the success in locating current content to 90% from 50%.

Another benefit that the IT supported knowledge management system brought to Southern Company was the helped to be more prepared for the hurricane Katrina compared to other organizations in that they were able to copy to disk critical drawings/plans and other information allowing those workers that are field based with laptops to retrieve much needed information thereby enabling them to restore energy to their users.

Southern Company’s energy restoration to their users was accomplished in 1 day and 20 hours compared to their competitors restoration time that averaged 3 days and 5 hours.

The above benefits show how efficient and effective an organization can be if KM is supported by IT. It also shows that Southern Company can gain competitive advantage by delivering faster than their competitors.

Problems Faced by Southern Company:
Document intensive i.e. piles of documents to go through before reaching the needed document(s)

• Fragmented information in legacy system i.e. a lot of legacy systems holding different forms of information
• Manual processes: so many paper based forms to fill and manual processes to follow.

Ideal situation:

• Reduced paper based documentation

• Consolidated information in one accessible system

• Automated processes

Results:

• Reduce cost: saving in the long-run on man hours regarding searching for information, designs, processes etc.
• Reduced time: to complete processes of energy restoration i.e. the knowledge required to restore energy, to find documents, to find information or content
• Competitive advantage gained through cost and time reduction
  

References:
Laudon, K., Laudon, J. (2006). Management Information Systems: Manging the Digital Firm (10^th Edition) p14
MacSweeney G., (2002). The Knowledge Management Payback. Insurance and Technology May 6, 2002

Albion Fabric Employees: Sources of internal knowledge to create competitive advantage.

Sources of knowledge for organisation are from many channels mainly internal and external. Both sources need to be manipulated and exploited for business processes to be redefined so that these activities will create competitive advantage for an organisation.
My focus here is on internal sources of knowledge. In the case of Albion Fabrics, from the sociological viewpoint, I believe apart from competitors and external forces, employees of Albion Fabrics are the major knowledge and information sources. Within its many activities Albion Fabrics may capture both information and knowledge from its competitors and external organisations but the knowledge capturing process will be a more added value activity to the customer and organisation because the knowledge itself is in essence “information” as well as information on “how” the information is going to be beneficial to the strategic activities that will bring competitive advantage to Albion Fabrics.

Many strategic activities involved in creating knowledge have been practically linked to real differentiation in the marketplace. For example Yli-Renko et al. (2001) have produced research findings that indicate that knowledge acquisition and creation is strongly correlated with knowledge exploitation for competitive advantage (Yli-Renko et al. 2001). This means that Albion Fabrics should move forward in a purposeful manner as its objective to capture knowledge with the potential for exploitation that will help gain its competitive advantage. "AF" needs to focus on capturing knowledge that is crucial in its current and future needs so that it will harness methods of sustaining its competitiveness edge from strategic point of view.

Employees of "AF "come from diverse backgrounds, experiences and ways of working and abilities. This diversity brings potential to generation of strategic methods of achieving this organisation’s objectives. Collaboration of "AF" employees will begin the process of transforming tacit knowledge into explicit knowledge. We learnt that knowledge sharing and "learning" is created when tacit knowledge is transformed into explicit knowledge. Employees will learn from the socialising activities with each other. Learnt practices and methods have good potential of moving towards creating competitive advantage. I speculate that AF will need to create better methods of engaging its employees in socialising and collaboration as one of its strategic objectives. I shall focus on how this and other objectives will be met for AF in my later posts.

Reference:
Yli-Renko, H., Autio, E., & Sapienza, H.J. (2001). Social capital, knowledge acquisitions, and knowledge exploitation in young technology-based firms. Strategic Management Journal, 22 (6), 587-613.

KM and Competitive Advantage

The relevance of knowledge management to organizational strategy is based on missed opportunities, operational inefficiencies and time lost which all show severe competitive disadvantage. Knowledge management is regarded as playing a key role in ensuring business edge or competitive advantage through the capturing and sharing of experience and information. People are an important element in managing knowledge, as individuals own knowledge. This therefore implies that people must be willing to share their knowledge, to learn from others and the culture of the enterprise must be conducive and encourage knowledge sharing. The importance of knowledge management is that it could be a source for sustainable competitive advantage or business edge. Knowledge plays an important role in the success of any enterprise. Knowing the economic value of an organization’s knowledge is a necessary precondition before any knowledge management leader can begin to manage the function strategically. Knowledge is now a crucial factor underpinning economic growth. Producing goods and services with high value added is at the core of improving economic performance and international competitiveness, increasing intangible investment, which is difficult to measure, has become the measure issue for organizations. This information is a necessary starting point for any knowledge management leader to act as a strategic partner.

A number of organizations rely heavily on innovation and product development hence their research and development scientists require relevant, up to date and accurate information as development of successful new products is the major factor that distinguishes these businesses from competitors. Service oriented enterprises require a lot of information about their clientele and new ideas on how to serve the customer better. Their competitive advantage can only come through an efficient, friendly service that makes their customers come around again. Similarly, while all knowledge management activities are important, some provide greater leverage for competitive advantage. Therefore, knowledge management leaders must first understand the role of knowledge management as a source of competitive advantage before being able to make decisions about how to position the deliverables of the function. This leads to the following questions for these executives:

•On what basis is the enterprise seeking to distinguish itself from competitors? .Is the organisation based on innovation, customer service or production efficiency?

•Where in the value chain is the greatest leverage for achieving this differentiation?

•Which knowledge management activities provide the greatest potential to differentiate an enterprise from its competitors?

Once the knowledge management leader understands the specific ways in which knowledge provides value, it is necessary to examine the value that knowledge management provides or can provide. There are two ways in which knowledge management can provide economic impact. Firstly, knowledge management practices are important levers by which the organisation develops the intellectual capital and employee efficiency and innovation. It is the knowledge management practices that can directly influence the effectiveness, allowing employees to perform their work smarter and thus providing value to the organisation. The knowledge management practices can also help to develop knowledge-enabled employees who are willing to make value-adding decisions and contributions towards meeting objectives of the enterprise. In other words, knowledge management practices play an important role in developing the knowledge assets that provide a competitive advantage.

Reference:
Barney, J., 1995. Looking inside for competitive advantage. Academy of Management Executive 9 4, pp. 49–61.
Campbell, A., & Luchs, K. S. (Eds). (1997). Core competency-based strategy. London:
International Thomson Business Press.

Potential organisation for coursework 2

Introduction

This is an idea for an organisation to be used for coursework 2. First of all because we do not have the permission of the company I have decided to use different names for the company and any clients to allow anonymity and protect the company’s interests.

Background

We can call the company Albion Fabrics Ltd and they are a clothing supplier based in London. There main business is to supply a range of children’s, ladies and men’s clothing to a number of high street stores and supermarkets. These items may then be used under the store’s own brand labels or as individual clothing ranges. The process works in one of two ways.
• The organisation designs clothes in-house and then sells the designs on to a retailer who will commission a number of clothing items to be made.
• The organisation receives designs for a range of clothes from a retailer and is instructed to create a specified number of garments.
In each case a retailer will expect the garment to:
• Be made in compliance with industry standard rules and regulations such as . This is especially important when dealing with baby garments and clothing for young children.
• Comply with the retailers own sizing specifications. Some of you may already be aware that the measurements for a size 10 ladies dress can alter dependant on what store you purchase it from.
• Be constructed using ethical practices when using factories both home and abroad
• Be properly tested in terms of wash care and fabric stress testing etc.

• Arrive on time!
The retailer will also expect orders and information about a style to be presented in their own propriety format. There are other issues but we can consider these the main areas.


Staff

The mainstay of the organisational workforce consists of garment technologists (GT) and buyers.
A GT ensures quality and fit of the garment within price range given by the buyer. The GT may ask for alterations to be made such as an extended hem line to improve the quality of the garment and will then will negotiate the best way to achieve this within the given price range
Buyer: negotiate prices for a particular style both with a factory and the customer. They also collect competitor information and look for new designs outside of the organisation that they can buy to sell on to retailers.
Staff are split predominantly into 5 teams with each team being associated with one of their 5 main customers. A team will consist of buyers a senior GT, and a varying number of GT’s.
Buyers are located in a different area of the office to the GT’s. A senior GT and the other GT’s within a team sit on a group of tables together.
Staff may need to give support to an alternative team if workload is high.

Products
The industry tends to produce garments in two main blocks that the call seasons: spring /summer and autumn/winter
Albion Fabrics has 5 main customers and there can be as many as 200 styles in a spring / summer collection and 180 styles in a autumn /winter collection for each customer

Technology
All staff have access to a networked computer system although Internet usage is not available on the floor where the teams are situated. The pc’s currently have ms office and e-mail and some propriety software.

Main issues
Training new staff: such as how to measure, fabrics and performances. i.e difference between fabrics construction and yarn
Comparing and sharing information on factories: problems and performances, new manufacturing processes, new fabrics, general fashion industry info.
Keeping up to date on new rules and regulations and changes in preferences from retailers.
Keeping up to date with rules and regulationss for other teams if need arises to work with another team for a short period.
Time is always tight to get orders ready for customers so little time for discussions and meetings

Current Practices

Informal discussions
Monthly or Bi –monthly combined team meetings usually focused on progress of orders with factories as all teams will tend to use a proportion of the same factories but for different customers.