Agencies Companies Turn To: Knowledge Management

Agencies Companies Turn To: Knowledge Management<@VM>A Growing Interest<@VM>Changing the Rules<@VM>After the Sowing ...

By James Schultz

A decade ago, knowledge management as a formal discipline did not even exist. Now, for the private sector, it offers the prospect of boosting bottom-line gains by distilling and directly applying hard-won know-how.

For the public sector, stressed by the rapidly evolving demands of e-government and the difficulty in attracting and retaining skilled workers, knowledge management looks to be a lifesaver.

"The public sector is absolutely dependent on knowledge management," said French Caldwell, research director for knowledge management for Gartner-Group Inc. of Stamford, Conn. "There's a huge work force issue looming. Fifty percent will be eligible for retirement in 10 years. You're dealing with a work force that's rapidly disappearing.

"And their skills aren't keeping up with the demands of e-government," Caldwell said. "They're having a horrible time attracting and retaining qualified young employees."

As much philosophy as it is movement, knowledge management ? often referred to simply as KM ? is defined by most experts as the ability to get the right information to the right people at the right time.

This collection, storage and istribution of institutional expertise and information depends upon state-of-the-art technology, including next-generation databases, powerful browsers, advanced search engines, turbocharged document-management software and even artificial-intelligence-like, data mining "knowbots."

The need for robust new systems is driving an expected increase in KM spending in both the public and private sectors, according to a preliminary forecast issued in April by Dataquest, a research arm of the GartnerGroup.

Spending on KM is expected to grow 19 percent annually, during the next three years, with the most brisk business deriving from KM-related software maintenance and support, according to Dataquest. Systems integration is a close second. By 2003, overall KM expenditures should blossom to $5.4 billion, up from its current $3.4 billion.

Governments will account for about 30 percent of this spending, a Dataquest analyst said.

Knowledge management has been made possible because of the convergence of several primary technologies. Continuing advances in computing capacity allow for the stockpiling and analysis of enormous amounts of information, while products such as Lotus Notes are used widely by knowledge managers and KM-dedicated work groups.

But absent a means of rapidly accessing and sharing information, KM would be impossible. The fast maturation and increasing sophistication of the Internet has thus proven the key KM enabler.

Priscilla Emery, senior vice president of information products and services at the Association for Information and Image Management, Silver Spring, Md., said routine use of the Web will fundamentally change the way organizations operate.

"No. 1, you have to create a culture of sharing," she said. "Knowledge is power. [But] hold onto everything you know, and you can kill the power of the organization."
How to improve organizations by the application of knowledge management techniques was uppermost on the minds of some 400 attendees at a first-of-its-kind KM conference held last month in Alexandria, Va.

Of special interest was a new survey, the "State of the Knowledge Industry Progress Report," released at the conference by the Lighthouse Consulting Group. The survey included 300 people from federal agencies, the military and state and local governments, and found the primary reasons for implementing KM were to improve internal operations and customer service.

To those ends, agencies are spending money on upgrading software and hardware, up to $100 million in some cases, with the smallest investment at no less than $500,000. More than 40 percent of those polled said that their agency had appointed a chief knowledge officer or equivalent in a recognized position.

Although expertise sharing is crucial if government is to become more efficient in delivery of goods and services, federal agencies have prized the hoarding of knowledge. Success traditionally has not been measured in what was given away, but what was preserved.

The most current view, however, is that knowledge is a virtually infinite resource, its value increasing the more it is disseminated and applied. The task of knowledge managers thus becomes altering institutional inertia.

"In most agencies of the federal government, knowledge is power, not productivity," said Michael Yoemans, director of electronic business and knowledge management in the Office of the Secretary of Defense. "The first thing you have to deal with is the culture. You have to reward people for sharing what they know."

As does its sister agencies, the Defense Department has to contend with ongoing personnel issues. According to the Lighthouse Group KM report, the number of active duty Army soldiers has fallen from 780,000 in 1989 to 480,000 in 2000. Since 1989, the Army has supported close to 30 major deployments, compared to only 10 in a nearly 40-year span from 1950 to 1989.

The Army Knowledge Online initiative, a intranet portal, therefore is seen as an essential means of enhancing effectiveness in day-to-day operations by providing constant access to updated information and expertise. It was developed initially to enable senior officers to communicate quickly Armywide, but new uses continue to evolve.

For example, supervisory officers now can browse computerized sources to gather information for Officer Evaluation Reports, drastically cutting the time required by the earlier paper versions. The portal also is equipped with advanced search agents, which notify users of developments and news within their expressed field of expertise.

Similar efforts are being developed by the Navy and are being applied in virtually every military-connected endeavor, including training, logistics, medical service and intelligence analysis.

"The Department of Defense has 400 different businesses, large to small," Yoemans said. "The Army alone is a $60 billion organization. Each has knowledge bases they're only now creating. KM is in its infancy in the department. We're starting to crawl and walk before we can run."

Despite the real or perceived economic advantages of rapidly adopting knowledge-management techniques and technology, managers must first work on the corporate culture, according to Shereen Remez, chief knowledge officer for the General Services Administration and the first to hold that title within government. An agency risks a serious fall if it tries to run with the latest software upgrade or any other technology-based bell or whistle before handling the internal dynamics of its organization.

"I've seen too many companies go the technology route first. It doesn't work," she said. "You have to start thinking about the world in a wholly different way. In the past, the whole economy was built on developing products and services in a very efficient, mechanistic way. Today it's what you know that counts ? your expertise."

That is why her $14.5 billion agency is retooling the way it does business, both internally and externally. Financial incentives have been set up to reward those who identify ways of improving operations and then share that knowledge GSA-wide.

Employees are being encouraged to take advantage of the GSA's distance-learning curricula, which include hundreds of courses that are also offered, for a fee, to those outside the agency. A GSA information center has been created that, among other things, provides Web-page templates so individuals can create and maintain individualized home pages.

The GSA is applying knowledge
management techniques to improve
operational efficiencies in its four major business lines or services: public buildings, federal technology, federal supplies and policy. Supply forms have been computerized, there are repositories of expertise that can be queried, and the agency is putting together a KM portal that will provide real-time video streaming.

Nevertheless, as with any large company or organization, some GSA departments continue to accumulate knowledge resources independently, like a collection of unconnected silos, said Remez.

"The left silo does not know what the right silo is doing," she said. "One of the ways knowledge management is helping us is to break down those silos, so that we work horizontally rather than vertically. Working in a virtual matrix is a very different way of exchanging knowledge."Most knowledge managers appear to agree that if KM is to affect the way agencies and business operate, individuals must have a stake in the outcome.

"Everyone in a company listens to the same radio station: WII-FM, or what's in it for me," said Susan Hanley, director of knowledge management for American Management Systems Inc. in Fairfax, Va. AMS is an international business and IT consulting firm, one of the 20 largest such firms worldwide.

"Incentives are important. What we've built is the concept of knowledge leverage and that your knowledge contribution makes you valuable to the organization," Hanley said. Time was at her company that if you wanted crucial information, you would head for the coffee-break room ? not just to drink, but to network to find the right person whose experience and knowledge you would recruit to a given project.

These days, that expertise is made available to employees on AMS' Knowledge Centers, computerized repositories of expertise, best practices and leading-edge technologies.

Routine desktop access is provided by the firm's Knowledge Express databases, which include more than 10 gigabytes of data and are accessible to AMS staff worldwide. The company's AMS Know is a dial-up service, staffed by reference librarians who track down requested information and track and collate additions and upgrades.

Hanley said she hopes eventually to provide routine, real-time video to each of the company's 8,000 employees in each of its 57 offices. Also planned is an active-knowledge search engine to monitor documents in process while browsing the Internet and company intranets to suggest additional sources and provide on-demand information updates.

"The trend is to make all these technologies transparent in our daily work," Hanley said.

Another intriguing trend is the use of KM to build trading communities, collections of companies and their suppliers in a given field whose economic interests are served by close collaboration, said GartnerGroup research director Caldwell. Several prominent examples include the steel, auto and chemical industries, but other concerns large and small may eventually participate as well.

"Knowledge management is different from information management," said Dan Holtshouse, director of corporate strategy for Xerox Corp., Stamford, Conn. "Knowledge management is about adding actionable value to information. It's all about enabling action. You systematically leverage skills and core competencies and turn them into product. The market is very unforgiving if you miss a beat."

In Xerox's case, development of its Eureka "smart service" system has enabled repair technicians to have instant access to a database of problem-solving tips, saving the company $8 million and improving customer satisfaction.

Another Xerox KM creation, an intranet known as the Vine, collects, collates and distributes information on the company's 60-plus products, the expertise of its 4,500 employees and the details of a variety of Xerox-sponsored programs.
How much fruit such KM efforts will bear is as yet unclear. Some believe it is impossible to determine a dollars-and-cents return on KM investment. Others can point to discrete savings and anticipate strong, KM-attributable growth in revenue.

What does seem clear is that the emerging field of knowledge management ? a serendipitous intersection of technology, organizational need and individual desire ? has changed, at least for the near future, the rules and perception of organizational development.

"What makes knowledge management different from re-engineering and downsizing is that they were about taking resources, doing less with less," the Defense Department's Yoemans said.

"What knowledge management enables us to do is regain productivity by really making use of the power of technologies just coming to fruition," Yoemans said. "We're beginning to create repositories of knowledge and make that knowledge directly available, either to an extranet and the general public, or to an intranet, inside the organization."

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