Knowledge Management and the Best Business: the Main Aspects Regarding the KM Technology - Research Paper Example

Summary Present age is the age of digital economy that is purely based on effective business knowledge and its basic intention is to strengthen the corporate performance. Additionally, at present, the focus of corporations is moving from the organization of assets and materials to the information resources management, since the customary competitive environment of corporations is based on their capability of taking well-organized and efficient decisions. Therefore, it can be said that the knowledge management frameworks are vital for a corporation to identify efficient utilization of the organizational assets (Nonaka, 2005; Sunassee & Sewry, 2003). This paper presents a detailed analysis of the knowledge management paradigm, its business implementation and potential advantages. Additionally, this paper will also assess the implementation of the knowledge management to the PC-Mart business. In this scenario, PC-Mart is a medium size corporation which deals in the personal computers of different brands. The business is having a chain of connected stores with a central head office in New York. In addition, currently, the corporation is running its business through the traditional business practice without having the capabilities of business analysis and decision making. This paper will also present some recommendations to improve the traditional business practice through new technology based knowledge management arrangement. Knowledge Management The term knowledge management encompasses various attributes such as data, information and knowledge. Data are collection of unrefined facts demonstrating events occurring in corporations or the physical environment before they have been refined and organized into a form that people can identify and make use of it. And information is collection of data that have been changed into a structure that is useful and serviceable to human beings (Laudon & Laudon, 1999, p. 7; Norton, 2001, p. 4). Finally, the knowledge is a collection of data and/or information that have been transformed and processed to offer understanding, experience, learning, and expertise as they apply to a current situation or job. Moreover, the data that are processed to recover important ideas and to reveal past expertise and experiences present the management with organizational knowledge, which is very helpful and precious (Turban, Leidner, McLean, & Wetherbe, 2005, p. 51). According to (Alwis & Hartmann, 2008), the researchers and managers have acknowledged knowledge as a most important source of competitive advantage. Additionally, the knowledge is a potentially most important asset to the corporation as it can hold precious, unusual, unique and non-substitutable features mainly if it has a tacit aspect. In addition, the growing significance of knowledge in modern environment demands for a change in people’s (managers) views regarding modernism in corporations, either it is product or process modernism, technical modernism, strategic or organizational modernism. However, it raises various questions such as how corporations generate new or innovative knowledge and, more notably, how they move new knowledge. The solution is knowledge management (Alwis & Hartmann, 2008). Organizing the data, information, and knowledge inside the corporation as well as making use of it to get a competitive advantage in a corporation has developed into the field of knowledge management. “Knowledge management supports an integrated idea to recognizing, storing, accessing, distributing, and assessing a corporation’s information assets”. Additionally, these information assets can encompass documents, databases, policies, actions, and events, in addition to the un-captured unstated knowledge and experience stored in individual employees’ heads (Hicks, Dattero, & Galup, 2006; Randeree, 2006). In simple words, the knowledge management (KM) is a procedure that helps organizations identify, choose, systemize, distribute, and convey valuable and functional skills or information that belong to the corporation’s memory as well as normally exist within the corporation in a unstructured manner. In addition, this formation of knowledge helps in competent and effective decision making, strategic planning, problem solving and dynamic learning. On the other hand, the focus of knowledge management remains on identifying functional knowledge, and maintain the knowledge in a suitable way so that it becomes easy to maintain its worth with recycle, and it could be distributed in an effective manner. In addition, through the contemporary information technology and a supportive organizational environment, an organization can convey its whole knowledge and organizational memory to deal with any issue at anytime and anywhere in the world. Therefore, for the success of organizations, knowledge, in the form of capital, must be transferable among persons as well as it must be developed continuously. In addition, knowledge regarding problem solving can be maintained, in this way, knowledge management can encourage or support organizational learning, leading to more knowledge development (Turban, Leidner, McLean, & Wetherbe, 2005, p. 451). The term “knowledge management” is not a fresh concept for the reason that wealthy organizations have for all time made use of intellectual assets and recognized their importance. However, these efforts were not logical or organized, as well as they did not make sure that knowledge attained was distributed appropriately for maximum organizational advantage. Moreover, sources for instance, IBM, Forrester Research, and Merrill Lynch estimate that approximately 80% of a corporation’s knowledge assets are not stored in relational databases, however are stored in, spreadsheets, word documents, e-mail, and presentations on individual computers (Turban, Leidner, McLean, & Wetherbe, 2005, p. 451). Why Organizations need knowledge management? A lot of organizations are presently moving toward achieving better knowledge management. Here a main question appears why they need or use knowledge management. In this scenario Nonaka (2005) discuss a few aspects that can answer this question (Nonaka, 2005; Call, 2005; Perez & Pablos, 2003): Organizations need knowledge management because the competitive pressures have decreased the size of the work force that holds important business knowledge. Knowledge management is necessary because marketplaces are more and more competitive as well as the rate of innovation is growing. Organizations are more interested in knowledge management because of reductions in staffing create need to replace informal knowledge with formal techniques. Increasing mobility and early retirements of the work force direct to loss of knowledge and implementation of knowledge management technology to facilitate the business to keep its knowledge safe The amount of time available to experience as well as collect knowledge has diminished so there is need for knowledge management technology since it offers rapid response. Transformation in strategic direction can result in the failure of knowledge in a specific area but the establishment of the knowledge management technology can minimize this danger to a greater extent. There is need to handle growing complexity as small size businesses are transnational sourcing operations. With present knowledge management technology organizations can handle business in a better way because of the following reasons that are stated by the (Darroch, 2005): Businesses are competing on the basis of knowledge. The majority of present corporations’ working is based on information. Business services and products are more and more complex, endowing them by means of a considerable information component. Need for life-long learning is an inevitable reality. Achieving competitive advantage through Organizational knowledge The present age is age of technology and businesses are now implementing new technology based systems to gain advantages of the business information in a better way. Davis, Subrahmanian, & Westerberg (2005) stated that in a business context, data represents values of results or facts, as well as relations among data and other relations have the capability to take information. Additionally, the patterns of relations of information and data and other patterns have the capability to take knowledge. In addition, the value of knowledge management linked to the business effectiveness through controlled knowledge facilitates the members of the organization to deal with today's situations as well as successfully visualize and make their future (Davis, Subrahmanian, & Westerberg, 2005). In this scenario, Darroch (2005) outlined that knowledge management techniques in a corporation is about treating the knowledge component of business tasks like a explicit concern of business revealed in policy, strategy as well as practice at the entire stages of the organization. In addition, by implementing knowledge management techniques at corporation management expects potential enhancement in the business working. In this way the management has much better business analysis and decision making capabilities that leads to better business competitive edge. This all leads toward achieving the positive business outcomes. In effective business practice, knowledge management frequently includes mapping and identifying intellectual assets inside the business, generating new knowledge for competitive advantage inside the business, developing huge amounts of business information available for working, sharing most excellent business practices and technology that facilitates the entire business decision making (Darroch, 2005; Gao, Li, & Clarke, 2008). Business Application areas for knowledge management According to Nonaka (2005), applying knowledge management to business work is essential to the majority of business activities. In this regard the knowledge management is applied to lots of areas of businesses and organizations. Some of main areas are given below (Nonaka, 2005): Best management practices Change management Benchmarking Risk management A major part of the business community considers knowledge management as a normal extension of "business procedures reengineering". Additionally, this is a major fact that is underscored through the recent knowledge management and implementation researches. There is a widespread thread among knowledge management paradigm and other recent business strategies: An acknowledgment that information and knowledge is corporate assets, and businesses need policies, strategies, and tools to handle those assets. However, the need to handle knowledge seems obvious, and planning of intellectual capital has grown. In addition, few businesses have performed on that understanding. Moreover, a number of efforts focus on developing creativity, which involves producing new knowledge value, as other programs highlight leveraging existing knowledge (Nonaka, 2005; Turban, Leidner, McLean, & Wetherbe, 2005). Information Technology for KM This section presents some of the main aspects regarding the knowledge management and its implementation in information technology based systems. In this scenario Edwards, Shaw, & Collier (2005) stated that there are a lot of IT applications incorporating knowledge management technique, however the early days of KM there has been a particular stream of thinking that stress the utilization of KBS (knowledge-based systems) regarding the establishment of the software in KM. After that one of main technology regarding the business knowledge management emerged was expert system that has played a vital role in institutional memory, for the reason that of their capability to capture business rules. It is obvious that expert systems or KBS (knowledge-based systems) software, and artificial intelligence (AI) software more commonly employed and does have a role to play in sustaining knowledge management technology software. Below given table outlines different technologies and tools for the KM: (Edwards, Shaw, & Collier, 2005) Image Source: Edwards, Shaw, & Collier (2005) Recommendations of KM for PC-Mart The present business practice is functional through the traditional business decision making technology and resource handling. In scenario of KM implementation Edwards, Shaw, & Collier (2005) stated that tacit knowledge performs a significant role in all the phases of the innovation development in the business. It is clear that in the early stages of the innovation process, (generation and idea discovery), the level of intangibility is high. However, it is able to consequently be implicit that tacit knowledge and its transfer in the start phases of the innovation development plays a significant role (Edwards, Shaw, & Collier, 2005). In scenario of new technology of KM at PC-Mart, the transformation and implementation stages of ideas in the innovation process were reduced substantially in the course of the transfer and application of suitable business tacit knowledge. As well, the intuitive control of the different options before the real test phase starts, guides to a process-acceleration outcomes in the innovation process. It demonstrates that with appropriate tacit knowledge management, upcoming problems are resolved in a flexible way as well as in all the stages of the innovation process proper transfer of tacit knowledge is of enormous significance for the success of business innovation for the PC-Mart (Alwis & Hartmann, 2008). In case of new technology implementation at the PC-Mart business, the business will have much better technology that will facilitate the business in following ways: Better business information management Effective decision support Rapid decision making process Fast response to main business problem Critical analysis of the business risks Enhanced management of main business risks On time business reaction Conclusion Knowledge management (KM) is a technique that helps corporations identify, choose, systemize, distribute, and convey valuable and functional skills or information that belong to the corporation’s memory as well as normally exist within the corporation in a unstructured manner. The KM technology promises best business management and handling. In case of PC-Mart business effective results are expected. This paper has presented a detailed analysis of KM technology and implementations. This paper has outlined a detailed overview of some of main aspects regarding the KM technology and its potential advantages to business. This research has also recommended some KM technology factors. Bibliography Alwis, R. S.-d., & Hartmann, E. (2008). The use of tacit knowledge within innovative companies: knowledge management in innovative enterprises. Journal of Knowledge Management Volume 12, Issue 1, pp. 133-147. Call, D. (2005). Knowledge management – not rocket science. Journal of Knowledge Management Voume 9. Issue 2, pp. 19-30. Darroch, J. (2005). Knowledge management, innovation and firm performance. Journal of Knowledge Management Volume 9, Issue 3, pp. 101-115. Davis, J. G., Subrahmanian, E., & Westerberg, A. W. (2005). The “global” and the “local” in knowledge management. Journal of Knowledge Management Volume 9, Issue 1, pp. 101-112. Edwards, J. S., Shaw, D., & Collier, P. M. (2005). Knowledge management systems: finding a way with technology. Journal of Knowledge Management Volume 9, Issue 1, pp. 113-125. Gao, F., Li, M., & Clarke, S. (2008). Knowledge, management, and knowledge management in business operations. Journal of Knowledge Management Volume 12, Issue 2, pp. 3-17. Hicks, R. C., Dattero, R., & Galup, S. D. (2006). The five-tier knowledge management hierarchy. Journal of Knowledge Management Volume 10, Issue 1, pp. 19-31. Laudon, K. C., & Laudon, J. P. (1999). Management Information Systems, Sixth Edition. New Jersey: Prentice Hall . Nonaka, I. (2005). Knowledge management: critical perspectives on business and management. England: Academic Conferences Pvt. Ltd. Norton, P. (2001). Introduction to Computers, Fourth Edition. Singapore: McGraw-Hill. Perez, J. R., & Pablos, P. O. (2003). Knowledge management and organizational competitiveness: a framework for human capital analysis. Journal of Knowledge Management Voume 7 Issue 3, pp. 82-91. Randeree, E. (2006). Knowledge management: securing the future. Journal of Knowledge Management Voume 10, Issue 4, pp. 145-156. Sunassee, N. N., & Sewry, D. A. (2003). An investigation of knowledge management implementation strategies. SAICSIT; Vol. 47, Proceedings of the 2003 annual research conference of the South African institute of computer scientists and information technologists on Enablement through technology (pp. 24-36). South African Institute for Computer Scientists and Information Technologists, Republic of South Africa . Turban, E., Leidner, D., McLean, E., & Wetherbe, J. (2005). Information Technology for Management: Transforming Organizations in the Digital Economy . New York: Wiley. Read More