Information Technology and Knowledge Management - Dissertation Example

Literature Review:    Information Technology and Knowledge Management Information Technology & Knowledge Management “Knowledge is a fluid mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information” (Kim & Lee, 2004, p.2). Knowledge is bursting from all corners virtually in every second and all life segments are undergoing drastic changes as time goes on. Information technology or IT is one area in which new knowledge is emerging out rapidly. Knowledge management is becoming a big problem in IT because of the rapid evolution of new knowledge. Different IT organizations follow different knowledge management strategies because of the differences in the knowledge type and the competence of the companies. The major objective of knowledge management in IT organizations is to improve the company performances in the heavily competitive business world. Because of the complexities and diverse data handled by different companies, it is difficult to give a standard definition to Knowledge management. Poorebrahimi et al.( 2012) have summarised many of the popular definitions given to KM by prominent scholars, in their article “Prioritizing Knowledge Management Models in Information Technology Companies Depending on Science and Technology Parks based on ANP; A Case Study in Iran”, published in the European Journal of Economics. KM is to discover, develop, utilize, deliver, and absorb knowledge inside and outside the organization through an appropriate management process to meet current and future needs. KM is the process through which organizations extract value from their intellectual assets. KM has been recognized as one of the most critical factors for attaining organizational competitive advantage. The major goal of KM implementation is frequently to accrue maximum benefit and achieve competitiveness (Poorebrahimi et al., 2012, p.23). On the other hand, Egbu & Botterill (2001), described the purpose of KM in organizations. They have pointed out that “KM should be understood to mean the processes by which knowledge is created, acquired, communicated, shared, applied and effectively utilized and managed, in order to meet existing and emerging needs, to identify and exploit existing and acquired knowledge assets” (Egbu & Botterill 2001, p.126) Information technology is one field in which KM plays an important role in the making or breaking of a company. It should be noted that all IT companies are striving for KM to increase their competitive power and brand value in the heavily competitive IT business world. No It company can survive in this world without updating their knowledge. In fact, the ability to update knowledge works positively in the development of an IT company. This paper analyses the literature to know more about the importance of knowledge management in Information technology industry. Literature Review: Knowledge management in IT industry Mvungi and Jay (n.d) divided KM in IT into three different stages; 1) a stage of KM driven by IT, the Internet, best practices, and knowledge sharing; 2) a stage focusing on human factors, organizational learning, and knowledge creation among tacit and explicit knowledge and 3) a stage focussing on the arrangement and management of content through taxonomy construction and use(Mvungi and Jay, n.d., p.354). All these three stages may undergo two basic approaches; codification and personalization. With the codification approach, more explicit and structured knowledge is codified and stored in knowledge bases. The main role of IT here is to help people share knowledge through common storage so as to achieve economic reuse of knowledge. With the personalization approach, more tacit and unstructured knowledge is shared largely through direct personal communication. The main role of IT here is to help people locate each other and communicate so as to achieve complex knowledge transfer. Examples of such IT tools are knowledge expert directories and video-conferencing tools (Kankanhalli, et al., n.d., p.2) Working on the above principles, different scholars proposed different models of KM for IT industry to enhance the performances of IT organizations. Some of the popular KM models in IT are; Boisot Model, Hales Model, Nonaka Model, O’Dell and Grayson Model, Blumentritt& Johnston Model, Gottschalk Model Beckman Model, Bukowitz and Williams model and Bouthillier and Shearer Model Boisot Model Boisot model of KM depend on three factors; codification, abstraction, and diffusion. “Codification refers to the way we make use of explicit knowledge. In a general formulation, codification is a process by which we create conceptual categories that facilitate the classification of events and phenomena” (Poorebrahimi et al., 2012, p.24). Dalkir (2005) mentioned about the management of information and data in Boisot model. He has pointed out how Boisot model distinguishes information from data. “Information is what an observer will extract from data as a function of his or her expectation or prior knowledge. Effective knowledge sharing requires that senders and receivers share the context as well as the coding scheme”( Dalkir, 2005, p.66). In Boisot model of KM, the abstraction dimension is linked to knowledge creation through analysis and understanding whereas diffusion is linked to information access and transfer (Dalkir 2005, p.66). The process of creation of data from information can be considered as abstraction according to Boisot model of KM. Information and data are quite often used interchangeably. But both information and data are entirely different things. If information is the raw material, data will be the finished good. In fact, the processing of data gives information. If data are the building blocks, then information is the finished house. In short, information becomes meaningful only when it attains the form of data. Logical thinking or critical thinking is necessary for the interpretation of the information and the creation of data. Boisot model stresses the importance of sharing of data in KM. Diffusion is the process of supplying the data to various departments in an organization. “The effective movement of information goods is largely dependent on senders and receivers sharing the same coding scheme and language. A knowledge good is one that also possess context within which it can be interpreted” (Dalkir, 2005, p.66). B Boisot model argues that the difficulty levels in the diffusion of the data depends on the easiness in structuring and conversion of information into data. In other words, it is difficult to diffuse complicated data or information whereas it is easy to diffuse simple data and information. “The more easily data can be structured and converted into information, the more diffusible it becomes” (Dalkir, 2005, p.66). Hales Model “This model has emphasis on process of knowledge. Hales model has presented and proposed six strategies for different situation: Search for new knowledge, Learning, Saving, Distribution, Deleted not important knowledge and Implementing” (Poorebrahimi et al., 2012, p.26). Hales model argues that it is impossible for knowledge to evolve from vacuum. Search is the process, which is required to find out new and existing knowledge. Like Boisit model, Hales model also stresses the importance of distribution of knowledge in KM. Since the importance or value of knowledge may vary from person to person or organization to organization, it is necessary to save important knowledge while deleting unwanted knowledge. Nonaka Model Basically, this model contains three main structures: the SECI model, the Ba shared context, and the knowledge assets platform. From philosophical point of view, this model has an epistemological dimension and an ontological dimension. The epistemological dimension is exploited in the four stage process known as SECI: Socialization –Externalization – Combination – Internalization. Each stage represents a cornerstone of the operational knowledge dynamics. “The essence of Ba is the contexts and the meanings that are shared and created through interactions which occur at a specific time and in a specific space, rather than a space itself. Ba also means relationships of those who are at the specific time and the specific space”. Knowledge assets are intangible resources that contribute to value creation. They can be inputs or outputs of the SECI process (Poorebrahimi et al., 2012, p.24). Dr. Nonaka defined KM as a spiral process starting from a 2x2 matrix (a matrix with two rows and two columns). He has pointed out that the existing knowledge can be either tacit or explicit and therefore each mode of knowledge transfer operates differently. Moreover, each type of knowledge can be converted into different forms for the continuous learning process. The process that transfers tacit knowledge in one person to tacit knowledge in another person is socialization (Dr. Nonaka, 1997). The process for making tacit knowledge explicit is externalization. One case is the articulation of one’s own tacit knowledge - ideas or images in words, metaphors, analogies. A second case is eliciting and translating the tacit knowledge of others - customer, experts for example - into a readily understandable form,. Dialogue is an important means for both. During such face-to-face communication people share beliefs and learn how to better articulate their thinking, though instantaneous feedback and the simultaneous exchange of ideas. Externalization is a process among individuals within a group. Once knowledge is explicit, it can be transferred as explicit knowledge through a process Nonaka calls combination. This is the area where information technology is most helpful, because explicit knowledge can be conveyed in documents, email, databases, as well as through meetings and briefings (Dr. Nonaka, 1997). Borghoff & Pareschi (1997) have defined explicit knowledge and tacit knowledge in a clearer manner. They pointed out that explicit knowledge is nothing but formal knowledge. It can be converted to information whenever needed. It is found in the documents of an organization: reports, articles, manuals, patents, pictures, images, video, sound, software etc. On the other hand, tacit knowledge is personal knowledge associated with personal experience. It can be shared verbally and nonverbally through direct eye to eye contact. Compared to Explicit knowledge, tacit knowledge can be communicated more effectively. All explicit knowledge needs some kind of processing to convert it into tacit knowledge. Since explicit knowledge is indirect, it requires some kind of coding and decoding to convert it into tacit knowledge (Borghoff & Pareschi, 1997, p.2). In IT companies, interactions between the employees and the customers provide the necessary socialization needed for tacit knowledge transfer (Dr. Nonaka, 1997). Knowledge may achieve more power when it is shared and discussed between different types of people. An unshared knowledge is just like a dead body. Socialization is the process which provides life to knowledge There are several similarities between Nonaka’s and Boisot’s knowledge management models. First, Boisot’s codified and uncodified knowledge has some degree of similarity with Nonaka’s category of tacit and explicit knowledge. Second, both models assume that there is a spread or diffusion of knowledge across the organizations as indicated by the horizontal dimension of the model. Finally, in correspondence with Boisot’s model, Nonaka’s tacit and explicit knowledge are two separate categories of knowledge (Haslind & Sarinah, 2009, p.190) O’Dell and Grayson Model O’Dell and Grayson (1998) highlighted the lack of time as a common sharing barrier, concluding that even though managers are aware of the benefits of knowledge sharing, they often struggle to implement it due to time constraints. Time restrictions are also a reason why people may potentially (Poorebrahimi et al., 2012, p.25-26). O’Dell and Grayson Model argues that “trust and openness in organizational culture promote employees’ active knowledge management behaviours. Communications, dialogue, and interaction between individuals or groups are important to support and to encourage employees’ knowledge-related activities” (Kim & Lee, 2004, p.2). This model stresses the importance of strong cooperation and associations among employees and customers necessary for the effective implementation of KM in IT organizations. It describes that an employee may share his knowledge only to his trusted friends or colleagues. Blumentritt& Johnston Model According to Blumentritt and Johnston (1999) KM has been concerned with knowledge creation, acquisition and flow. In their framework of knowledge management, there is an increasing level of difficulty associated with transforming knowledge into information. They challenge the contention that IS may be used interchangeably with KM systems. Instead, they argue that knowledge can only exist within the mind of the individual Blumentritt & Johnston argued that the right knowledge has to be found, retrieved and absorbed. Searching is a significant issue if there is a large amount of knowledge available and the right knowledge becomes difficult to find. Identifying potentially valuable knowledge is of importance, since a huge amount of knowledge stored will eventually lack trust of people (Poorebrahimi et al., 2012, p.25). Blumentritt & Johnston pointed out that the recognition of the knowledge as the key to competitive advantage is raising many issues for the corporate world. Managers are accustomed to assembling tangible, physical, financial and human resources and competing on price, quality and customer service (Rollo, 2002, p.4). Gottschalk Model According to Gottschalk Model, there are four stages in KM in IT organizations. The first stage is general IT support for knowledge workers which includes word processing, spreadsheets, and email. The second stage is information about knowledge sources. A typical example is the company intranet. The third stage is information representing knowledge. A typical example is a database. The fourth and final stage is information processing. A typical example here is an expert system (Poorebrahimi et al., 2012, p.25). Gottschalk argued that “Knowledge is a renewable, reusable and accumulating resource of value to the firm when applied in the production of products and services. Knowledge cannot be stored in computers; it can only be stored in the human brain” (Gottschalk, 2005, p.58). Gottschalk stresses the importance of human over artificial intelligence in KM. Many people have the illusion that knowledge can be stored in computers. Gottschalk argued that since knowledge originates in human brain, it can be stored properly only in the brain. Computers are the creations of human and hence it cannot store knowledge properly. In short, “Although knowledge can be represented in and often embedded in organizational processes, routines, and networks, and sometimes in document repositories, it cannot truly originate outside the heads of individuals. Nor is it ever complete outside of an individual” (Gottschalk, 2005, p.58). Beckman Model “Beckman (1999) define knowledge management as “the formalization of and access to experience, knowledge and expertise that create new capabilities, enable superior performance, encourage innovation and enhance customer value” (Poorebrahimi et al., 2012, p.25). Beckman stresses the importance of experienced over youths in the KM process in IT organizations. In his opinion, KM is necessary to develop new capabilities and innovative products. The relationships between the organization and its customers can be enhanced with the help of KM. Bukowitz and Williams Model According to Bukowitz and Williams (19990, The tacit knowledge possessed by individuals is crucial and instrumental to an organization’s operation and survival. However, reaching the point where employees willingly share what they know “is one of the toughest nuts organizations have to crack”. Technology has made it relatively easy to organize, post, and transfer certain types of information. “On the other hand, contribution is not only time consuming, but is also seen as a threat to individual employee viability” (Poorebrahimi et al., 2012, p.26). Bouthillier and Shearer Model This model attempts to distinguish between knowledge management and information management. Plenty of people have the illusion that KM and information management or IM are one and the same. This is because of the problems in defining knowledge and information. According to France Bouthillier and Kathleen Shearer (2002), Information is the facts and data organized to characterize a particular situation whereas knowledge is a set of truths and beliefs, perspectives and concepts, judgments and expectations, methodologies and know-how. They have explained the differences between knowledge and information. with the help of the following example. “If the raw data is –10 degrees, then information would be it is –10 degrees outside, and the knowledge would be that –10 degrees is cold and one must dress warmly. In other words, knowledge is closer to action while information could be seen as documentation of any of pieces of knowledge” (Bouthillier and Shearer, 2002). Bouthillier and Shearer stressed the importance of knowledge sharing in their KM model. The focus of KM is not on the distribution nor the dissemination of knowledge but on its sharing. Although knowledge can be acquired at the individual level, to be useful it must be shared by a community, often described as a community of practice. For instance, if there is only one person knowing organizational rules and procedures, such rules and procedures would be useless and meaningless. On the other hand, rules and procedures emanate from communities and exist precisely to regulate group activities. Knowledge sharing is then crucial when new employees arrive and others quit. The management of information does not really focus on information sharing and is more oriented toward the control, preservation, and retention of information. One could also argue that the usefulness and the meaningfulness of information do not depend as much on its collective consumption or sharing: its individual consumption and use could be very effective from an organizational point of view. In fact, too much distribution of information can lead to information overload which could paralyze action. Knowledge sharing is perceived, for example, by the World Bank as critical for economic development and as an important next step going beyond the dissemination of information. In the end, the cycle of knowledge management is not complete nor successful if no efforts are made to ensure the use of stored and shared knowledge. On the other hand, the success of an IM project is achieved when the preservation and the retrieval of information is guaranteed while the success of a KM program ultimately depends on the sharing of knowledge (Bouthillier and Shearer, 2002). Bouthillier and Shearer model of KM (Bouthillier and Shearer, 2002). Importance of Knowledge Management in IT industry Different scholars such as stressed the importance of KM in IT industry. According to López et al (2009), firms need internal information about their financial situation, the effectiveness of their products, their production costs and they need external information about the environment in which they operate– competitors, customers, suppliers, etc. These information helps organizations immensely in knowing their customers and gaining sustainable competitive advantages (López et al., 2009, p.113). Both internal and external information and data are vital for an organization to formulate its business strategies properly. This is truer in the case of an IT organization. Information Technology is an industry sector in which changes happen rapidly and the information is constantly updated. López et al conducted an empirical study of 162 Spanish IT firms and concluded that: IT competency has a direct effect on the processes of knowledge management: knowledge generation, knowledge transfer, and knowledge. Moreover, it has an indirect effect on knowledge management by facilitating the development of organizational structures that favour the development and expansion of knowledge (López et al., 2009, p.111). Zack, (1998) explained the importance of KM in converting problems and challenges into opportunities. In his opinion, competitive power of an IT organization depends on its ability to manage different types of organizational knowledge properly. “Organizations are being advised that to remain competitive, they must efficiently and effectively create, locate, capture, and share their organization’s knowledge and expertise, and have the ability to bring that knowledge to bear on problems and opportunities” (Zack, 1998, p.45). Tseng, (2008) stressed the importance of KM in cutting production costs and innovating new products in IT industry. He also stressed the importance of KM in managing the IT industry customers effectively. Due to the rapid development of knowledge and information technology (IT), business environments have become much more complicated. In order to cope with ensuing complications, enterprises ought to incessantly innovate; otherwise, it will be very difficult for them to survive in the marketplace. Hence, many enterprises have applied IT in order to cut production costs, introduce innovations in products and services, promote growth, develop alliances, lock in customers and suppliers, and create switching costs and raise barriers to entry. In other words, IT can help a firm aiming to gain a competitive advantage. In addition, many studies have argued that business value comes mainly from intangible assets, such as knowledge. Thus, knowledge workers will be able to replace clerical workers as the new mainstream of manpower resources, a field in which the development of IT is the major force for change in knowledge management system (KMS) (Tseng, 2008, p.150) Sue et al., (2010) pointed out the importance of investments to support knowledge management practices in teams. In their opinion, majority of the IT organizations are encouraging team work over individual work and hence KM with respect o teams is extremely important in IT firms. “Recent studies show that the transactive memory system (TMS)-the specialized division of cognitive labor among team members that relates to the encoding, storage, and retrieval of knowledge-is an important factor that affects a teams performance” (Sue et al., 2010, p.855) Recent recession has caused huge problems in the American and European IT market. IT labor is comparatively expensive in these regions whereas it is cheap in countries such as India and China. Prominent American and European IT companies are currently outsourcing their IT jobs to these countries to stay competitive in the global IT market. It is essential for the outsourcer as well as the outsourcee to gather all the information related to cheap IT labor and Outsourcing opportunities. KM helps IT companies to gather all such information. Outsourcing, by its definition of being an externally purchased service or resource, has two particular characteristics that can have a significant impact on a business. A primary characteristic is distance, which can vary from as far away as across the world to as close as across the street. The other main characteristic of outsourcing is which is similar to but distinct from distance is externality. This simply means that the service provider is not officially employed by the hiring organization and is therefore on at least some level an outsider. These characteristics are related in that externality implies some physical distance, but it is not technically a requirement. A service provider could be in the same building or even in the office next door, although that would be an unusual arrangement. The distinction can be thought of as geographic distance (physical) and relational distance (externality). Neither of these characteristics is unique to outsourcing, but both of these characteristics have impacts on managing knowledge (Lewis, 2005, p.6-7). While transferring work from one country to another, it is necessary to gather so many information from the target country. The political, cultural, social, legal and economical aspects of the target country are important for the outsourcing organization. Moreover, the reputation and capabilities of the firms doing outsourcing work is important for the outsourcer while taking decisions. Since outsourcing has less control compared to insourcing, knowledge about the target country and its organizations are essential for the outsourcer. In short, efficient knowledge management is necessary for the outsourcer to get his job done in the proper manner from the target country. Some organizations have the habit of increasing the amount of information technology available to workers as a strategy to improve the performances of the workers. However, Davenport, (2011) argued that merely increasing the amount of information technology available to workers is actually counterproductive as it fails to account for the very different responsibilities knowledge workers have within organizations(Davenport, 2011, p.89). It is illogical to feed the knowledge workers with more information that they require to produce optimum output. Each human has a limited mental capacity to achieve knowledge. It is impossible for a human to accommodate all knowledge in this world in his brain. Once the knowledge stored in the brain exceeds the limits, the person may feel fatigue which is not good for an organization. Nurach, et al. (2012) conducted a survey by a sample of Thailand SME(s) (n = 770) from a cross-section of industries. After analyzing the results, they concluded that the most important factors in improving a business quality are accuracy and timeliness of information, followed by the availability of information analysis, the usage of information technology in storing day-to-day operations and use it for performance management, the effectiveness of knowledge sharing and management system, the effectiveness of acquiring and using external information and, last but not least, the effectiveness of acquiring and using internal information (Nurach, et al., 2012, p.359). Mithas et al. (2011) also pointed out the importance of KM in It industry. In their opinion, information management capability plays an important role in developing firm capabilities for customer management, process management, and performance management. Moreover, these capabilities favorably influence customer, financial, human resources, and organizational effectiveness measures of firm performance. They pointed out the managerial implications of KM in IT industry and argued that senior leaders must focus on creating necessary conditions for developing IT infrastructure and information management capability because they play a foundational role in building other capabilities for improved firm performance (Mithas et al., 2011, p.137) Poor-Ebrahimi & Toloie- Eshlaghy, (2011) pointed out the importance of selection of tools suitable tools and system for implementation of information aggregation structures and information fetching and access model with emphasis on knowledge management. They have mentioned that in order to implement knowledge management based information system, there is need for a systematic and long-term approach, but one can implement some degrees of this system with equipment available in the organizations (Poor-Ebrahimi & Toloie- Eshlaghy, 2011, p.100). Paghaleh, et al. (2011), described some of the loopholes and pitfalls in the knowledge management in IT organizations. They argued that the effective technological factors leading to an organizations successful deployment of knowledge management strategy. In their opinion, development of proper IT infrastructure is the key for knowledge management. However, IT management has substantively surpassed individuals ability to mutually understand and agree upon their desired information and its sharing. This is so, because, despite the amazing improvements of information technology in recent decades, and its omnipresence in organizations, the improvements in the field of knowledge sharing were insignificant (Paghaleh, et al., 2011, p.192) According to Borghoff & Pareschi (1997), Knowledge has been recognized as one of the most important assets of organizations. In their opinion, Information technology can help the growth and the sustainment of organizational knowledge (p.2). Innovation is the key for business success for modern organizations. This is true in the case of IT organizations also. It should be noted that Apple Inc became the most valuable technology company in the world only because of their ability to innovate new products. There are plenty of other companies struggling to keep in pace with the innovative companies such as Apple. One of the key success factors of Apple Company is its efficient knowledge management. Apple never discloses any information about the company strategies or new product developments. In fact, access to important company secrets is limited only to the top executives. References Borghoff, U.M. & Pareschi, R. (1997). Information Technology for Knowledge Management. Journal of Universal Computer Science 3:8, August 1997 Bouthillier, F. and Shearer, K. (2002). Understanding knowledge management and information management: the need for an empirical perspective. Retrieved from http://informationr.net/ir/8-1/paper141.html Dalkir, K. (2005). Knowledge Management In Theory and Practice. Butterworth-Heinemann, 2005 Davenport, T.H.(2011) Rethinking knowledge work: A strategic approach. McKinsey Quarterly. 2011, Issue 1, p89-99. Dr. Nonaka, I. (1997).Organizational Knowledge Creation Ikujiro Nonaka, Retrieved from http://www.knowledge-nurture.com/downloads/NONAKA.pdf Egbu, C.O. & Botterill K. (2002). Information Technologies For Knowledge Management: Their Usage And Effectiveness. 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