The Importance of the Knowledge Management in the Organizations - Research Paper Example

Introduction: In the current world where there is a high need for innovativeness and a need for newer initiatives each day, one of the major management issues that has not been taken into account is the ability to effectively and efficiently manage the vast amounts of knowledge that is available in the companies. This paper will deal with the issues that are present in organizations, i.e. lack of knowledge management. Topic in focus: The topic that has caught the attention of the author for this research is the lacking levels of knowledge management within industries. The author has used a number of research papers and articles to understand the importance of knowledge management. Before moving further into the report, it is essential to gain a brief understanding of the meaning of Knowledge management (KM). KM has been discussed and described by several experts. Ron Young, CEO of Knowledge Associates International has defined KM as, “the discipline of enabling individuals, teams and entire organizations to collectively and systematically create, share and apply knowledge, to better achieve their objectives” (Knowledge Management). Knowledge plays a very important role in every business and it will pose to be one of the major economic challenges for most businesses in the future as well. As mentioned earlier, the most important aspect of a successful business in the current period is the ability to be innovative, and also have the ability to capitalize and share the knowledge capital. The implementation of the knowledge management programs and processes within any company mainly requires the support of the top management and a strategic commitment. Need and Benefits of Knowledge Management: According to Alavi and Leidner (1999), “Knowledge management system is of interest to many organizations nowadays because it provides great benefits in many aspects such as communication, efficiency, financial, marketing”. The implementation of knowledge management within organisations can bring about a vast range of changes and improvements to any organisation and can impact a number of different departments as discussed below: a) Communications: The use of KM systems within organisations allows enhanced and fasten communication which in turn leads to better staff participation and involvement. b) Efficiency: The implementation of a strong and well monitored KM system will lead to bettered performance, lessened proposal time, improved results, faster delivery cycles and basically the overall efficiency of the organisation. c) Financial: The implementation of the knowledge management systems allows better performance and also accountability. Organisations are known to have increased sales and decreased costs which in turn lead to higher levels of profitability. d) Marketing: Considering the marketing aspects of the organisations. The use of knowledge management can help in providing better customer service, improved customer relationship marketing and also more proactive and target marketing. This in turn leads to bettered customer relationship management as a whole. e) Processes: One of the important aspects of the implementation of knowledge management systems is that it allows the organisations to offer consistent proposals to multinational clients improve project management and lastly reduce the personnel turnover rate. The above mentioned are a few of the benefits of the Knowledge Management systems, however one of the main and most essential aspects is the impact and the benefits that the knowledge management systems brings to the human resources with the organisation. The knowledge Management systems help capitalize, i.e. focuses on providing information and knowledge and also includes what the company can do with the knowledge, share, i.e. it builds a level of collective intelligence rather than an more individualistic approach and finally, create, i.e. supports innovativeness and also creation for the survival of the business in the highly competitive markets. DeNoni et al. (2009) found that organizations compete based on knowledge. “Managing knowledge represents the primary opportunity for achieving substantial and competitive advantages.” (p. 111). Use of Knowledge Management: According to the Chief Knowledge Officers: “the explicit and systematic management of vital knowledge and its associated processes of creating, gathering, organizing, diffusion, use and exploitation, in pursuit of organizational objectives” (Knowledge Management). Knowledge has been recognized to have a number of different roles in different businesses over the years. McInerney (2002) believes that KM allows companies to benefit from the knowledge that resides in an organization by using it to achieve the organization's mission. As explained by Carnegie, “The only irreplaceable capital an organization possesses is the knowledge and ability of its people. The productivity of that capital depends on how effectively people share their competence with those who can use it” (Carnegie). Hence there is a high need of knowledge management systems specifically when there is an abundance of available knowledge. Implementation of Knowledge Management Systems: Organizations across the world can implement the KM systems very effectively and efficiently in a set of phases. For the implementation of knowledge management systems, the companies firstly need to gain a strong and well defined understanding of the organization. This involves a study of all the processes within the organization and all teams within the organization. For the company to implement the knowledge management systems, it is important to learn the returns that the company would earn by investing into these systems. This simply implies that the management of the organizations needs to study each and every process of the organization and then analyze if the implementation of the knowledge management systems will in fact create any improvements to the processes. This includes any kind of improvement in terms of processes and also in the financial sense of the business. Once the management is sure of the implications of the implementation, then a thorough analysis of the benefits that the overall organization will gain need to be taken into account, in other words the Return on investment (ROI) needs to be calculated. If the ROI of the organization is substantial, then the company can clearly undertake the implementation of the knowledge management systems. It is important to realize that the implementation of these systems basically means a drastic change to the organization and the overall flow of knowledge. Hence it is up to the management to divide the entire implementation into different stages and phases to ensure that the implementation is smooth and well rounded. This will allow the companies to grow as well as allow for successful implementation only in teams which require the same and also show a promising ROI. Conclusions: Jonscher (2000) stated in one of his books that deep down, the information revolution is not about technology working with data but about people working with knowledge. However, it is obvious that computers are useful in KM as they do not slow down the learning, but help the KM to be more efficient and effective in order to support learning to a greater extent. OECD (1996) has noted that “knowledge and information tend to be abundant, what is scarce is the capacity to use them in meaningful ways” (p.11). In the current times, the importance of the knowledge Management and the benefits that it brings to the organizations is not known or is limited. Hence this is a lacking within the organizations. Coakes (2004) concludes that if KM is implemented well, it can enhance productivity, develop worker collaboration, and condense product development times. “Implemented badly it may incur significant costs without delivering these benefits” (p. 406). Hence, one of the most essential elements that the managements across the businesses worldwide need to work on is the implementation of knowledge management in the most effective and efficient manner. Also, it is important that businesses and individuals from across the globe have an increase awareness to ensure that they are constantly in the loop and are updated at all times. This will lead to more effective, efficient and successful organizations. Works Cited Alavi, M and D.E. Leider. "Review: Knowledge management and knowledge management systems: Conceptual foundations and research issues." MIS Quarterly (2001): 25(1), 107-136. Carnegic, A. "The Autobiography of Andrew Carnegie and The Gospel of Wealth." (2009): Digireads.com. Coakes, E. "Knowledge management--a primer." Communications of AIS (2004): 2004(14), 406-489. DeNoni, I, L Orsi and L Pilotti. "Uncertainty and forecasting of future extreme events in organizations: New approaches in knowledge management." ICFAI Journal of Knowledge Management (2009): 7(3), 96-113. Hewitt, P. "Creating Competitive Advantage in Knowledge Economy." A speech given at the Said Business School, Oxford University (2000). Jonscher, C. Wired Life: Who are we in the digital age? London: Anchor [Transworld Publishers]. Random House, 2000. Knowledge Management . Definition of Knowledge Management. 2010. 10 March 2010 . McInerney, C. "Knowledge management and the dynamic nature of knowledge." Journal of the American Society for Information Science & Technology (2002): 53(12), 1009-1018. OECD. The Knowledge Based Economy. Paris: Paper presented at the OECD, 1996. Read More