Why Fluor Needed a KMS - Case Study Example

Name Course Lecturer Date KMS case Study Introduction The way an organization manages knowledge in the present business organizations determines to a large extent how it performs. More than ever before the need for sharing and reusing organizational knowledge is being felt. Nowhere else is the need for Knowledge Management more vital than in the Engineering and construction industry. Knowledge Management is allowing companies to reduce the cost and duration of projects significantly. In this case study the knowledge management practices of Fluor Corporation are analyzed with focus on key Knowledge Management Systems concepts. Fluor has been able to store the collective and individual knowledge of its more than 35,000 workers and can retrieve it whenever they need it (Koene). Fluor Knowledge Management System covers several areas of expertise as the organization operations are varied. Fluor operates in over 25 countries in operations spread across six continents. Fluor operations include oil and gas, chemicals and petrochemicals, life sciences, government, power, mining and telecoms. It provides project management, engineering, design, construction, and operation and maintainace services. Why Fluor Needed a KMS? Fluor conducts most of its activities through the project work model. In this model, the organization forms project team to complete an activity. Upon completion these teams are disbanded and members join new teams to take on new demands (Koene). This model of work means that the knowledge gained by the team was lost and the only knowledge available to consequent teams was the learning and experience brought by an employee into the new assignment. At this point we need to define knowledge as distinguished from Data and Information. According to Kakabadse et al (2001) the three terms are closely interrelated but caution should be taken against using them interchangeably. Data is defined as raw facts that have not been processed, organized or analyzed (Dalkir, 7). On the other hand, information is data that has undergone processing to take on meaning. Information is sometimes defined as information that is interpreted in a given context (Dalkir, 7). Knowledge is defined as information that incorporates values, perspectives, beliefs, judgements and know-how. Knowledge is further divided into explicit and tacit knowledge. Explicit knowledge is defined as knowledge that has been formally and systematically documented in specification, manuals, formulae and other documents (Dalkir, 8). In the case of Fluor Corporation project reports, specification, contracts, and drawings, data and orders contain the explicit knowledge of the organization. As with explicit knowledge elsewhere this knowledge is readily available for the newly formulated project teams. They can refer to this knowledge by accessing the documents it has been codified in. Therefore, explicit knowledge was not a vital concern of the Knowledge management system Fluor Corporation was developing as this was already available. Tacit knowledge on the other hand is defined as combination of skills, experiences and understandings of people with information (Dalkir, 8). Fluor Corporation realized that a repository of tacit knowledge would help in finding solutions to future problems and minimizing mistakes in the organization. In the case of Fluor corporation project based work tacit knowledge includes technical know-how and work processes, Problems faced and their solutions, innovation, expert suggestions, experiences and innovations (Koene). Nonaka (2007) notes that tacit knowledge is highly personal and is hardly shared or formalised. Tacit knowledge is part of an individual’s memories and is hard to articulate as it is embedded with a person’s experiences. Tacit knowledge is also mixed up with an individual’s perspectives, beliefs and values. According to Nonaka (2007) tacit knowledge in organizations can be best utilized by using tools that enable collaboration and sharing of knowledge across the organization. Such tools include e-meeting tools and e-messaging tools. At Fluor Corporation the Knowledge OnLine web-based tool was used for knowledge repository and sharing. The knowledge acquisition tool enables organization to avail expert knowledge to its employee’s rather than having them learn everything from scratch. According to Koene, Fluor started the process of building a Knowledge Management System in 1999. However, the organization’s various departments had been involved in departmentalized efforts to manage knowledge. Fluor recognized that their employee were the core of their knowledge based system (Ardichvili, Page and Wentling, 167). Fluor therefore set to retrieve, store and make available the collective knowledge of its employees. Fluor’s KMS Fluor global size and presence meant they had to use a technology that could connect with its employees across the globe. Fluor started by using a tool that enables it employee address project execution and customer issues (Koene). Fluor’s knowledge management system referred to as Knowledge OnLine was a simple, self-service and easy to use system. Like other KMS, it enabled Fluors communities of practice (COP) in capturing, sharing, improving and applying their knowledge in a secure environment (Koene). Therefore, the KMS was both a knowledge repository and a knowledge sharing tool. Fluor COPs were considered to be groups of people who had an interest in interacting and sharing knowledge for any of the following reasons (Koene): People who are working together towards a common goal and need to share knowledge about completion of the present task People who work independently, but their jobs are basically the same and need to share knowledge on how best to do their jobs. People who have an interest in the same information but they are using it for different. Key elements for success Any organizations that are developing a KMS need to gain the support of its employees. Fluor succeeded in showing its employee the benefit of sharing knowledge as they were able to make their work easier as a result of sharing knowledge (Dalkir, 191). According to Fluor their KMS was employee driven and there was a ‘grass root movement to enable sharing of knowledge. According to Koene the key factors that led to the success of Fluor’s KMS are; Its emphasis on people Communities of practice Focused leadership Good choice of technology. An emphasis on people According to Dalkir employees are the core of any knowledge management system (190). Most of the knowledge deposited and shared in KMS systems comes from employees. Fluor realized this in the early stages of developing its KMS (Tiwana, 59). The first KMS team consisted exclusively of Fluor’s employee who collaborated with consultants to develop the strategy, structure, work practices, competencies and vision necessary to develop long-term knowledge management across the organization. Fluor’s emphasis on people was a realization that the challenges of tacit knowledge may lead to the failure of its knowledge management strategy. According to Carrillo and Chinowsky some employee are not enthusiastic about the sharing of tacit knowledge as they consider it personal property rather than organizational property (4). In the case of Fluor, the knowledge possessed by its employee might have been gained while working in teams composed of employees from other organizations. Other employee may have joined Fluor with a wealth of expertise which they may not be eager to share with Fluor (Carrillo and Chinowsky, 5). However, the employees of Fluor were willing to share their knowledge. In contrast, a UK company Wates Group took four years to convince employee to share their knowledge for the benefit of the organization (Carillo, Anumba and Kamara, 29). In most KMS case studies, the resistance of employees to knowledge sharing has been found to be a major cause of the failure initiatives. Employees find it hard to give up knowledge that is considered to be a source of strength and pride (Nonaka, 2007). Employee may fail to co-operate with a knowledge sharing initiative as they do not trust the employer, lack openness to new ideas, poor understanding of KM, intolerance of mistakes by management and disregard of ideas from junior employees (Carrillo et al., 2000). Strong functional communities Fluor’s communities of practice (CoPs) had been in place for sometime before the development of the KMS (Koene). These communities were based along functional and business lines. Fluor’s communities were able to improve the organizations business performance by adopting global best practices, offering expert solution, improving work processes and offering timely solutions. Fluor’s KMS provided an opportunity for further knowledge sharing and is a valuable discussion forum for these experts. Active and involved leadership The leaders of the community were part of the team that developed Fluor’s KM strategy (Koene). Therefore, they remained actively involved in ensuring Fluor’s KM strategy would succeed. The use of technology to support Knowledge Sharing Knowledge OnLine provided a robust platform for various knowledge based services. The software enables Fluor employee to share and retrieve knowledge regardless of their location across the globe (King and Marks, 134). Benefits According to Koene the cost and value benefits that accrue from the use of a KMS are hard to measure. As the KMS becomes part of daily life in an organization its role seems to recide (Anumba, Egbu and Carrillo, 73). According to Koene, Fluor and its customers have benefited from the use of a KMS in number of ways Consistent operations Knowledge OnLine enables Fluor stick to a consistent set of procedures and practices in its operations across the globe (Anumba, Egbu and Carrillo, 73). Fluor will approach a problem the way it has been approached by employees who have previously faced the same problem. Fluor also uses the KMS to train its employees and make them experts in a shorter time. Continuous learning The competitive global business landscape demands a workforce that is constantly updating its skills (Kamara et al, 56). Fluor’s KMS enables its workers learn from the experiences of colleagues and apply the expert advice offered as solutions to the problem. Fluor has developed a knowledge domain that means its employee have access to the best solutions to client’s problems. Fluor’s success stories According to Koene, the benefits provided by Fluor KMS can only be described by example. In one instance, Fluor was able to assist a client extend the life of a 30-year-old control system for another 15- year. A Fluor site manager was able to secure equipment from another client who was replacing his same system with a new one and also secured the services of the installation engineer for the client. All this was enabled by a simple query on Knowledge OnLine. Fluors employee’s who are binding for projects have also been able to use Knowledge OnLine knowledge domain to illustrate Fluor’s expertise in certain fields. Glossary Data: Raw and unorganized facts Information: processed and organized data that has meaning Knowledge: information that is embedded in individual’s experience, beliefs and values Explicit Knowledge: knowledge that has been articulated in written documents Tacit Knowledge; Knowledge that is contained in people’s heads and memories that is gained through experience Expertise: Extensive knowledge in a particular field Knowledge Management: is the process of capture, development, sharing and effective use of organizational knowledge. Knowledge Management System: This is an IT-based system that supports the capture, development, sharing and effective use of organizational knowledge. Knowledge Repository: is an online database for the systematic capture, organizational and categorization of organizational knowledge. Knowledge Sharing: this is the activity of sharing organizational knowledge among employees and client who might need it Knowledge capture: these are a number of techniques used to elicit an individual’s tacit knowledge (insights, experiences and lessons learned) for future reference by the organization. Communities of Practice: this is a group of people engaged in collective learning in a particular domain of learning. Knowledge domain; this is the overall knowledge that has has been discovered, perceived or learned References Anumba, Chimay J., Charles Egbu, and Patricia Carrillo, eds. Knowledge management in construction. John Wiley & Sons, 2008. Print Ardichvili, Alexander, Vaughn Page, and Tim Wentling. "Motivation and barriers to participation in virtual knowledge-sharing communities of practice." Journal of knowledge management 7.1 (2003): 64-77. Carrillo, Patricia M., Chimay J. Anumba, and John M. Kamara. "Knowledge management strategy for construction: key IT and contextual issues." Proceedings of CIT 2000 (2000): 28-30. Carrillo, Patricia, and Paul Chinowsky. "Exploiting knowledge management: The engineering and construction perspective." Journal of Management in Engineering 22.1 (2006): 2-10. Dalkir, Kimiz. Knowledge Management in Theory and Practice. New York: Elsiever. 2011. Print K Kakabadse, et al. "From tacit knowledge to knowledge management: leveraging invisible assets." Knowledge and Process Management 8.3 (2001): 137-154. Kamara, J. M., et al. "Knowledge management in the architecture, engineering and construction industry." Construction Innovation: Information, Process, and Management 2.1 (2002): 53-67. King, William R., and Peter V. Marks Jr. "Motivating knowledge sharing through a knowledge management system." Omega 36.1 (2008): 131-146. Koene, Rob. Case study – Fluor Corporation. IK Magazine 3.2 (2006). Web. URL: http://www.ikmagazine.com/xq/asp/txtSearch.CoP/exactphrase.1/sid.0/articleid.2F806554-8C44-47DF-8BC8-40E528B026CD/qx/display.htm Nonaka, Ikujiro. "The knowledge-creating company." Harvard business review 69.6 (2007): 96-104. Tiwana, Amrit. The knowledge management toolkit: practical techniques for building a knowledge management system. Prentice Hall PTR, 2000. Read More