What is Knowledge Management? How KM Tools and Technologies Can Improve Your Business

Knowledge management is the process of identifying, organizing, storing, and sharing information within a company.

Batoi Press Mar 25, 2022

You've probably heard the phrase "knowledge is power." Well, that phrase still rings true today, especially in the business world. One study found that a whopping 74% of organizations say that effective knowledge management increases productivity by 10-40 percent. Additionally, experts estimate that poor knowledge-sharing practices cost Fortune 500 companies an eye-watering $31.5 billion a year.

With these powerful statistics in mind, let's dive into knowledge management (KM), what it is and how it can help your business thrive.

What Exactly is Knowledge Management?

Knowledge management is the process of identifying, organizing, storing, and sharing information within a company. Today, many forward-thinking companies are turning to KM systems to help them achieve this. A knowledge management system harnesses the collective knowledge of an organization to improve operational efficiency, productivity, and morale.

Types of Knowledge in KM

To understand how knowledge systems work in practice, we first need to define what we mean by knowledge. Knowledge management is focused on two types of knowledge:

  • Tacit Knowledge: Knowledge gained through experience and intuitively understood by people who possess it. Tacit knowledge can often be challenging to capture and share because of this reason (it's not easily codified). Some examples of tacit knowledge in the workplace include emotional intelligence, leadership qualities, language style, ideas, and identifying critical ques, like the exact moment a prospect is ready for a sales pitch.

  • Explicit Knowledge: This knowledge can easily be captured in documents, reports, and guides and taught to other employees. For example, case studies, white papers, and things like changing the printer cartridge or raising an IT ticket are considered explicit knowledge.

Some people include a third type: implicit knowledge. However, many people consider implicit knowledge to be a subset of tacit knowledge and therefore not worthy of its own category. Like tacit knowledge, implicit knowledge is difficult to express or extract. It's the knowledge gained incidentally and without awareness that you're learning anything. For example, knowing how to walk, run, or talk is implicit knowledge.

How Knowledge Management Systems Work (The KM Process)

An effective KM system usually goes through three main stages:

  1. Creation: Companies determine all documents and other knowledge they want to disseminate across the company.

  2. Storage: The company utilizes technology to host this knowledge for distribution. The tool must be capable of extracting meaningful information from the knowledge repository, meaning it needs to be formatted correctly and have an advanced search mechanism.

  3. Sharing: In the last stage, employees will be trained on how to use the system and begin extracting information to improve their knowledge and job performance.

How Do KM Systems Handle Tacit knowledge?

Okay, we've looked at the knowledge management process and the different types of knowledge captured and shared in the KM system. But how does a KM system deal with the tricky nature of tacit knowledge?

It's important to understand that KM systems aren't just databases from which you can extract documents. They are much more dynamic than that. For example, they make it easy for users to add rich media or comments to provide extra context to a piece of knowledge. Additionally, they often include features like places employees can ask questions, add comments, or tag subject matter experts.

Benefits of Knowledge Management Systems

  • Lower Costs: Effective KM systems help increase the collective knowledge of employees and reduce the need for expensive training programs or Learning and Development (L&D) courses.

  • Employee Morale and Productivity: Most employees enjoy getting on with their job and feel valued for the work they put in. By giving them access to all the company knowledge they need, you empower them to take control and trust in their decisions.

  • A Single Source of Truth: Without a KM system, employees might have different ideas about the right way to do something. Maybe an employee started at the company years ago and is still using the same (now outdated) knowledge they learned when they first started. When all up-to-date information is in one centralized system, you can avoid inconsistencies and errors across teams.

  • Get Ideas Moving: Sometimes, ideas get stuck within siloed teams. With a KM system, ideas can be shared among the employee population and quickly spark actions that drive innovation.

  • Boosted Security: KM systems promote better data hygiene. Essentially, companies continually identify, track, and monitor their information, reducing the possibility of mishandling information.

  • Improves Customer Satisfaction: When employees are consistently accurate and fast in their activities, quality improves. Additionally, KM systems can vastly reduce the time involved in dealing with customer complaints and delivering a product.

  • Promotes Active Learning: One of the main drawbacks of training courses is that they mostly rely on passive learning, which is more easily forgotten. With a KM system, employees are actively applying what they learn at the moment and are more likely to retain this information.

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