Knowledge is a crucial factor in the corporate context – and is becoming increasingly important. In most companies, information trapped with one person will stiffle efficiency and innovation. Instead, knowledge should be available quickly, validly and in the right format so that many people can use it. Knowledge management is the practice of making effective use of knowledge and information.
What is Knowledge
In short, knowledge is awareness of and understanding about a certain topic or fact.
It is important to differentiate the term knowledge from those of information or data as follows:
Data -> Information -> Knowledge
- Knowledge = opinions, processes, ideas that stem from knowing about the information
- Information = data provided with context
- Data = measurements or objective details
Another term that is often confused with knowledge is skill. Typically, knowledge can be transferred from one person to another. When it comes to knowledge within a company, is often shared through writing or video.
In contrast, skills – for example, how to drive a car safely – can usually only be learned. They must be learned and put into practice by someone.
Knowledge Management: A Definition
Knowledge management (KM) is a structured process for capturing, organizing, storing, sharing and using knowledge or information.
Knowledge management is a multidisciplinary approach. It draws on learnings from many subject matter experts. These experts share knowledge with others, generally through a knowledge management program.
This provides everyone with adequate access to available knowledge. It does so in an easily accessible way that offers knowledge users an overview and structure. This makes it easier for people to put the knowledge to use.
Against this background, the challenge for companies is to use their inherent know-how profitably. They need to benefit as much as possible from their own expertise.
Why is knowledge management important?
By implementing a knowledge management process, companies can operate more efficiently, increase their innovation and gain competitive advantages.
The challenge is to separate the important from the unimportant. It is also necessary to provide truly relevant information to the right addressees and store it in the right places. This is where knowledge management tools come into play. They make knowledge content accessible as well as provide structure.
Effectively managing and access knowledge gives companies a competitive edge.
Relevant steps in knowledge management
Knowledge management is made up of the following steps and components:
- Identify relevant knowledge
- Capture and document knowledge
- Save knowledge
- Distribute and pass on knowledge, e.g. through knowledge base articles
- Use and apply knowledge
- Preserve knowledge and protect confidential information
It's not enough to know - you also have to apply. It's not enough to want - you also have to do. Johann Wolfgang von Goethe
Knowledge management in a company is a continuous process that never really comes to an end. Those responsible must constantly maintain, update, renew and supplement know-how. It must be up to date and truly helpful.
Knowledge Management Use Cases
Using knowledge in the corporate world is important. Here are two use case examples that illustrate how it may be a competitive advantage.
Example #1: A company develops an AI strategy
A company wants to establish itself more strongly in the field of artificial intelligence (AI). So far, however, there have been very few points of contact with the topic. In other words, no one has been explicitly assigned to it.
The Chief Information Officer (CIO) must develop a strategy. As a first step, they source all of the existing knowledge in the company:
- The relevant knowledge that employees already have can be collected in an internal company forum.
- Any existing self-service portal is searched for relevant information.
- The existing knowledge is consolidated in a knowledge base.
Now, there is foundation on which to build. An AI strategy is developed based on the company’s own knowledge. In this way, knowledge about AI is used collectively and transferred into a target-oriented strategy.
Example #2: A team develops new software
A group of developers is in the process of creating new software. They need detailed information about previously developed modules, technologies used and frequently occurring problems for this extensive project.
This means that prior history, or knowledge, about the software must be accessible. Fortunately, a variety of items are available in a wiki (a type of knowledge base). This includes best pratices, peer and code reviews, project templates, checklists, etc.
By also documenting details such as code snippets and individual bug fixes, knowledge about the entire project is tracked The information serves as a basis for continuous improvement.
In the end, other people from the developer’s company can use this as an important reference for similar projects. This closes the cycle of learning and improvement.
The Benefits of Knowledge Management
Solid knowledge management leads to specific benefits that have an extremely positive impact. Specifically, the advantages are as follows.
Advantage #1: Work effectiveness
With the right knowledge at the right time, companies and their employees can expand their potential. This is a basic prerequisite for being effective and achieving goals.
Know-how pushes work in the right direction. This adds value and makes a real difference. When the right information is available to everyone at the right time, people are able to convert it into tangible results.
Advantage #2: Creativity and innovation
Ideas, suggestions, information, leanings, knowledge objects – all of these stimulate creativity and innovation. The basic concept is to build on what already exists in order to develop something new. Those who are well informed broaden their horizons and are much more likely to develop new approaches.
This is not just a basic scientific principle. It is also helps companies develop concepts that are in line with certain circumstances and market situations.
Advantage #3: Better products and services
By making best practices and experiences more accessible, companies can continuously optimize the quality of their products and services. Among other things, the principle of continuous improvement helps to increase efficiency and customer satisfaction.
This is in line with consistent knowledge management. It is the best way for organizations to pool their expertise, skills and experience to ultimately provide better products, customer support and related services.
Advantage #4: More efficient problem solving
By quickly accessing knowledge from past projects and similar challenges, companies can solve their current and future problems more efficiently.
With a well-structured knowledge management system, employees can quickly see how someone has successfully solved a similar problem. They do not have to reinvent the wheel. It is often sufficient to use best practices for similar cases as a guide and adapt this to the current situation. This speeds up the problem solving for the new case.
Advantage #5: Better decisions
Good knowledge management also makes it easier for companies to make targeted and logical strategic decisions. This is because the required information is available to people quickly.
After all, the quality of a decision often depends heavily on the information used to inform it. It’s a simple calculation: only those who have the right knowledge at their disposal can make truly logical and target-oriented decisions.
All change creates fear. And the best way to combat this is to improve knowledge.
Knowledge Management: Methods
The aim of knowledge management is to deal effectively with the knowledge available.
Knowledge should…
… not be lost.
… have a clear benefit.
… be available to as many employees as possible.
… bring clear added value.
… be applicable in the right situations.
Let’s look deeper into the knowledge creation process.
Identify knowledge
The first step is to identify existing knowledge. This often begins inconspicuously through conversations, team chats or group discussions. A more direct method is expert interviews. Documents, reports or minutes are also relevant sources of knowledge.
Collect and store knowledge
Both individual and collective knowledge must be well recorded. Individual knowledge can come from interviews, recordings or lectures. Collective knowledge (swarm intelligence) comes is created during meetings and can be found in minutes and recordings. Companies should store this knowledge digitally and make it centrally accessible.
Create a knowledge base
A knowledge base is at the heart of effective knowledge management. Knowledge base articles, FAQs and instructions can be essential for companies because they provide they structure and organization.
They also form the basis of a digital self-service for customers.
Actively use and apply knowledge
Even the best knowledge base is ultimately only a means to an end. Customers and employees should be able to use it frequently and satisfactorily. In general, it is often a decisive goal to be able to use the available knowledge as comprehensively and effectively as possible.
Optimize and enrich knowledge
Knowledge is not a static thing. It is constantly evolving. Organizations and individuals should regularly evaluate existing knowledge, identify “needs” and look for new sources of knowledge. The overriding question here is which knowledge is useful and up-to-date.
The SECI model
The SECI model has established itself as a systematic approach to knowledge management. It is one of the most widely used methods for systematic knowledge management.
SECI stands for Socialization, Externalization, Combination and Internalization. The model describes the process of how companies create and transform knowledge.
The SECI model depicts knowledge development as a dynamic cycle. It was developed by the two Japanese knowledge theorists Ikujiro Nonaka and Hirotaka Takeuchi.
This cycle can be applied to different levels of a company, such as individual, group or ove level. It promotes a learning organization that is constantly evolving and generating innovations.
The four phases of the SECI model are:
Socialization
In this phase, knowledge is transferred from one person to another through conversations, observation, imitation or shared practices. Examples include mentoring, on-the-job training and informal meetings. For example, an experienced salesperson might take a trainee along to a prospect meeting.
Externalization
Now tacit knowledge (that which is personal and experienced) is transformed into explicit knowledge (that which is codified and captured). In other words, the knowledge is recorded in some way such as in a document, model or concept. In the example above, this could be as simple as the trainee writing a report on the interview.
Combination
In this phase, knowledge from various sources is combined to create new knowledge. The aim is to collect and process information, combine data and systematize knowledge. This might involve several trainees comparing their reports in order to draw more informed and better conclusions.
Internalization
Now the explicit knowledge is transformed into implicit knowledge. It is internalized through practical application and experience. It is finally integrated into people’s actions. In the example, this means that the trainees apply the acquired skills in practice.
Tips for Successful Knowledge Management
In addition to understanding types of knowledge management, it is worth using a few tools, tactics and strategies too. This helps the company use of existing knowledge resources in the best ways.
Tip #1: Promote knowledge
sharing in a targeted manner
Knowledge management is far more useful when it is practiced by the entire company. In the best case scenario, employees actively participate in knowledge exchange and share relevant content immediately.
Companies can encourage this by calling for an open exchange of ideas, information and knowledge, involving key people with critical knowledge, and valuing or rewarding the exchange.
Tip #2: Actively use collaboration platforms
Lively exchanges bring relevant knowledge content to light. This requires good collaboration tools and document management systems. These make it easy to share information, ideas and concepts.
Tip #3: Create templates for documentation
If it is easy to create knowledge content, this will happen much more frequently. All too often, employees are overwhelmed by the task of creating useful and meaningful documents. Templates can be an important aid. Plus, they help standardize the documentation.
Tip #4: Incorporate security measures
Sharing relevant knowledge is a good idea. However, not every single person should be able to access it. It is important to implement access restrictions that protect confidential and sensitive content from unauthorized access.
Tip #5: Measure results
It is advisable to use metrics and key figures to evaluate the success of knowledge management. This can be as simple as the number of knowledge contributions created. It is also possible to record the extent to which a knowledge base is used. Other metrics include how much time employees saved or how many innovations emerge.
Relevant connections
Knowledge management only reveals its strengths in combination with other information management disciplines and tools.
Knowledge management and information management
Information management is closely linked to knowledge management. It enables companies to make targeted use of information as a strategic resource. Information must first be available in the right form. Then, it can be transformed into knowledge content.
Often, however, information and knowledge cannot be clearly separated from each other. This means that information management and knowledge management merge seamlessly.
The relevant difference between the two is that knowledge combines factual with experiential information.
Knowledge management and knowledge databases
Knowledge databases are an important means of recording knowledge centrally, clearly and easily retrievable. They are an important component of knowledge management, which also covers other areas.
Databases prove to be essential for recording, maintaining and retrieving relevant information. Knowledge management also controls how knowledge is used and how it is strategically deployed.
Knowledge management and information flows
Information flows describe the path that information takes within a company. Sender-recipient relationships are defined here.
Functional information flows are required in order to obtain relevant knowledge. Because communication does not necessarily take the most effective routes, information management directs the information.
For instance, two team members share important project experiences in an informal conversation (information flow) and ultimately come to the conclusion that this knowledge should be shared (information management). Based on the conversation, a knowledge base article (knowledge management) is created with lots of relevant and exciting information, learnings and experiences from the project.
Knowledge management and artificial intelligence
Artificial intelligence is playing an increasingly important role in the effective handling of knowledge. Recently, users have become accustomed to consulting generative AI tools. Typically, these are AI chatbots that promise simple, fast and intuitive access to relevant knowledge content.
However, the benefits of artificial intelligence – such as increased efficiency, time savings and optimized decision-making – can be used in a variety of ways. AI summaries of texts, for example, are often useful for gaining a better overview. This captures relevant content more quickly and easily transfers it into knowledge base articles.
Conclusion: knowledge management – an important discipline
Knowledge is of enormous importance. It is a decisive factor in the modern corporate world. Companies that operate a knowledge management system can make much better use of their information, ideas, experience, learning, values and skills.
To achieve this, use a suitable knowledge database, systematically generate documentation, and use the knowledge content. Drawing on models, such as SECI, and some best practices can bring great added value.
Find out how OTRS can support you with knowledge management.
