Knowledge Management: Pain Points and Recommendations
Knowledge management is a key business capability for achieving success. In 1959, Peter Drucker introduced the idea of the ‘knowledge worker’: an employee whose job revolves around information – creating, consuming, and leveraging knowledge for creative problem solving. Drucker went on to assert that the productivity and growth of these knowledge workers would become an organization’s most valuable asset; the world had shifted fundamentally from a society of labor to a “society of thinkers.”
Drucker opened the door to knowledge management as a concept and key business capability. There has been an enormous surplus of ideas since 1959 to help companies understand the nature of knowledge and identify best practices for knowledge management. Unfortunately, without the proper workflows and software tools, organizations large and small are often more familiar with the problems caused by the lack of knowledge management.
The Hidden Cost of Lost Knowledge
Poor knowledge management contributes to several common IT pain points that increase overhead and reduce employee productivity. Every pain point ultimately affects the company’s bottom line: wasted hours, increased overhead, and opportunity cost. Research from the International Data Corporation (IDC) estimates that improving search and retrieval tools for 4,000 employees would save a Fortune 500 company $2 million a month in lost productivity!
Effective knowledge management can help your organization reduce the hidden costs of not finding mission-critical information. The pain points caused by poor knowledge management can take several forms:
Wasted Search Time
How much time do you spend each day looking for the information you need? Studies from the IDC estimates the average employee spends up to 2.5 hours a day searching for company information. The IDC goes on to estimate that up to 50% of company knowledge is not centrally searchable. For example, any information captured on paper is isolated; you cannot search a filing cabinet. These numbers illustrate an enormous cost in wasted man hours and lost productivity!
Cost of Recreating Lost Information
If an employee can’t find the information they need, the next step is frequently to create and document that knowledge personally. This allows the employee to move forward with their project. However, when we consider that 50% of all company knowledge is not searchable, what are the odds that time was wasted in intellectual rework? Studies have found that most employees spend more time recreating existing knowledge than they do capturing new knowledge. As much as 30% of total productive time is wasted this way.
Opportunity Cost for the Business
Given the numbers above, it’s not hard to argue for the opportunity costs associated with lost or hidden knowledge. Costs can stem not only from wasted man hours, but missed sales opportunities, missed requirements from custom software development, and general employee frustration. Do your employees suffer from work interruptions and meetings to elicit internal knowledge that isn’t written down… or can’t be trusted? While the examples are more difficult to quantify, every organization can list a dozen examples of inefficiency that stems from poor knowledge management.
Knowledge Management Tips: Easing the Pain
Effective knowledge management can help remediate the pain points discussed in this article. This includes not only the hidden costs of not finding information, but a number of other knowledge-related problems. Below are three quick tips to guide your company towards better knowledge management practices to help reduce overhead and increase productivity.
Identify a Central Location for Knowledge
There are a number of IT tools and software solutions to help your company put knowledge management into practice. If you haven’t already, evaluate the different ‘silos’ where knowledge lives within your company. This frequently includes intranets, personal computers, wiki sites, and filing cabinets. Choose a single, central location for storing new and old knowledge that’s accessible (and visible!) to all employees. One great tool to consider in your vendor selection is Microsoft SharePoint; SharePoint is a popular IT tool for centralizing, sharing, and managing information.
Create a Process for Knowledge Promotion
It is critical to create a well-defined and well-publicized workflow for moving new knowledge into your central storage location. This includes the creation of new knowledge from short-term projects and the long-term transition of old knowledge into this single location. This new workflow should be built into the conclusion of each project as a regular opportunity for reflection. Use that time to deprecate old, unneeded material and promote the valuable artifacts for long-term storage.
Encourage Communities of Practice
One way to promote better communication and knowledge sharing is to create different ‘communities of practice’ within the organization. These are groups of individuals who share a common discipline (software development, business analysis) or domain (sales, finance, process improvement). Regular group meetings are opportunities to share knowledge on subjects, identify gaps in understanding, and enforce common standards for managing any knowledge created by the community.
Knowledge Management: Where to Go Next
There may be incredible opportunities to improve the knowledge management practices of your company. Contact Xorbix to talk about your existing knowledge management capabilities and brainstorm new opportunities to develop a culture of learning for your business.