Knowledge Management

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Companies constantly acquire knowledge. While individuals know what they want to know and what they are not interested in, companies often don’t. Huge amounts are spent in re-acquiring knowledge because in most cases companies do not know what they got, or where they put it. Knowledge management (KM) is often confused with data warehousing, or data storage. While both these play a part, they actually look at only one aspect, and are part of many different technology solutions used in a company. KM itself is much more.

It is not difficult to implement either. The challenge does not lie in the technology or in finding the right solution, as there are many solutions available today. The challenge lies in finding a system that goes along with the company’s processes. It is wrong to assume that a solution will work for a company because it works for the competition. Companies in the same line of business often have different work practices that developed over the years.

What is KM?

According to Andrew Templer, RightNow Technologies, “Knowledge management is the process of achieving organisational objectives by using knowledge in the most effective way. A KM system is one that captures the knowledge available in an organisation and makes it readily available to other users.”

“Enterprise Knowledge Management is the ability to share, capture and reuse corporate information”, says Chris Lynch, managing director, Hummingbird, Australia.

Explaining the value of putting in place KM, Phil Brown, business development manager, HRMS (Human Resources Management Systems) for Oracle states that Australian organisations need to step back and look at the bigger picture. He believes that companies need to consider the end goal first. “It’s fine to have the knowledge and capture it, but the real value comes in how it’s used in the organisation and how this adds value. “From his experience working in the field with Australian companies, Brown has found that often knowledge management initiatives end up being nothing more than a big database.

Data stores of all sorts occur because companies do not have a defined method for knowledge capture. With the storage capacity available today, it is easy to save a lot of information on some system in the organisation. Knowing where it is and finding the most current version when required is where knowledge management steps in.

KM is confused with data warehousing because most people consider this to be the same thing. Data warehousing refers mainly to data that is generated thru transactions. This data usually follows some standard pattern, and is captured all the time by systems everywhere. It then has to be analysed to get value from it. Data, by itself, does nothing for the company. Knowledge, on the other hand, is of many types. It can be forms used by the company, processes and systems to follow to get a task done; it can be ideas that have still to be acted on; it could be the results of the analysis of the data stored in the data warehouse.

Whatever form it exists in, this knowledge can be captured, recorded, labelled and kept ready for use another time. A good example would be a library, wherein one could get almost any information on any topic. The Internet is a good example of a knowledge store. The search engines are the tools used to find the information required. Finding something is not an if option in a good KM system. States Templer, “A good KM system removes the chance element, deliberately connecting people who need information, with that information.”

Benefits of KM

Both Templer and Brown agree that every company should be concerned about KM. Looking at a CRM perspective, “By keeping everyone on the same page, a company is more likely to send out consistent messages. Customers are therefore likely to be less frustrated, because they are more able to find answers to their questions. Ultimately, this can translate into more sales”, says Templer.

There are also other benefits that the company receives by getting its act together:

Increased efficiency: One of the greatest benefits for a company is the reduction in time spent re-inventing or re-visiting a problem. If the knowledge store is hard to navigate or does not have a simple interface, people will not look it up, and just go about re-doing whatever they had to do. For example, if a mobile phone customer requests a draft of a letter requesting activation of some service, and the letter is not readily available, one would have to re-create the letter—a loss of time.

RightNow Technologies provides a solution that automatically sorts questions responded to and moves them up the list. Thereby frequently asked questions are always on the top. While common questions are readily stored and recovered, either by the agent or by the system, recording new or uncommon queries and placing them where they are accessible by all staff saves time.

Again, if the company records customer behaviour during and after a campaign, (which is also knowledge gained), it provides the company a basis to launch another in a shorter period as well as improve the next campaign.

Reduced operating costs: The less time spent in retrieving information, the lower is the cost of operation. Companies forget that the reason why they hire more call centre staff and increase infrastructure is so that they can service more clients faster. This in turn is dependent upon the speed at which information can be retrieved. A good database can dramatically reduce the number of interactions between staff and customers.

Being able to share information across the organisation means that there are more people who can provide answers, and more heads that can be used to improve systems. Self-service is not a new concept. It is in use in many places and there is no reason to believe that it cannot succeed in the business world as well. Providing a user the ability to find information quickly means reduced waiting times for staff and customers who wait to speak with someone.

Higher productivity: The KM system can then be used as a training tool for new employees, helping them to be productive sooner. A good KM solution ensures that new employees know where to look when it comes to getting information about systems that they are not familiar with. Hence, rather than spend time creating processes, they can simply look it up in the knowledge base. If one incorporates his past experiences, and adds this to the database as well, knowledge is increased. The benefits of both systems are now available, or then merged into a unified solution.

Increased satisfaction: Customers who engage in online self-service—taking advantage of a KM system—are typically less frustrated than customers forced to wait or put on hold for a human agent to attend to their request. Customers, who need to access simple or common information, find it much easier to get it online rather than wait in a telephone queue. Additionally, when information is accessed online, a company can be positive that all customers are receiving the same information in a consistent manner. When human CSRs impart information, they often attach their own interpretation. Surveys suggest that there is a shift in the way people like to receive information. While a phone call is still high on the list, many are more inclined to get information and leave if they can. This is why many customers prefer to obtain information from a web site.

Problems

One of the major reasons why KM fails is that there is not enough training done. Users, both customers and internal staff are left to fend for themselves, or then, it is pre-supposed that the system is simple enough for one to figure out. However, if this is not the case, users quickly stop trying to make sense of the system and develop their own methods of storing and retrieving information they think necessary, creating small pockets of knowledge across the organisation. According to Templer, non-usage by the target audience is one of the biggest problems of a KM system. “If a KM solution is not properly implemented, or doesn't have appropriate and useful information, the intended users will effectively be trained out of using it. This wastes the initial money spent on developing the solution and forces the company to fix the problem, often incurring more costs along the way.”

Lynch, on the other hand, feels that the biggest challenge is changing the culture of the organisation to be a knowledge-sharing environment rather than an individual quest for power. He points out that KM is a cultural practice that needs to be encouraged in an organisation. “For KM to be successful an employee needs to feel part of a team and by sharing there work will enable the whole team/organisation to benefit. Thus enabling them in the long run to operate more effectively and efficiently. This will create a better working environment and in the eventually make the company more profitable.” Sharing information is rarely rewarded in most organisations. Most employees live in the fear of being let go, especially in these times. Hence, they see even less reason to share information with the organisation. Being able to create an atmosphere that is conducive to sharing is therefore vital for KM to work. It supports Templer’s theory of failure as companies will otherwise have to spend additional amounts in having someone specifically populate the knowledge base. Single-handedly, this would be time-consuming and too slow.

Measuring ROI

Calculating the Return on Investment (ROI) for a KM system is easy to do. The non-tangible returns that are almost immediately seen will be in the form of fewer requests, quicker service, lower stress levels of the staff, especially in call centres. Brown is clear that for KM to be successful, each tier, including this measurement tier, should be addressed with the same concern. Brown suggests a couple of methods in which ROI can be measured.

Increased efficiency: This should be automatically noticeable as a reduction in the time that employees spend searching for the right information. In a call centre, it will be more apparent as agents are able to respond to queries quicker. One could also test this by making random test calls requesting obscure information before the KM implementation to benchmark the response time. Calling after the implementation will then allow one to check the improvement.

Start up time: Another good indicator is the amount of time it takes an employee to get started when they join. Shutting access to the in-house ‘expert’ could also do this. It may take some time before the system kicks in, but results should be apparent pretty quick. If there was a system in place before, it is possible to track the number of requests made, and then to compare the number of requests made on the new system.

Satisfaction: A simple routine at the end before exciting, could monitor a users satisfaction level by monitoring the number of links the user moved thru and finding out whether the question was answered.

So When to Start?

Now! An organisation should embark on a KM strategy from its inception or start immediately. Better delivery of information and the ability to reuse and leverage off past experiences may just give an organisation the competitive edge they are looking for. As most organisations are now aware of KM initiatives and some are in the midst of implementation it will be a critical success factor in the near future.

KM is an evolving project. Says Lynch, “For KM to be effective organisations need to constantly reassess their KM goals to see if they are meeting the organisational goals. KM is every individual’s responsibility.” In his opinion, individuals need to understand what impact they can have on the overall environment by managing and sharing their information. “If the employees don't add to the knowledge base then in turn it will not grow to be a resource they can draw on.”

An organisation’s intellectual property is the foundation of its operations. Organisations need to be able to leverage off the expertise and the input of every single employee to create an environment that encourages individuals to share their knowledge rather than hold it close for personal gain. In today's economy it is critical that organisations be able to access information quickly and easily, thus enabling them to make better more informed decisions.

Knowledge Management is all about culture, with technology as the enabler. Like all major projects, it needs that the company’s management understand its benefits and lead by example. If this does not happen, the project is more likely to fail. Perhaps, the most important reason for implementing a solution is the fact that today’s business world is all about speed, and companies just cannot afford to spend time re-inventing the wheel, else they may just miss the bus.

RightNow suggests a four-step process in creating an effective self-learning knowledge base, which places the user at the centre of the process.

Step 1: Seeding

A knowledge seed typically consists of between 15 and 50 initial knowledge items of commonly asked questions and answers. These seed items must contain accurate and relevant information, but do not have to be comprehensive. This seed is the starting point for the self-learning knowledge base. Users can now use the knowledge base to find answers, usually via a web interface. Importantly, users who are unable to find answers to their questions must be able to submit questions for a human response.

Step 2: Capture

Users search the available knowledge if they can't find an appropriate answer, they submit their question using a web form, email or chat session. The self-learning knowledge base then routes the question to the appropriate subject matter expert, usually a CSR. The subject matter expert then answers the question and, in the process of doing so, this incremental knowledge is captured for inclusion in the knowledge base. Most importantly, the content of the knowledge base is now completely driven by what users are asking about, ensuring the information is relevant and timely.

Step 3: Organisation

Self-learning knowledge organisation makes the information that has been historically most useful to users the most accessible information for subsequent users, ensuring that the most users find the most answers with the greatest possible ease.

Step 4: Management

This step forces information that does not continue to be useful off the top of the knowledge base so that it becomes less accessible and doesn't interfere with access to more important items. Information may be more or less relevant depending on seasonality (e.g. before or after Christmas) or special promotions, etc. Information items that continue to be useful stay at the top of the knowledge base while items that diminish in usefulness descend from the top and become less visible.

CRM Magazine is published by Xer Publishing and is the preeminent customer management magazine for the business community in the Asia Pacific Region. Visit www.crmmagazine.com for more information about this leading independent publication.

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