Rope in knowledge with powerful new knowledge management software

Monday Jun 1st 1998 by Dan Richman
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Your company is a rich resource, full of knowledge. Knowledge management software gives users access to that knowledge so they can solve business problems more quickly.

In this article:
What is knowledge management?
Get in the know
Lessons learned
Do you know how much you know?
Here's the pitch: Gain corporate intuition, an organizational response to new situations, that lets your company meet and defeat a competitive challenge. The miracle of knowledge management electronically harnesses the know-how and experience of every employee.

Sound too good to be true? That's because it has been, at least until now. Knowledge management (KM) has become very useful lately, especially to organizations that sell knowledge and services, rather than products.


Illustration by Daniel Guidera
Consider AnswerThink Consulting Group of Miami. Founder Allan R. Frank says he bet the company on KM when he broke away from KPMG Peat Marwick to form his consultancy in April 1997. "Our entire knowledge repository is organized into a hierarchy like you find on Yahoo!" he says. "We're one large brain" (see http://www.yahoo.com for the prototypical example of such a hierarchy).


"Our entire knowledge repository is organized into a hierarchy like you find on Yahoo!... We're one large brain," says Allan Frank, AnswerThink Consulting Group.

Using the Dataware II Knowledge Management Suite from Dataware Technologies, AnswerThink created a hierarchy--also known in KM jargon as a taxonomy--of its partners' knowledge. This huge outline includes topics, subtopics, and sub-sub-topics. AnswerThink also identified who knew the most about which topics by scanning e-mails and by identifying who had read or written most prolifically on those topics. The taxonomy and links to the items it indexes (such as e-mail messages, white papers, presentations, checklists, and memos) is accessible over the firm's extranet.

When AnswerThink acquired a consultancy that made heavy use of the groupware package Lotus Notes, Dataware's software scanned the Notes databases and added their contents to its taxonomy while the Notes databases remained in place.

"In a world where bricks and mortar no longer count, this system lets us solve problems better and serve customers better, in very concrete ways," Frank says. "We don't have to get fancy to address key questions: How can I produce a better proposal, close a sale faster, tell one of my partners all about a client I've been working with?"

The nature of knowledge

What is knowledge management?

Knowledge management is "a set of practices that includes identifying and mapping intellectual assets within organizations, generating new knowledge for competitive advantage, making vast amounts of corporate information accessible, sharing best practices, and applying management strategies and technology that support all of the above." --CAP Ventures, http://www.capv.com/index.html

It is "a business activity with two primary aspects: Treating the knowledge component of business activities as an explicit concern of business reflected in strategy, policy, and practice at all levels of the organization; and making a direct connection between an organization's intellectual assets--both explicit (recorded) and tacit (personal know-how)--and positive business results." --"Knowledge at Work," an on-line publication, http://www.knowledge-at-work.com

It "holds the potential to enable adaptable environments in which human change is aligned with process and technology programs to provide business performance optimization." --DCI http://www.dci.com/manknowl

It is "a business practice that refers to the concept of harnessing information and knowledge, and making it effortlessly available to all employees to help them do their jobs more effectively." --Doculabs http://www.doculabs.com

Knowledge management is essentially assessing and recording who within an organization knows what (see the text box, "What is knowledge management?").

According to Thomas Koulopoulos, president of the Delphi Group, a Boston-based management consulting firm, two KM phrases, "tacit knowledge" and "explicit knowledge," go back to academic inquiries at the turn of the century exploring the nature of knowledge.

Indeed, some KM software products claim the ability to identify and record not only an executive's explicit knowledge--often defined as what he knows he knows--but also his tacit knowledge, which is what he doesn't know he knows. To identify the characteristics that best leverage an organization's intellect, the Delphi Group has developed a corporate IQ test. Go ahead, take the test!

"Giving context and revealing who knows what are the two most important aspects of knowledge management," says Geoffrey Bock, a senior consultant with the Patricia Seybold Group in Boston.

Bock says KM products can be divided into several categories.

One category is text search-and-retrieval engines, a well-established technology that is being expanded to encompass relational data, HTML pages, and other forms of information. This software usually includes filtering and notification features, which are designed to reduce information overload. It lets organizations create their own hierarchies of knowledge, Bock says. Included in this category are products from Excalibur Technologies, Fulcrum, Sovereign Hill, and Verity.

A second type of KM software undertakes the task of organizing knowledge into hierarchies, like those at the Yahoo! site, through which users can browse. Companies in this group include Perspecta, Plumtree Software, and Wise Wire.

A third type of KM software is groupware, such as Lotus Notes.

Finally, some software is designed to interview workers to determine what they do, and how, why, and with what information they do it. It then captures that expertise and makes it available organization-wide. An example is Hyperknowledge.

Get in the know

Knowledge management events coming up soon:

June 8-11, San Diego
IKMS (International Knowledge Management Executive Summit)
800-575-3367, 617-247-1511
http://www.delphigroup.com

June 22-24, Boston
November 3-5, Chicago

The Knowledge Management Conference
Sponsored by DCI
Andover, Mass.; 978-470-3880
http://www.dci.com/kmc

October 13-15, Chicago
KMExpo '98
Sponsored by KMWorld; 207-236-8524
http://www.kmworld.com

Delphi's Koulopoulos likens the use of KM software to standing around the water cooler or the coffee machine, informally sharing knowledge. "That sort of serendipity has always played a creative role," he says. "KM is really engineered serendipity."

Building a knowledge base

In the realm of structured data, like that found in databases, datamining has emerged to detect previously unsuspected patterns and connections. KM does the same thing for unstructured, textual data, Koulopoulos says.

Because KM software is designed to find patterns, companies have used it to improve the performance of help desks. Cerner, a Kansas City creator of clinical information systems, uses Casepoint Professional from Inference for both its internal and external help desks. Staffers field 3,000 calls a month, 24 hours a day, seven days a week, from hospitals and laboratories using Cerner's software in mission-critical capacities. Building a knowledge base of the most common user problems has cut training time in half for Cerner's front-line support staffers, says Rhonda Dalzell, knowledge-base manager.

The backlog of support calls declined by 5% each month for a period after the knowledge base came online in June 1997. "Because of new procedures, including the knowledge-management system, we were able to double the number of issues that could be resolved in a single day," Dalzell says.

The quarter after that, clients reported their highest level of support satisfaction in the 10 years it's been measured, Dalzell says.

"We're still evaluating the financial costs and benefits of the knowledge-management system and the new help-desk procedures, but there were so many changes at once that it's difficult to pinpoint the ROI," says Dalzell. "We do know that our client satisfaction spiked dramatically after the change."

"Our client satisfaction spiked dramatically after the change [to a knowledge-management system and new help-desk procedures]," says Rhonda Dalzell, knowledge-base manager at Cerner.

At Broderbund Software of Novato, Calif., internal and Web-based Inference and similar products create casebases from unstructured data, much as database management systems create databases from structured data. These casebases house 7,000 reported problems and solutions for 700 products, says Jim Wilmott, Broderbund's product-support manager. Half of all users' problems are resolved by using the company's Web-based question-and-answer casebase, and nearly three-quarters of the users prefer on-line help to a free phone call, Wilmott says.

"We run several thousand successful [Web] searches each month," he says. "Each phone call costs us an average of $10, and each search is a phone call that wasn't made."

Pooling disparate information

Pulling together knowledge from disparate sources has already helped reduce crime in Coppell, Texas, a town of 28,000 near the Dallas-Fort Worth airport, says an official there. Capt. Wade Goolsby says beta software from GTE called Bastille has resolved three forgeries by linking them to a suspect recently arrested for a separate forgery. "When we don't have to rely on the memory of an investigator, we don't miss details that lead to arrests," he says.

Coppell's system links to police departments of six nearby cities and the local sheriff's office. Plans call for the creation of chat rooms and inter-departmental briefings.

Lessons learned

Users share what they've learned about knowledge management implementation:

Define clearly the limits of the knowledge to be codified to avoid losing your focus. As Rhonda Dalzell, knowledge-base manager for Cerner, puts it: "Don't fall prey to scope creep, where the boundaries of the project keep expanding until you lose track of what you're trying to accomplish."
Don't look for results too quickly. It can take time to build a meaningful knowledge base.
Ignore the hype and cliches. Concentrate on enhancing your organization's key goals and objectives.

Bastille is built around RetrievalWare, a search-engine technology from Excalibur Technologies. "Using RetrievalWare lets Bastille users search conceptually and with synonyms, which they couldn't do using SQL," says Brian Plotkin, operations manager for GTE Law Enforcement Services, a Tampa, Fla.-based division of GTE. It also lets users search through images using keywords, he says. The system stores records on arrests, perpetrators, and types of offense. Any field in any such record can be searched and compared.

You heard right:
Put all your eggs in one basket

KM can be as simple as pooling disparate information in one place. Software producer Platinum Technology has acquired 35 companies over the past three years, increasing its payroll to 5,000 from 1,000. To integrate all those companies' data, it created Jaguar, a huge Web-based pool of knowledge holding the contents of 82 Lotus Notes databases, 13 intranet sites, and 1,028 subdirectories on a common drive, says Glenn Shimkus, director of worldwide sales enablement. On an average day, 40% of the company's employees access Jaguar through its Notes front end, he says.

Do you know how much you know?

The following are selected vendors of knowledge management software. This listing is representative, not all-inclusive.

Dataware Technologies
The Dataware II Knowledge Management Suite

Captures, manages, and shares an organization's documents, Web pages, and other repositories, as well as individual workers' expertise.
http://www.dataware.com
617-621-0820

Excalibur Technologies
RetrievalWare

Offers concept-based searching through about 50 types of files, including documents, spreadsheets, video clips, and still images, then ranks hits by importance.
http://www.excalib.com / 703-761-3700 or 800-788-7758

Hyperknowledge
Hyperknowledge

Interviews workers to determine what they do, and how, why, and with what information they do it; then captures that expertise and makes it available organization-wide.
http://www.hyperknowledge.com
781-935-9019 (U.S.)

Inference
CBR Content Navigator

Creates a case-based database for identifying and solving problems in a limited scope, such as tech support, policies, or procedures.
http://www.inference.com
415-893-7200

Information Discovery
Knowledge Access Suite

Discovers patterns within structured data and builds a pattern warehouse for future pattern finding.
http://www.datamining.com
310-937-3600

Knowledge Discovery Systems
Concept Explorer

Creates sophisticated Web and ASCII queries by creating a network of links between key words and phrases.
http://www.kdsystems.com
650-327-9300

Perspecta
SmartContent System

Provides server-based, drill-down, 3-D hierarchy of indexed information.
http://www.perspecta.com
415-437-4150

Plumtree Software
Plumtree Server

Creates Yahoo!-like card catalogue that indexes information relevant to a company's business.
http://www.plumtreesoft.com
415-263-8900

"We call this knowledge management because it's more than documents," says Shimkus. "We have links to competitors' sites out on the Web, to help salespeople compare our offerings with the competition's. We have corporate travel policies, chat rooms for salespeople--most of the information central to running our business."

Jaguar cost about $750,000 to implement, including consulting, software, and staffing, Shimkus says. By conservative estimate, it resulted in $6 million in productivity and sales gains its first year, and the gains began accruing in less than three months after start-up, Shimkus says.

Serendipity on the rise

Nearly 80 companies now sell software containing the word "knowledge" in the title, says Delphi's Koulopoulos. Last year, only 40 did so. (For impartial guidance, users might want to purchase a study by Doculabs or research from the Delphi Group. Doculabs' study, compares seven vendors' KM products and the Delphi Group's research covers 50 knowledge management products. Delphi's software solutions study also profiles 25 knowledge management products.)

Estimates on the size of the KM market vary widely. CAP Ventures, a consulting firm based in Norwell, Mass., says KM is in place in at least 200 of the Fortune 1,000 companies. KMWorld a publishing and exposition company based in Camden, Maine, predicts the market will be worth $5 billion by 2000.

Koulopoulos also predicts that in the near future, KM will become nearly invisible as companies take it for granted. It will be integrated with datamining so that both relational and textual data can be categorized and searched. (For a related story in this issue, see: Link . Electronic calendars, project management, groupware, and e-mail--now four distinct applications at most companies--will be merged and shared throughout an organization.

A simple innovation already in place at oil giant Schlumberger will become widespread: Every e-mail can be submitted to a knowledge base for indexing. It's a painless way, Koulopoulos says, to build a knowledge base.

"If we can increase the occurrence of serendipity by even 10%, the payback will be enormous," Koulopoulos says. //

Dan Richman is a Seattle-based freelance writer specializing in high technology.


Take a corporate IQ test
How smart is your company? Like an intelligent person, an intelligent company understands itself and its environment.
By Thomas M. Koulopoulos

June, 1998

In this article:
Check out an abbreviated version of the Corporate IQ Quiz
The scorecard
What do Microsoft, Sun Microsystems, and Gillette have in common? They are publicly held companies with huge market capitalizations based on high stock-market multiples. These companies enjoy lofty valuations from Wall Street because of their profitability, which is based on innovation. And their innovation is not just a matter of luck, but the result of their ability to leverage their corporate intelligence.


Thomas Koulopoulos, president of The Delphi Group
Your company doesn't need to have a Bill Gates or a Scott McNealy as CEO to be smart. The intellectual value of an organization isn't the sum of its managers' IQs. Instead, the intellectual value is based on how the collective knowledge of the organization's individuals is distributed and applied to the challenges it faces.

Organizations seeking to measure how well they are leveraging and applying their "knowledge" can take a corporate IQ test. By answering a series of questions and calculating scores based on a proprietary weighting system, a manager can determine the intelligence of his or her organization.

Click here for a printable version of the Corporate IQ test.
Companies that demonstrate high intelligence and success in their ability to innovate are usually incredibly responsive. Look at Microsoft, which turned on a dime to refocus its applications and operating-systems software development on the Internet, or Sun, which reworked a cross-platform desktop operating system into Java, the widely hailed universal platform for the Internet.

A corporate IQ test administered by The Delphi Group looks at about 100 attributes, from how teams are structured, to the specific technologies used to assist the exchange of information and ideas, to the percentage of profits attributable to recent products. Several hundred individuals within an organization take the quiz. Their answers are compiled and analyzed to determine a corporate IQ.

Last year, The Delphi Group conducted a corporate IQ survey of large U.S. companies via the Web. The results from the 350 responding companies can be found at http://www.delphigroup.com/km/ci_responses.html.

The questions on the survey, as in the corporate IQ tests The Delphi Group administers for client companies, focus on four areas of organizational behavior and function:

1. Internal awareness
2. Internal responsiveness
3. External awareness
4. External responsiveness

Internal awareness

Internal awareness is most basic. Corporate intelligence is primarily about an organization's ability to understand itself. Internal awareness is not only having your house in order, but knowing what order your house is in. In simplest terms, internal awareness is the ability to answer the question: What do you do? In other words, what are your core competencies? Sun knew its competencies were in universal platforms long before Java and the Web. If you know your competency, you can quickly map it to the market.

A company that is internally aware has access to disparate pools of knowledge within the organization, even if they might not be considered relevant in the current market context.

Can you answer "yes" to the following corporate IQ questions?

  • Do you have initiatives to capture and share corporate knowledge?
  • Do you have an organizational knowledge base?
  • Do you have numerous "communities of practice?" Communities of practice are groups of individuals who are aligned by their skills and interests rather than by organizational affiliation.
  • Do you have a culture that encourages innovation and allows employees to circumvent the organizational hierarchy?

    Internal responsiveness

    Awareness of its own competencies does not guarantee an organization a clear path to successful products or services. An organization may be well aware of its strengths and of the market demand, yet be unable to effect change within itself quickly enough to meet market requirements.

    The Delphi Group's analysis of its survey of 350 companies indicates that the respondents' external awareness was 30% greater than their internal responsiveness. In other words, they said they were better at understanding the market than at rallying and coordinating their resources to prepare for a response. No wonder so many of the survey respondents indicated that a good idea had a better chance of resulting in a new startup or ending up at a competitor than of being capitalized on by their own organizations.

    Internal responsiveness is a company's ability to translate competencies into teams with the skills and tools to bring a product to market. If you can't move quickly, all the market awareness in the world won't help.

    Can you answer "yes" to the following questions?

  • Do you have a basic skills library that defines the competencies and intellectual products of individuals?
  • Do you have the ability to organize teams based on skills and not on organizational structure?
  • Do you have the involvement of workers on a regular basis in designing their work?
  • Do you have a technology infrastructure that provides workflow, groupware, or collaboration tools for quick team building?

    External awareness

    External awareness is an organization's understanding of how the market perceives the value associated with its products and services. When coupled with internal awareness, external awareness may allow a company to exploit spontaneous market opportunities. External awareness can be heightened through extranets, call centers, and methods that increase your organization's intimacy with the market.

    Can you answer "yes" to the following questions?

  • Do you learn from customer interactions?
  • Do you track customer behavior and buying patterns?
  • Can you interact with the market in a mixed-media mode? For example, can you instantly switch to a telephone conversation from a Web-based dialog?
  • Do you provide mechanisms for customers or prospective customers to tell you what is wrong with your products or processes? Several Internet players are currently developing a company that would gather complaints from consumers and compile them into reports to be sold to consumer-products companies.

    External responsiveness

    The scorecard

    Companies that focus on innovation as the most important competitive criterion consistently have a higher corporate IQ--and are 56% more likely to be responsive in their external environments.

    "Knowledge companies"--professional services firms or software developers, where all workers can be described as knowledge workers--are 75% more likely to have high external responsiveness levels.

    Companies in mature industries are 40% less likely to have above-average corporate IQs.

    Companies where employees are involved in shaping their work have much greater flexibility to adapt to changing circumstances; as a result, these companies are 500% more likely to rank highly for internal and external responsiveness.

    High-IQ organizations are three times more likely than average organizations to prefer a well-honed learning ability, as opposed to an experience of how things are usually done, in their employees.

    High-IQ organizations are twice as likely to generate innovations from nontraditional sources throughout the organization, including nonmanagement individuals and teams that are not explicitly charged with generating innovations.

    Almost two-thirds of organizations make little or no use of "skunkworks" (off-site locations where unusual ideas are developed and tested) as a means for driving innovation. These same companies acknowledge that serendipity plays only a minor role in their ability to innovate.

    "Risk-friendly" companies have levels of external awareness and responsiveness that are as much as one-third higher than the levels at "risk-averse" companies.

    Most of the organizations believe that corporate culture plays a disproportionately high role shaping their corporate IQ, especially their internal awareness and responsiveness.

    High-IQ companies are almost twice as likely to be made up of cross-functional teams from across the organization.

    The single most important component of corporate intelligence is the ability to respond to turbulence. An organization should set its strategy in terms of broad goals and guidelines, and rely on its ability to "turn on a dime" when the organization's competencies align with a new market trend. The intelligent organization's marketing is, in this regard, as removed from traditional marketing as a Patriot missile is from a cannon ball.

    The often-repeated advice about listening to customers is just the first step to establishing external responsiveness. External responsiveness is most often enhanced by using intelligent push/pull technologies or intelligent call centers that deliver products to customers who may not even have thought to ask for them. The survey found a marketing VP who claimed to be able to come up with a new product idea at 8 a.m., roll it out to his call center the same morning, and find out if it would sell by noon.

    Can your company answer "yes" to the following questions?

  • Do you emphasize the speed of accomplishing a task, rather than focusing on its cost?
  • Do you have a focus on building lifetime customers?
  • Do you have a decentralized structure and a cultural commitment to innovation?
  • Do you have a low threshold of innovation investment? In other words, the more you have to spend to verify a good idea, the less likely you are to get the good idea out the door.
  • Do you have leadership that encourages high levels of experimentation? For example, do you have off-site labs where out-of-the-mainstream ideas can be developed and tested? These are known in the aerospace industry as skunkworks.
  • Do you have empowered employees who make decisions at the point of contact with the external environment rather than deferring to higher corporate levels?
  • Do you have digital product-distribution channels that allow you to deploy your products and services via the Web? This applies also to companies such as the Web-based bookseller Amazon.com that sell physical products but use "smart" electronic-commerce channels.

    While an individual may be stuck with his or her IQ, there are techniques and tools to increase the corporate IQ. Some are information-technology related, such as call centers, knowledge management systems, and groupware, but the most important way of increasing corporate IQ is changing the corporate culture. Unfortunately, there's no Cliff's Notes a company can use to make that leap. It takes time. //

    Thomas Koulopoulos is president of The Delphi Group of Boston. He is the author of several books, including Corporate Instinct: Building a Knowing Enterprise for the 21st Century, John Wiley & Sons, N.Y., 1997, and Smart Companies, Smart Tools: Transforming Business Processes into Business Assets, VNR, N.Y., 1997.


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