Knowledge Management


In an earlier blog we discussed how data became knowledge after being grouped and contextualised.  But what value has Knowledge?

Knowledge is part of a firm’s intangible assets, which also include Brand, Reputation and their unique business process.  However, knowledge that cannot be shared is next to useless.  If specific critical knowledge only exists in one employees head, then the organisation is at risk of that knowledge walking out the door if he/she leaves.  Only when it is possible to share knowledge throughout the organisation, and learn from it, has knowledge value.


Types of Knowledge

Explicit Knowledge is Documented knowledge.  Whether that’s in structured form, like documents, or unstructured, such as emails, voicemail, graphics, etc.

Tacit Knowledge is less quantifiable.  It’s undocumented – generally stored in an employees head.  It’s knowledge learned from experience, but you’re often not aware you know it.  It’s often when something isn’t working with a program, it triggers a memory; This suggests something to try to resolve the problem, which often works.  You may not have knowledge of the system being coded, but a similar experience with another system can be enough to gain knowledge from.

Knowledge Management

Knowledge Management is the process of capturing, developing, sharing and using organisational knowledge in an effective manner.1

There are known steps in the Knowledge Management value chain.  These steps allow an organisation to learn & change it’s business processes to reflect this learning.

KM Value Chain

  1. Acquire Knowledge.
    • Repositories of structured & unstructured data.
    • Online expert networks within the organisation.
    • Discovering patterns in data.
    • External Pertinent Data
    • Internal Transaction data.
  2. Store Knowledge.
    • Storage that can be accessed by employees as needed – Indexed, tagged, digitised, etc.
    • Expert systems that can help organisations save past knowledge & build new.
    • Rewarding employees for keeping knowledge up to date.
  3. Disseminate Knowledge.
    • Options available for sharing information – wikis, blogs, E-mail, Instant Messaging, Collaboration Tools
    • Key learning routes to help managers deal with important information.
  4. Apply Knowledge.
    • Management Support for process, product & services change as a result of new Knowledge.
    • If an organisation doesn’t change as a result of new Knowledge, they get to return on investment.



People are the holders of knowledge.  They develop, share & use knowledge.  For all the possible Knowledge Management systems available to companies, it’s their people that are the most important store of knowledge.  Unless there is a culture of sharing that knowledge within your company you might as well save your money on the IT spend.  It will fail.  Only when the company culture is right, will you gain benefits from Knowledge Management Systems.





Laudon K & Laudon J. (2014) ‘Management Information Systems: Managing the Digital Firm’ Pearson, Edinburgh.

Enterprise Systems

Enterprise System 2jpg


Enterprise Systems are application packages which allow an organisation integrate their entire IT system together.  In essence, company-wide access to required business knowledge becomes available, rather than independent systems which don’t talk to each other and duplicate data, or manual input of data to reports & spreadsheets.  They support the business processes and flow of information in an organisation, while also enabling easier reporting and analytics within the company.  The final goals being efficient running of the company, increasing work quality, saving employee time, and possible reducing costs.

Real World.

At this point many would think ‘Sounds good, but why would my business need it?’

Let me give you a real-life example.  My Dad was looking for to purchase some Potash for his fruit trees recently.  He rang around the local garden shops & agricultural stores to find the best price-by-weight.  One particular store was about half the price of the others, and even though it was 10-miles further out of town, he considered it worth the drive.  (Considering we were  only talking €8 for 2.5kg versus €8 for 1.2kg it might not have been a decision I would have made!)

Decision made, he drove the extra ten miles to the agricultural store.  He ordered his Potash, paid for it, was issued with an Invoice & receipt, went down to the store to hand in his invoice, and was told they had none in stock!  He then had to return to the Reception area, get a refund for the purchase he wasn’t able to make, then leave for another store.  Not a happy customer.

If we look at the interactions that took place between customer and retailer, how many places could we have made the interaction better?

Now let’s look at the scenario where the company had an Enterprise system in place.  In this case all the companies information would be stored on one database, this would include stock levels & pricing.  The person who took the original phone call could have seen the stock levels at the time they were checking the price.  As a result they could have informed my Dad they didn’t have the stock in place, and he wouldn’t have had an wasted drive & the bad customer experience.

An even better result would be that the company had agreed minimum stock levels saved in the system, say 10 bags of Potash.  When the 10th last bag in stock is sold, the system automatically sends through an order to their suppliers, and the cash accounts would reflect the order.  No interaction required by the store staff to log a low stock level.  And more importantly, no customers turned away unhappy.  In addition, the managers of the store would always have available analytics on the use of the product, and be able to perfect the minimum stock levels for each product to ensure they don’t have too much stock to hand at all times.

Sounds like a better system all round ?!


Enterprise System

An Enterprise System is essentially a centralised database, and a number of software modules which integrate together.  All the different divisions of the company write to the database.  This data is then available for the other software modules to use within the organisation.

In our picture above the Sales Forecast from the Sales & Marketing department can inform the Production Schedules for Manufacturing & Production department.  This in turn will inform the Material requirements, which require financing from the Finance & Accounting department.  All of these conversations require no passing of paper reports between department.

Company Management can obtain point-in-time information on company operations as required.

Enterprise Systems for large vendors include SAP NetWeaver & Oracle Fusion.  With options available on the market for Small & Medium companies, or those who want to use cloud services.

All systems include customisable tables, so you can customise the system to the way your compnay works, e.g. you can organise by location, product range, etc.  If the customisable tables are not enough to get the system to work the way you want it to, you could code changes to the system.  However, this is inadvisable.  Firstly because there are tricky systems to change – you could affect other areas without knowing.  But Secondly these applications are built around best practice principles, and you should look at your business processes first for change.


I think enterprise systems are brilliant.  Having one reliable and accurate source of company data is the Holy Grail for somebody who has worked with multiple legacy systems.  However, there in lies the major problem I see with these – legacy systems & the willingness to do away with old systems.  It’s fine for a small company who want to grow into the future – not too much data or too many business processes to bring across from old systems.  Or even for major multi-national companies with money behind them, e.g. Coca-Cola switching to a SAP enterprise system to leverage their buying power for raw materials (Laudon & Laudon, 2014, pg 372).  However, if your company has been around for a while, you probably have a number of systems, and business processes in place.  Are you willing to spend the time & money doing a full analysis of their systems?  Identifying what can go, what needs to change, and what is absolutely required for your company going forward?  Only then can you even think about switching to an enterprise system.  If you’re not going to take this on board fully, I see it as wasted money, as inevitably, any system will be customised to the point where it no longer functions as well as it can do.

Second major issue to be looked at is security & data access.  This is obviously a general concern for all IT systems.  However, it’s worth spending extra time considering the Security Policy of Enterprise Systems.  In a case where HR had their own Personnel databases, they could control who had access to employee records in-house.  In an Enterprise system, the Personnel data is held on the centralised database.  This means Identity Management needs to be put in place to identify who can have access to which data, and what level of data access they can have, e.g. Read, write, or update access.  The concern I would have is that you’ll need somebody who knows how to customise this access on the staff.  Meaning the company needs IT resources or else pay for consultants to do the customisation.  This is an extra cost that needs to be taken into account going forward with Enterprise Systems.

Overall, Enterprise systems seem a logical way to look after a companies data & provide great advantages to an organisation.


Laudon K & Laudon J. (2014) ‘Management Information Systems: Managing the Digital Firm’ Pearson, Edinburgh.