Tag: KMS

  • Costs and Benefits in KMS

    Costs and Benefits in KMS

    What are Costs and Benefits in KMS?

    First, understand what is KMS (Knowledge Management Systems)? after Learn Costs and Benefits in KMS: KMS is a method for the improvement of business process performance. A knowledge management system is most often used in business in applications such as information systems, business administration, computer science, public policy and general management. Common company departments for knowledge management systems include human resources, business strategy, and information technology.

    Knowledge Management Systems (KMS) like any other information systems have its benefits as well as costs, weighing the benefits in the relationship with the costs will probably provide a basis for deciding whether to invest in it or not. What is Market-Based Management?

    Costs of KMS

    Although knowledge management system is beneficial and important to the organization, it also involves some cost. These costs vary quite a bit, depending on the size of the organization, the current level of infrastructure and the scope of knowledge management initiative. Also, the cost depends on whether or not there is an existing infrastructure.

    According to Marks, the first step in determining the return on invest­ment for a knowledge management project is to deter­mine the costs. On the surface, this may seem deceptively simple, but there are costs involved in a knowledge man­agement project that may not be readily obvious to the manager who is not experienced in estimating such proj­ects. Costs here include, but are not limited to the costs of hardware, software, and training. 

    1. Software: Obviously, the project will incur the cost of whatever software is chosen to be used. This can range from free, to nearly free, to several thousand dollars for an enterprise-wide knowledge management (KM) system. In addition, any technical infrastructure for the software that is need­ed will also have to be counted in the costs. The cost of software depends on whether the organization wants to use the bare-bones knowledge management systems, which may use e-mail, Web servers, corporate intranets, newsgroups, shared file sys­tems, or centralized databases and other software the company likely already has and uses, or can obtain for little or no cost. Or wishes to institute a level of knowledge integration and manage knowledge transfer which will involve investment in a commercially available product designed spe­cifically for the tasks that the company wishes to be able to accomplish with the knowledge management project.

    2. Hardware: This involves the costs of infrastructure that will be needed to support the system. There might also be the need for internet and network connections. Any upgrades to the com­pany’s network that will be needed in order to handle in­creased traffic attributable to the knowledge management system might also need to be considered. Using current systems and equipment will lead to heavier loads than in the past, and this will need to be considered too.

    3. Labour: It involves the cost that will need to be considered is the cost of employing a member of the IT staff to install the KM hardware and software on all needed servers and client machines as well as configuring the application to meet the need of the business. There will also be the need for maintenance. Knowledge will need to be input into the system in order for it to be useful, the costs for doing this might be heavy early on, but will steady out in the future, and will be based on the use of the system. The cost of training should also be considered as a labor cost due to the time sacrificed for it.

    Other, not so obvious costs that will be incurred include employee training, incentives to entice employees to use the KM system, and the labor costs of employees choosing to use the knowledge management system instead of working on other aspects of the job. Most of these labor costs will become benefits fairly readily, but they are an investment made by the company and must be counted in the costs of the knowledge management project in order to accurately measure or predict the cost of the project. 

    Implementation costs are usually moderate to acquire the hardware, develop internal software or license software from 3rdparty suppliers, and to train employees to utilize the system effectively.  However, the potential savings and increased efficiencies are enormous.  The payback period for most companies is estimated to be six months or less. The payback period will decrease as the size of the organization increases, and with the number of global locations that the company operates. McDonald and Shand ‘reported that a typical consultant-assisted knowledge management system costs between $1.5 million to develop’.

    Benefits of KMS

    Before any organization can invest their funds in anything, there must have been some expected or anticipated benefits or returns, there is need to highlight the benefits and cost of knowledge management systems. This system just like any other information systems is meant to add value to the organization, but knowledge management system, deal particularly with the intellectual asset of the organization. Although the major reason why most organizations invest in Knowledge Management Systems (KMS) is to gain competitive advantage, other derivable benefits are:

    1. Efficiency and Problem Solving: Knowledge management systems when done right will help in ensuring faster response time to key issues, make service delivery faster and also enhance problem-solving. This is because when best practices are well codified, stored, and made available, and when methods for problem-solving can be maintained, and made available instantaneously, employees won’t have to spend time looking for answers. Problem-solving will be eased as it will be possible to solve problems anytime and anywhere which will make the organization more productive, efficient and effective. Due to the nature of this organization, (consulting firm), the application of knowledge management systems will help in carrying out the needed services efficiently. For example, expert and dependable advice will be given to clients based on the availability of experiences and knowledge for comparison and justification.

    2. Better Decision Making: Knowledge management systems will help in making better decisions. When knowledge and experiences are pooled together, there is an avenue for critical considerations and judgment before decisions will be made. This is particularly important when there is need to compare and contrast before arriving at a decision or conclusion. The availability of needed idea, information and knowledge will help in making sure that the right decision is taken after the critical and intense examination which will also make the decision more concrete, justifiable and dependable. This will make this firm able to make necessary decisions on the needed improvements that will make our services more competitive and acceptable (preferable to a client). 

    3. Quality Service Delivery: One benefit that will be obtained will be the increased quality of services after using the KM systems. An employee who uses the knowledge manage­ment system may be able to obtain knowledge that will reduce the number of defective services that employees deliver or will increase the effectiveness and quality of the services being delivered. Higher quality services mean fewer dissatisfied clients, which mean fewer complaints from clients. Fewer complaints improve the company’s revenues and profit and are a benefit that can be attributed to a knowledge management system. If a company can notice a decrease in clients’ dissatisfaction since the knowledge management system was launched, at least a significant portion of this increase can be attributed to the KM system and marked as a benefit for it. This means that this organization will be able to come up with better and more competitive services due to the possibility of sharing valuable organizational information, knowledge, intelligence, and experiences among employees. This serves as a good way of avoiding or reducing redundancy and client satisfaction will be secured due to the improvements that will be introduced.

    4. Reduced Cost: Cost reduction is also a benefit that can be realized through the use of a knowledge management system. ‘Cost reduction represents approximately one-quarter of benefits from KM projects’. Besides la­bour costs, knowl­edge management systems may also yield savings in material costs. This can be as simple as savings on paper that were previously needed to disseminate memoranda that are now being replaced with entries in the knowledge management program, but the true benefit of cost reduc­tion through knowledge management is realized when employees discover and share methods for reducing costs on final products. Management will likely notice these savings but will need to speak with employees to understand that the source of the savings is indeed from the knowledge management system. This means that this organization will be able to reduce the cost of inviting or seeking professionals, due to the availability of needed knowledge and experiences.

    5. Speed and Service Delivery: Knowledge management systems help in compressing time and space for efficiency, reducing time wastage, which means the increase in workers’ productivity. Employees who use the knowledge management system will be able to work faster, because they will find information on the knowl­edge management environment that will allow them to avoid repeating the work of others, such as a snippet of computer code, or allow them to forgo extensive research that would ordinarily be needed to address a situation, or simply enlighten them to practices others have found that allow the job to be done more quickly. The only way to measure this labor cost savings will be through interviews with the employee. The employee’s estimate and confidence in it will be calculated as a benefit for the knowledge management system. This means that clients will be attended to as fast as possible, which will give the firm an advantage, especially by reducing delay.

    6. Reduced Training Time: An investment in these systems will help to reduce training time for new employees. Due to the availability of the needed knowledge and experiences, employees will be able to constantly apply them which will improve their ability. This training time for employees will be reduced as a result of the knowledge they are able to acquire. This means that employees are being trained indirectly through the application of knowledge management systems which reduces direct pieces of training. This will lead to a kind of strategic movement through well-coordinated efforts among peers. Thus the organisation will be able save time and money.

    7. Retention of Intellectual Properties: Knowledge management system helps in retaining intellectual properties after the employee leaves if such knowledge is codified. This is because when knowledge is codified, it is added to the organisation’s knowledge repository (a collection of internal and external knowledge), thus when knowledge is captured from an employee, such knowledge will remain even after he/she leaves. This means that it will be possible for the organisation to have a large knowledge base of several knowledge and experiences as a result of the historic knowledge contribution process. This will also help in building employees to become professionals as a result of the availability of previous experiences and knowledge for acquisition. 

    8. Increased Revenue and Development of New Business Ventures: Knowledge Management Systems helps in providing the personal capacity for revenue generation. It allows employees to work together and share ideas about certain plans especially in a global firm. Due to the cross-pollination of ideas among employees, there is a possibility that new business ventures will be developed and this will lead to an increase in revenue for the organisation. Due to the availability of ideas and experiences, this organisation will be able to manage the available knowledge for productivity and profitability.

    9. Sharing Business Resources over Long Distances: Through the use of knowledge management systems, the sharing of business resources is made possible. This is because when ideas and knowledge are pooled together, a knowledge-base is created from which each employee can access required information over long distances. If used effectively, these systems will be able to foster the company’s culture across geographic boundaries.  All employees will become part of an overall network, each with simple access to the intellectual capital of every member within the network. As a result employees will be able to perform better and jobs would be done faster. This is very important for a global consultation firm like this where relevant information is needed for service delivery. There will be no need to depend solely on the headquarters before needed information are gotten.

    Costs and Benefits in KMS

  • Knowledge Management Systems

    Knowledge Management Systems

    Definition and Meaning of KMS (Knowledge Management Systems); A method for the improvement of business process performance. A knowledge management system is most often uses in business in applications such as information systems, business administration, computer science, public policy, and general management. Common company departments for knowledge management systems include human resources, business strategy, and information technology.

    Here is the article to explain, What is KMS Knowledge Management Systems? Definition and Meaning

    Every organization aims to achieve its set goals and objectives as well as secure a competitive advantage over its competitors. However, these cannot achieve or actualized if staff or workers act independently and do not share ideas. Today, prominent businesses are becoming more aware that the knowledge of their employees is one of their primary assets. Sometimes organizational decisions cannot be effectively made with information alone; there is a need for knowledge application. An effective knowledge management system can give a company the competitive edge it needs to be successful, and, for that reason, knowledge management projects should be a high priority.

    Development;

    Knowledge Management Systems (KMS) “developed to support and enhance the organizational knowledge processes of knowledge creation, storage, retrieval, transfer, and application (Alavi & Leidner, 2001) This means that for any organization to be competitive in today’s global world there is a need for combination or pooling together of ideas by employees to achieve teamwork; this is in support of the saying that ‘two good heads are better than one. Since organizational knowledge is one of the important assets of the organization; it needs to manage like other assets, hence the need for what is Knowledge Management Systems (KMS).

    Knowledge management systems ‘collect all relevant knowledge and experience in the firm; and, make it available whenever and wherever it needs to support business processes and management decisions. Knowledge here could refer to as the understanding that a person has gained through education, experience, discovery, intuition, and insight or a combination of instincts, ideas, rules, and procedures that guide actions and decisions. It is an intangible asset that is unique and can use to achieve long-term strategic benefits or advantages. This is because knowledge has more competitive significance than physical assets in a consulting organization like ours that relies on unique competencies and methods. Also, unlike other physical assets of an organization, knowledge is not subject to the law of diminishing returns as are physical assets, but increases in value as people share it.

    Understand;

    Knowledge can in a form that can state, codified or written, and understandable by everyone (explicit) or in a form that cannot express easily and unconsciously applied but understood by individuals (implicit or tacit). Therefore, what knowledge management systems do is to provide collaborative capabilities; using groupware to facilitate sharing of explicit and implicit knowledge among employees. It also means to change people’s behavior to make their experience and expertise available to others. These systems involve a process that helps organizations identify, select, organize, disseminate and transfer important information; and expertise that is part of the organizational memory that typically resides within the organization in an unstructured manner. Learn more about;

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    Objetives;

    The main objective of knowledge management systems is to identify knowledge; and, explicate it in a way that it can share formally, and thus re-used. It helps in transferring the intellectual assets of the firm to value processes such as innovation and knowledge acquisition. It means improving the organization’s ability to execute its core processes more efficiently by capturing intellectual assets for the tangible benefit of the organization. Knowledge Management Systems also aim at codifying knowledge (such as best practices); organizing it in repositories for later access, finding knowledge (using search engines and other schemes); and providing organized ways to find people who possess the required knowledge.

    It poises towards determining what knowledge the organization has, as well as acquiring the knowledge that is lacking to provide collaborative capabilities and facilitate sharing of explicit and implicit knowledge among employees. Knowledge management systems enhance knowledge creation through learning, knowledge sharing, and communication; through collaboration as well as knowledge capture and explication, use and reuse, access, and archiving. It means transforming information and intellectual assets into enduring value for the organization; and, transforming knowledge to add value to the process and operations of the business. It also aims at leveraging knowledge strategically to business to accelerate growth; and innovation as well as using knowledge to provide a competitive advantage for the business.

    Problems and Solve;

    These systems also capture knowledge about how problems can solve to promote organizational learning, leading to further knowledge creation. In doing this, intellects that are in the form of tacit knowledge in individuals, groups within the organization; and other areas transfer to value processes that lead to innovation, knowledge creation, and replenishment of the organization’s core values. Knowledge management systems also capture knowledge in an external repository, identify needed knowledge and help in matching and exchanging knowledge. Some technologies that support this system are e-mail, document management, search engines, enterprise information portal, data warehouse, groupware, workflow management, and web-based training. Knowledge management systems also mean to provide collaborative capabilities, using groupware to facilitate sharing of explicit knowledge among employees; its activities or processes are supported by software such as Wincite, Grapevine, and Knowledge X.