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A Knowledge audit should be the first step in any Knowledge
Management initiative.
KMA assesses what knowledge assets are possessed by an
organization, by knowing it the organization can find the
effective method of storage and dissemination (Liebowitz,
2000).
KM audit provides evidence-based information about current
knowledge status (knowledge health).
As a basis to set up new knowledge management program.
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A knowledge audit, is a qualitative evaluation.
KM audit will look at;
What knowledge are the organization’s needs?
What knowledge assets or resources does the organization has
and where are they kept?
What gaps exist in its knowledge?
How does knowledge flow around the organization?
What blockages are there to that flow (to what extent do its
people, processes and technology currently support or hamper the
effective flow of knowledge?
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The process to identify every knowledge,
Produced by an organization,
Who produce and use it,
How frequent is the knowledge used, and
Where is the knowledge stored.
Once the as is” portrait of the organization has been completed
through information gathering and the knowledge audit, a gap
analysis can be performed
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Knowledge audit may also identify the following (Wiig, 1993) :
Information glut or scarcity
Lack of awareness of information elsewhere in the
organization
Inability to keep relevant information
Significant ‘reinventing’ the wheel
Common use of out of date information
Not knowing where to go for expertise in a specific area
(Knowledge Management Methods: Practical Approaches to Managing Knowledge)
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5 activities of Information Resources Management (Willard –
1993) ;
Identification: What information is there? How to identify and coded?
Ownership: Who is responsible for different information entities &
coordination?
Cost and Value: What is a basic model for making judgments on
purchase and use?
Development: How can we increase the value of information or
stimulate demand?
Exploitation: What is the best way to proactively maximize the value
for money?
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The result of KM audit:
Identification of core knowledge assets and flows—who creates,
who uses.
Identification of gaps in information and knowledge needed to
manage the business effectively.
Areas of information policy and ownership that need improving.
Opportunities to reduce information-handling costs.
Opportunities to improve coordination and access to commonly
needed information.
A clear understanding of the contribution of knowledge to
business results.
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The difference between the organization’s existing and desired
KM state is analyzed to identify the enablers and barriers to KM
implementation
Gap analysis should consider these points ;
What are the major differences between the current and desired KM
Recent situation of the organization?
List barriers to KM implementation (e.g., culture where “knowledge is
power” or where individual possession of knowledge is consistently
rewarded).
List KM leverage points or enablers (e.g., existing initiatives that could
be built upon)
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Gap analysis should consider these points ;
Identify opportunities to collaborate with other business initiatives
Conduct a risk analysis (e.g., knowledge that will gone soon due to
retirements, a few competent individuals).
Are there redundancies within the organization (e.g., the case of the
right hand not knowing what the left hand is doing)?
Are there knowledge silos (e.g., groups, departments, or individuals
that hoard knowledge or block fluid knowledge flows?
How does the organization rank with respect to others within the
industry? (e.g., early adopters of KM, KM leaders, or just becoming
aware of KM needs?)
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This result can be used to list and prioritize KM objectives to be
addressed by the organization.
The priorities should be determined by a consensus of the
organization’s key stakeholders.
The result will be a KM strategy in form of document which
used as road map to implement KM within the organization.
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Assembly Hall, Hoi An
Vietnam, 2012
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Intellectual assets are intellectual materials that have been
formalized, captured, and leveraged to produce higher value
for the firm
Intellectual asset classified as ;
Body of tacit and explicit knowledge about a task, person, or
organization.
The capital resources (human, structural, and relational) that
augment this body of knowledge.
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3 categories of knowledge assets (p. 267)
Human Capital brainpower that left after 5 pm
Structural Capital brainpower that stay after 5 pm (procedures,
system, software, policies, patent)
Customer Capital relationship value (current & future)
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Organization can take inventories of the IC/IA, or even sell
them (training, consultancies)
Example of IA inventories (ideas);
Product formulas
Business plan
Marketing strategies
Vendor terms
Employee information
Product composition
New services process
SWOT analysis
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4 dimensions of business that form Skandia Navigator model
Financial focus, represented in monetary terms.
Customer focus, a financial and nonfinancial measure of the value
of customer capital.
Process focus, address the effective use of technology within
organization
Renewal and development focus, attempts to capture the
innovative capabilities of the organization.
All related to human capital
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3 popular approach for measuring KM are ;
Benchmarking
Balance scorecard
House of quality
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Comparison with key leader in the industry to identify any
best practices that can be applied in other organization
Avoiding wheel reinventing, by looking at what has worked
and what has not worked for other companies operating in
comparable environments or industrial sectors
Lack of sufficient value & flexibility in the future, leads to
other measurement tools and techniques to measure the
effectiveness of KM
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Originated from Xerox in 1970’s, when they learn the logistic
model of LL Bean (p. 272)
Learn from the best to become one
Internal – comparison against other unit
External – comparison with other companies/industries
3 types of benchmarking (read p. 273)
Industry group measurement
Best practices studies
Cooperative / collaborative benchmarking
Competitive benchmarking
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Industry group measurement
Measurement of various aspects of the operation and compare to
similar industry measurements.
Best practices studies
Studies and lists of what works best.
Useful to benchmarking research, but they are not useful as
metrics.
What works best for an organization in its specific environment
may not work the same way in another environment.
Book, consulting, research
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Cooperative benchmarking
the measurement of key production functions of inputs, outputs,
and outcomes with the aim of improving them.
Performed with the assistance of the entity being studied (the
benchmark “partner”).
The entity selected as a benchmark must be the one that has
“best practices” in the area of interest or has won a major national
or international quality award.
Collaborative benchmarking
Both entities study each other and work together to improve.
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Competitive benchmarking
The study and measurement of a competitor without its
cooperation for the purposes of process or product quality
improvement.
A version of competitive benchmarking is the commisioning of a
third party to study a group of competitors and share the results.
The third party consultant is might knows what data belong to
which entity.
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The key steps ;
1. Determine what to benchmark: which knowledge processes,
products, services? Why? With what scope?
2. Form a benchmarking team.
3. Select a benchmarking short list—which companies will you be
benchmarking against?
4. Collect and analyze data.
5. Determine what changes should be made as a result of the
metrics obtained
6. Repeat when an appropriate amount of time has lapse to
measure progress
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The potential benefit ;
Overall productivity of knowledge investments.
Service quality.
Customer satisfaction and the operational level of customer
service.
Time to market in relation to other competitors.
Costs, profits, and margins.
Distribution.
Relationships and relationship management.
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A measurement and management system that enable
organization to clarify its vision & strategy, then translate
them into action
Provides feedback on both the internal business processes
and external outcomes in order to continuously improve
strategic performance and results.
A conceptual framework for translating an organization’s
vision into a set of performance indicators distributed among
four dimensions – Financial, Customer, Internal Business
Process, Learning & Growth
See p. 275 for the illustration of BSC
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The BSC keep the balance between ;
Internal & external measures
Objective & subjective measures
Performance result & driver of the future results
Financial indicator ;
Operating income
ROI
Economic value added
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Customer indicator ;
Satisfaction
Retention
Market share
IBP indicator ;
Cost and quality
Time and resources
L & G indicator ;
Employee satisfaction & retention
Skills set
Career management
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BSC can be expanded to include ;
Objectives the major goals to be achieved (e.g., profitable
growth).
Metrics parameters that will be monitored in order to measure
progress toward these stated goals (e.g., growth in net margin).
Targets specific thresholds to be met for each metric (e.g., 2%
or greater growth in net margin).
Initiatives describe the actions, projects, programs, and so on
to be put into place in order to be able to meet the stated goals.
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Develop to show the connection between true quality,
quality characteristics, & process characteristic
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