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Knowledge Management Framework for Process Aligned Organizations: an IBM Case

A research paper for:


The International Journal of Knowledge and Process Management

Authors (* corresponding):

(1) Dr Stephen McLaughlin


School of Business and Management
University of Glasgow
West Quadrangle, Gilbert Scott Building
GLASGOW G12 8QQ Scotland, UK
E-mail: s.mclaughlin.1@research.gla.ac.uk

Stephen McLaughlin is a manager with IBM (UK) Ltd. Most recently his roles within IBM have
been related to supply chain optimization and performance management. He has recently
completed a PhD, which looks at how complex organizations identify and manage inhibitors to
performance related knowledge transfer. As a member of IBM's supply chain organization
this is particularly pertinent, and his research areas of interest cover supply chain
performance, learning organizations, organizational change, and knowledge transfer.

*(2) Professor Robert A Paton


School of Business and Management
University of Glasgow
West Quadrangle, Gilbert Scott Building
GLASGOW G12 8QQ Scotland, UK
E-mail: r.paton@mgt.gla.ac.uk; Tel: 0141 330 5037; Fax: 0141 330 5669

Robert Paton is currently Professor of Management and Associate Dean with the Law,
Business and Social Science at the University of Glasgow. He researches, publishes and
lectures in the field of managing change and has collaborated widely with co-researchers and
various organisations. At present he is concentrating efforts on examining how best to
achieve maximum benefit from the effective knowledge transfer within partnership settings.
He has recently published in the Journal of Information Technology, European Management
Journal and International Journal of Project Management, in addition, he is also finalising,
with James McCalman, the 3rd edition of Change Management: a guide to effective
implementation for Sage Publications.

(3) Professor Douglas K Macbeth


School of Business and Management
University of Glasgow,
West Quadrangle, Gilbert Scott Building
GLASGOW G12 8QQ Scotland, UK
E-mail: d.Macbeth@mgt.gla.ac.uk

Douglas Macbeth is Professor of Purchasing and Supply Chain Management at the University
of Southampton School of Management. He has researched collaboratively with IBM for many
years and his research interests include both the operational and strategic impact of Supply
Chains, especially in Global businesses.

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Knowledge Management Framework for Process Aligned Organizations: an IBM Case

A research paper for:


The International Journal of Knowledge and Process Management

Abstract

Purpose:
Many organizations struggling to capitalise on their knowledge assets tend to let their
knowledge management systems emerge from existing information technology systems and
infrastructure. Within a complex business environment this can cause a mismatch between
how knowledge assets are, and should be managed. The author’s contend that for
organizations where inter/intra collaboration is vital to overall end-to-end performance, such
as in a supply chain, a bottom-up approach to understanding how the different parts of the
organization create and transfer knowledge is a key consideration in the development of the
knowledge management system.

Approach:
The research follows a critical theory approach to identify best knowledge transfer practice
across complex organizations. The research is exploratory in nature and a case study
methodology is used to support this line of inductive theory building. The findings presented
are based on data collated within, and across IBM’s Integrated Supply Chain.

Findings:
In order to help organizations develop dynamic and effective knowledge management
systems the authors’ suggest that organizations need to re-think how they develop their
processes. In essences, organizations need to consider first the relationship between what
the authors see as four key components. These are knowledge strategy, core process
optimisation, core process performance, and knowledge barriers.

Originality:
Based on how information and knowledge are created and shared along a core supply chain
process, and the need to match knowledge management improvement initiatives to end-to-
end process performance improvement the authors have formulated a list of six basic tenets
organizations should also consider when developing a knowledge management system.

Keywords

Knowledge Management Systems, Business Process Re-engineering, Knowledge Transfer,


Supply Chain Management.

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Knowledge Management Framework for Process Aligned Organizations: an IBM Case

A research paper for:


The International Journal of Knowledge and Process Management

Introduction

This paper examines a recent event associated with IBM’s Integrated Supply Chain in
Europe. In an effort to further drive end-to-end performance IBM decided to make significant
changes to its core supply chain process. The supply chain organization was hierarchically
structured and initially all changes where assessed and driven at departmental and functional
level. Unfortunately, the implemented changes did not produce the required process
enhancements, so a different approach to process improvement was required.
What in effect happened was the organization moved from a function to process aligned
assessment of the supply chain process, looking in particular at the processes in question
from a knowledge transfer perspective. This paper will provide an overview as to how the
changes where identified. However, although of interest this is not the key value proposition
of this paper. The point, which the authors wish to focus on, is the approach the organization
took in identifying the necessary changes, their relationship to technology, process, culture,
and people (Kakabadse et al, 2001).
Once the changes where implemented over a 4-6 month period significant overall end-to-end
performance was seen to increase significantly (McLaughlin et al, 2006). From the data
collated whilst monitoring this process of improvement, the author’s have identified six basic
tenets which could be used to help similar organizations trying to drive performance
improvements based on effective knowledge capture, and transfer. What is also important
here is not just identifying the key elements that effect knowledge management system
design, as the author’s believe they relate directly to performance, but also how these
elements interact. It is from an understanding of this relationship, based on observation and
interviews, which the authors’ have developed and refined the six tenets presented in this
paper.
It must be pointed out that these tenets are based on the findings of one case study, and are
therefore, presented as ‘inductive’ theory building in nature.

Effective Management of Knowledge

Managing knowledge capture, creation and transfer is vitally important to successful


innovative organizations (Nonaka et al, 1995), indeed knowledge itself is recognised as an
important component of value creation and competitive advantage (King et al, 2003).
However, many organizations tend to develop their knowledge management systems from

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their existing IT strategy. In essence the knowledge management system becomes an
extension or expansion of the existing IT infrastructure. This approach may not necessarily be
detrimental. However, a failure to consider how knowledge, in particular tacit knowledge, is
created, shared, and utilised, as opposed to simply focusing on how explicit knowledge is
created, shared, and stored may seriously impact an organizations ability to innovate and
build a competitive advantage.
Therefore, in order to improve and encourage innovation an organization must understand
how both tacit and explicit knowledge are created, shared, and utilised across the entire
organization. In order to do this, so the authors believe, organizations must take a proactive
approach in developing their knowledge management system, and resist the temptation to
simply let it emerge from existing IT systems. Throughout this proactive approach the
organization should focus on developing an organization wide strategy that looks at managing
both knowledge assets and information flows and repositories.
So how then does an organization determine the best strategy for managing knowledge and
information across its business? The authors content that in order to do this organizations
must consider the way employees create and share both tacit and explicit knowledge.
Therefore, organization must understand what knowledge barriers are present and active
across the organization (Szulanski, 1999; Barson et al, 2000; Darr et al, 2001; McLaughlin et
al, 2006a). Once the barriers have been identified a clearer understanding as to how to
manage the barriers will emerge.
To this end, what this paper proposes to do, based on primary research conducted across
IBM’s supply chain organization, is put forward a ‘knowledge management system
dependency model’ (KMSDM). This model will highlight the key aspects of a complex
operating environment that should be considered when developing a dynamic and effective
knowledge management system. The authors also identify 6 basic tenets that organizations
should be cognisant of before implementing their respective knowledge management
systems. The author’s believe that adherence to the tenets coupled with an understanding of
the KMSDM will help develop knowledge management systems that are better matched to the
demanding knowledge needs of complex organizations.
The authors’ also make the point that an effective knowledge management system cannot be
deployed as a generic approach across the entire organization. For the knowledge
management system to be effective it must take cognisance of the fact that different parts’ of
the organization will have different knowledge needs, and understanding these needs will
ultimately determine the most suitable knowledge management system.

The need for a knowledge management strategy

The term ‘knowledge management strategy’ is used by the authors to denote the focused,
proactive and premeditated development of a long-term strategy. A strategy that
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specifically addresses the management of both tacit and explicit knowledge in a way that best
supports competitive advantage. Due to the emergent nature of many knowledge
management systems the authors believe that the development of an effective knowledge
management system now demands that organizations re-think how they initially identify their
knowledge requirements. So, what should an organization consider when developing a
knowledge management strategy? Through the primary research conducted by the author’s,
that in turn resulted in the re-assessment of tacit and explicit knowledge needs across a core
IBM supply chain process, the authors have developed a framework (KMSDM) which, they
believe, will help organizations reconsider the way they develop their cross-organizational
knowledge management system(s).
The knowledge management strategy must consider the different types of knowledge
required at certain key points across the organization, and the knowledge transfer barriers
that impact across the organization. A fundamental consideration made by the authors in
developing their findings is that an effective knowledge strategy is based around how tacit
and explicit knowledge is created and flows along core business processes. The reason for
this is simple. The performance of core business processes will have a direct impact on
business performance. Therefore, by concentrating on how explicit and tacit knowledge flows
along the core business processes, an organization can better match its knowledge
management improvements more directly to process performance. In a sense these
processes can be viewed as knowledge arteries or pathways. In general terms organizations
can manage their tacit and explicit knowledge through a combination of personalised and
codified systems respectively.

Codified and Personalised Systems

Hansen et al (1999) and Gupta and Michailova (2004) have identified the main aspects that
separate codified/personalised ‘knowledge’ systems. The important thing to remember with
these two approaches is that they are designed to fit different business environments.
Therefore, one is not always better then the other. The suitability of the approach will depend
on the type of organisation (Tiwana, 2000). The key aspects of both approaches are
compared and outlined in Table I. The Table characteristics outlined are supported by Gupta
and Michailova (2004) and are an expansion on the original comparison as put forward by
Hansen, Nohria, and Tierney (1999). The tension between technology dominance and
interpersonal dynamics in knowledge sharing is reflected in the distinction between
codification/personalisation (Hansen et al, 1999; Tiwana, 2000). Codification is based on
technologies, such as intranets, repositories, databases, etc. Personalisation emphasizes
knowledge sharing among individuals, groups, and organizations through social networking
and/or engaging in ‘communities of practice’ or ‘epistemic communities’ ( Hansen et al 1999;
Brown and Duguid, 2000; Wenger, 2000). Social and interpersonal aspects seem to override
technology-based and procedural mechanisms in terms of ‘meaningful knowledge
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management’ (Hansen et al, 1999). McDermott (1999) concluded that the great trap in
knowledge management is using information management tools and concepts to design
knowledge management systems. Hansen (1999) maintained that strong network ties are
important for the sharing of tacit knowledge while non-redundant weak ties play an important
role for accessing explicit knowledge. According to Johannessen et al (2001) there is a real
danger that because of the focus IT solutions have on mainly explicit knowledge this may
relegate tacit knowledge to the background hence a knowledge mismatch.

(Insert Table I here)

Research Context and Methodology


The research methodology follows a critical theory approach in identifying best knowledge
transfer practice across complex organizations. The research is exploratory in nature and a
case study (Yin, 2002) methodology is used to support this line of inductive theory building.
The findings presented in this paper are based on data collated within and across IBM’s
Integrated Supply Chain. For the purpose of the research the authors’ surveyed over 150
individuals working across an IBM core end-to-end business process; in this case the supply
chain order flow process was used. The author used a semi-structured questionnaire and
one-to-one interviews to identify the organization’s knowledge habits with respect to a core
business process. The analysis of the data has been used to understand the different explicit
and tacit knowledge sharing habits of the workforce, and the perceived barriers which
influence these habits along a core business process. The analysis also identified where
along the core process the existing knowledge management (KM) approach (codified or
personalised) was at odds with employee tacit and explicit knowledge sharing habits. By
understanding the different knowledge creation and sharing practices along the core process
the authors have been able to develop a picture of the dominant knowledge approaches, not
just by business function but also more importantly by the different parts of the organization
as they relate and interact along the core process.
The information gathered through the primary research allowed the organization to re-focus
on how to improve knowledge and information flows in order to improve process performance
(McLaughlin et al, 2006b). The practical application of the findings across the core business
process helped define both the knowledge management system dependency model and
basic tenets for knowledge management system implementation as presented in this paper.
Although the first author is a manager within the ISC organization the research conducted
also formed the basis for the author’s doctoral research (undertaken on sabbatical from IBM),
which in turn is part of an inter-disciplinary, and multi-sectoral research initiative. As there is
little academic research on actual barriers to information and knowledge transfer along
process pathways the authors relied on pre-understanding (Gummesson, 1991) of the
process and organization as a valid starting point for conducting this research. Objectivity and
academic professionalism was maintained by the need to conform to the rigours of an
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ESRC recognized doctoral programme, as well as the requirement to engage with on going
research initiatives.
Ultimately the aim is to develop an underpinning theory and associated models relating to
improving process performance in complex organizations. The research and analysis
outlined in this paper has been conducted using qualitative and quantitative methods with all
data gathering complying with validation criteria as outlined by Yin (2002).

Considerations in developing a knowledge management system

When developing a knowledge management system an organization should assess how it


wishes to capture, create, and share both tacit and explicit knowledge. In reality how this
happens may vary significantly across different organizations. This problem becomes more
acute when trying to define a knowledge management system for a complex organization. If
an organization decides to opt for a mainly codified approach it needs to consider the amount
of interaction employees will have with the systems involved (Hansen et al, 1999). If the
systems are unstructured and allow data to be input as rich text, context might be difficult to
determine, and the employees will have more control over the amount of information they
wish to share. However, at the other end of the spectrum with highly structured data
formatted systems, gleaming knowledge from a ‘tacit to explicit to tacit exchange’ may be
difficult (Marwick, 2001). Also the systems may become inflexible when trying to meet the
demands of a dynamic and changing market place. To that end the choice of a codified or
personalised approach used to support the way an organization views and manages its
knowledge is important (Hansen et al, 1999; Tiwana, 2000). However, even when
organizations have decided on a knowledge management strategy a successful
implementation is not always guaranteed (Kluge et al, 2001; Grossman, 2006). This paper
contends that this is because the assessment for a top-down, organization-wide knowledge
management system fails to properly consider the cultural aspect relating to how individuals
create and share knowledge. Also, current assessments fail to take into consideration the
complexities of today’s organizations. In particular, the complexities inherent in managing a
supply chain, which by virtue of its complexity may span both multiple business functions and
organizations.
To highlight this point IBM’s supply chain organization was assessed using Tiwana’s
framework for determining a dominant knowledge approach (Table II). However, due to the
complexity of the organization involved in the management of core supply chain business
processes, the assessment was not able to clearly identify a suitable dominant knowledge
approach. What in fact the assessment exercise did show was how varied the organization’s
knowledge management requirements were along the core horizontal order flow process.

(Insert Table II here)

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Knowledge management systems for complex organizations

Tiwana’s (2000) comparison between codified/personalised knowledge approaches provides


a clear understanding of the different strategies organizations can take in developing a
‘knowledge aware’ environment. The comparison between codified/personalised is still valid
when one considered that Table I really refers to how organizations handle information
currency and flow within their boundaries (explicit), whilst understanding the need to engage
human cognitive problem solving and reasoning skills over data availability systems when
operating within a unique problem solving environment (tacit). The differences outlined in
Table I refer to two ends of a spectrum and as such an organization should not use a totally
codified or personalised strategy. The question from the authors perspective is how relevant
is the criteria in Table I in determining a suitable knowledge management approach for a
complex organization such as IBM’s Integrated Supply Chain (ISC) group? The questions
outlined in Table I were asked of the IBM ISC group. Table II shows, in the case of IBM,
Tiwana’s criteria show how the need for a codified or personalised knowledge approach will
vary significantly across a complex organization. Therefore, a complex organization’s
knowledge strategy cannot be easily defined against the questions outlined in Table I.
From Table II it cannot be easily determined which dominant knowledge approach should be
used for IBM’s supply chain organization. It does not mean the existing approach is wrong,
just that the assessment, as it stands, is inconclusive with respect to identifying a suitable KM
approach. Developing a suitable strategy must be based on how employees access, create,
and share knowledge.
Gupta and Michailova (2004) believe that an individual’s ability to appreciate new knowledge
is a function of their absorptive capacity (Cohen and Levinthal, 1990; Szulanski, 1996). What
is interesting about Gupta and Michailova (2004) research is that it does not look at the
organization as a single entity but as a collection of departments working together, and the
different demands they place on knowledge creation.
This is an important view as the reality of today’s organization, especially a complex supply
chain, is that roles and expected deliverables will vary between departments/business units.
Therefore, when defining a knowledge management strategy an understanding as to how the
organization’s constituent parts use information and create knowledge must be taken into
consideration.
The reviewed literature suggests that when technology is the primary focus in knowledge
delivery systems they have failed to deliver (Barson et al, 2000; Pawar et al, 2002; Gupta et
al, 2004). The assumption that knowledge management relies heavily upon social patterns,
practices, and processes goes far beyond computer-based technologies and infrastructures
(Davenport and Prusak, 1998; Coleman, 1999). Empirical evidence on inhibitors to
knowledge sharing stresses the importance of behavioural and cultural factors rather than
technological (Skyrme and Amidon, 1997; De Long and Fahey, 2000). The emphasis on the

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role of technology specifically knowledge codification has also been questioned by Spender
(1996) and Tsoukas (1996).
Pawar et al (2002) also question the effectiveness of a purely codified approach to KM. It is
their belief that modern management practice has only tended to focus on centralising,
controlling, and standardising knowledge. Such codification allows the marginal cost of
knowledge acquisition to be reduced by economies of scale (assuming the codified
knowledge is relevant and useful). This underlying philosophy has motivated an immense
interest over the last decade in KM. Pawar et al (2002), at the same time realise the place
technology has within the effective coordination of knowledge. However, they feel that
humans play more of a central role in the identification, acquisition, generation, storage,
structuring, distribution, and assessment of knowledge. It’s interesting that Pawar et al (2002)
views although taking the softer aspects of knowledge management in to consideration, do
not really look at how organizations get their employees to ‘pull’ knowledge (Kluge et al,
2001).
Malhotra (2001) also believes in line with Kluge et al (2001) that there is an overarching need
for the building of a knowledge management culture within an organization, and the
responsibility for developing this culture does not rest with the information technology
specialists. However, in order to achieve this, barriers to knowledge and information transfer
need to be identified and managed (Szulanski 1996; Barson et al, 2000; Argote L, 2005).

Knowledge management barriers

A common theme that has emerged is that KM must be viewed from a holistic perspective
(Malhotra, 2001). Failure to do so will result in an organization’s inability to realise the
potential it has to create and share knowledge (Kluge et al, 2001). Although Barson et al
(2000) provide a comprehensive list of issues that support the findings of previous research;
they do not provide any empirical evidence as to how the barriers impact knowledge creation
and sharing within a complex organization such as IBM’s Integrated Supply Chain activity.
There are also aspects of Pawar et al (2000), Kluge et al (2001), and Szulanski’s (1996)
research that are not taken into account. Of particular interest is the impact an imbalanced
‘push-pull’ knowledge strategy can have on information flow and knowledge creation. Also
Szulanski’s work on identifying barriers which effect knowledge ‘stickiness’ within an
organization need to be considered when assessing barriers in any large complex
organization. Therefore, the findings from the different research papers have been collated
together and assessed for over-lap (McLaughlin et al, 2006a). The barriers identified were
categorised under the TOP headings used by Barson et al (2000) and are shown in Table III.

(Insert Table III here)

This list of barriers identified in Table III was used in assessing the main barriers to

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knowledge creation and transfer along the ‘order flow’ process within IBM’s ISC supply chain.
Barriers impact upon the way knowledge is shared across an organization, and Table III
contains a list of the most commonly identified barriers to knowledge transfer (Szulanski
1996; Barson et al, 2000; Kluge et al, 2001; Argote L, 2005). In order to assess how they
impact across an organization, IBM’s ISC employees, working along a core process, were
asked whether they had any experience of the barriers, and to what degree. From analysis of
their responses it became apparent that the barriers could be addressed by using: technology
(codified), or team building (personalised), or a combination of the two (Hansen et al, 1999).
However, another point to note was that some barriers seemed to have little or no impact
across certain parts of the organization. This does not necessarily mean these barriers do
not exist, but in fact the barriers are already being managed through existing
codified/personalised aspects of the existing knowledge strategy. Table III, in the case of
IBM’s ISC, looks at the identified barriers and matches them to a dominant approach that
minimises their respective impact.

(Insert Table IV here)

What is clear from Table IV is that an assessment of the barriers against an organization
cannot only identify areas where knowledge creation and sharing are impacted, but also how
the organization currently access, value, and share tacit and explicit knowledge. This is
important when defining a KM strategy as the barrier analysis can indicate how individuals
prefer to access and share. It also shows that barriers to information and knowledge sharing
can provide an important control mechanism that prevents the dissemination of
information/knowledge to undesirable locations and recipients (Risk, Self Interest, and
Proprietary Knowledge). Organizations may not necessarily wish to remove such barriers,
but instead strive to understand and manage the barriers as effective information/knowledge
flow control mechanisms. However, before this can be done, one needs to understand how
the barriers manifest themselves across the key business processes.
Table IV also shows how each barrier can be aligned to either a personalised or codified
knowledge approach. Organizations will see differing manifestations of the barriers, and
therefore, the approach chosen will depend upon particular barrier profiles/interactions. That
said, Table IV identifies, in the case of IBM, the dominant approach in managing the barriers
as being a personalised approach. However, one must remember that the barriers may not
always be present, and even when they are their impact may vary.
From Table IV it can be seen that in order to address the identified barriers the main KM
approach is personalised. However, this does not, and should not be taken to mean that
codified implementation methods should be dismissed. The information in Table IV simply
points to the fact that organizations need to:

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1. Identify how these barriers manifest and impact across their key business processes.
2. Understand how information and knowledge sharing happens as a consequence of
the existence of these barriers.
3. Understand whether any of the barriers are important for the operational control of
information or knowledge.
4. Understand and decide on a suitable knowledge management system based on the
existence, and need to manage barriers.

What in effect this means is that the organization more effectively maps its knowledge
management system to how the individuals currently manage knowledge (McLaughlin et al,
2006b). However, it is important to remember the mapping processes must happen along the
defined core business process. That way the barrier analysis across the organization is
assessed against individuals and work groups who are interacting along process pathways.
This is important as the need for performance improvement is dependant on ensuring tacit
and explicit knowledge sharing pathways are managed effectively, not simply within functional
hierarchical structures but along cross-functional process pathways (van Weele, 2005). In the
case of IBM’s supply chain organization the differences in knowledge creation and sharing
practices became apparent when the work groups involved with the order flow process where
questioned about barrier impact. This was done through the on-line questionnaire and a
series of personal interviews with senior management, the analysis of which allowed the
authors to identify where along the core process the barriers existed. By linking a codified or
personalised approach to managing the individual barriers a dominant approach was
identified for the different work groups associated with the order flow process. Figure I
illustrates how the dominant knowledge creation and sharing processes alternate between
codified and personalised in relation to the order flow process.

(Insert Figure I here)

The preference for either a codified or personalised approach will differ from organization to
organization. However, what is important to realise is that along core processes different work
groups will identify with different knowledge approaches. Therefore, because of this the
implementation of an organization-wide knowledge approach will not help effectively
maximise knowledge creation and sharing across core business processes.

Relationship between strategy, barriers, process and performance

From the research findings it became apparent, when looking at end-to-end performance from
a process alignment and KM perspective certain key elements needed to be considered.
These elements are Knowledge Strategy, Process Optimisation, Knowledge Barriers, and

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Process Performance. The elements and their inter-relationships where identified through the
research.
1. Performance is impacted by knowledge strategy alignment – Different parts of the
process require different knowledge approaches (Codified / Personalised / Mixed).
2. Performance is impacted by end-to-end process optimisation – The effectiveness of
the process is dependant on its weakest link. Therefore, the end-to-end process must be
defined in terms of process alignment, and not functional alignment.
3. Performance is impacted by how people / systems create, store, and share
information and knowledge – Barriers to information and knowledge sharing will exist in
every organization. What is important is that organizations understand and manage these
barriers.

From the research findings and the mechanisms required to identify and assess barrier
impact across core processes, the authors’ believe the formation of an effective knowledge
management system cannot be developed in isolation of performance, barrier impact, or the
organizational understanding of key end-to-end processes.

(Insert Figure II here)

Figure II is intended to outline the relationships between what the authors’, based on the IBM
case study findings, believe are the four key elements of any knowledge management
system. This relationship between the key elements does not work in isolation but is also
impacted by larger organizational drivers. The elements tie in closely with existing elements
of the overall business strategy; such as organizational structure and culture (Tsoukas, 1996;
Fuller, 2002; Starkey et al, 2004; Simons, 2005). This interdependency illustrates how the
development of a knowledge strategy is dependant on feedback from process optimisation,
barrier analysis, and performance. This identifies the need to develop a real-time system that
is able to monitor its environment for change; change that is to be expected in a complex
customer focused business environment. The relationships between the four elements are
described in more detail in Table V.

(Insert Table V here)

It is this inter-dependant relationship between knowledge strategy, process optimisation,


barriers, and performance that forms the basis for the authors’ proposed theory. It is the
interaction of these four elements that needs to be considered when developing, and
maintaining an effective knowledge management system.

Developing a holistic approach

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Tiwana’s (2000) criteria for assisting in determining suitable knowledge management
approach requires an assessment based on the type of organization, and what the output
goals are. The assessment does not take into consideration structure (functional or process
orientation), or how it is currently operating. In order to define a strategy, an understanding
as to how the existing organization performs, and what barriers (McLaughlin, et al , 2008)
exist to improving end-to-end performance must be understood.
Tiwana’s (2000) assessment of what distinguishes a codified from a personalised system
provides a good starting reference point. However, the questions asked are general and
provide an indicator which points to a recommended knowledge management approach for
the entire organization. Complex organizations view and share tacit and explicit knowledge
differently at different points along core processes. Therefore, any assessment that can
support knowledge creation and sharing across complex organizations must take into
consideration the fact that barriers and enablers to information/knowledge flow do not impact
uniformly.
The main shortcoming with using the assessment (Table I) to determine the most appropriate
knowledge strategy is that it does not consider the specifics of how information is created and
shared, both from a codified and personalised perspective. Should the responses to the
assessment indicate a personalised strategy there is no indication given as to what barriers
might exist and how individuals and teams should be directed and managed in order to
overcome them. For example the importance in developing a ‘pull’ strategy over a ‘push’
strategy, or the impact of barriers such as motivation, reciprocity, or trust are not considered.
If, however, the response indicated a codified strategy, no warning is given as to the
importance of the information and knowledge creating/sharing issues surrounding legacy
system compatibility, system data formats, and system-to-system compatibility across internal
and external boundaries.
In essence, complex organizations should steer away from developing a ‘one strategy fits all’
approach. The danger here is that such a strategy would fail to meet the specific needs at
key points along the core processes based on their information/knowledge creation and
sharing practices. Instead the organization needs to develop a flexible strategy that responds
to how knowledge is created and shared along the core processes; this may mean a
combination of codified and personalised systems. The difference being the strategy is not
matched to how the organization builds/costs/develops products and services, but rather how
employees and teams access, create, and share information/knowledge horizontally and
vertically internally and externally.

Conclusion
As part of a process improvement initiative over 100 process, system, and organizational
changes were identified and implemented to the IBM end-to-end order flow process
(McLaughlin et al, 2006b). The changes where assessed to see if they impacted codified or
personalised knowledge transfer, and a dominant knowledge approach could then be
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identified for each process work group. The changes, which were identified by a cross-
functional process improvement team (McLaughlin et al, 2006b), were seen to target barriers
which in turn could be identified as having an impact on the preferred knowledge approach
(Figure I) for each of the different work groups connected with the process. Through the
process improvement initiative’s targeting of identified barriers, the end-to-end order flow
process saw a 20-22% improvement in the time taken to accept, process, build, and deliver
customer orders throughout EMEA. In order to achieve this level of improvement IBM had to
approach the process from a ‘bottom-up’ improvement perspective. Knowledge and
information habits had to be considered not at an organization-wide level, but at a process
work group level, and an understanding as to how barriers impacted along the core process
needed to be developed. This resulted in different knowledge approaches being implemented
across the core business process.
Therefore, the author’s believe any approach to defining a strategy must be based on the
core belief that the effective ‘management’ of knowledge is not dependant on the selection of
an organization wide codified or personalised knowledge management system. It is,
however, dependant on the effective management of the tacit and explicit knowledge ‘creating
and sharing’ work environment. The subtle implication here is that the organization needs to
understand, first and foremost, how individuals create and share intangible assets such as
tacit and explicit knowledge across the organization. Trying to capture and directly control
this process through the use of technology will not work. As the act of creating and sharing
knowledge is dependant on an individual’s innate capability and motivation, to do this
relegates the use of technology to a support role in the dissemination of information and
sharing of knowledge. This is an interesting position considering the high value organizations
currently place on the use of technology in shaping and driving both codified and personalised
knowledge management systems (Bhatt, 2001; Kluge et al, 2001; Smith et al, 2001;
Grossman, 2006).
Therefore, it is the contention of this paper that in order to implement an effective knowledge
management system an organization must not just focus on how information should flow
along deployed IT systems, but how individuals chose to interact with information sources, be
they systems or people. Using this belief as the starting point this paper contends that any
complex organization looking to improve learning and knowledge creation/sharing needs to
consider the following proposed six basic tenets of knowledge management system design
and implementation (Table VI).

(Insert Table VI here)

These six tenets should be understood and adhered to, particularly within complex
environments, when developing a knowledge management system. The tenets shape the
knowledge management system by taking a holistic view that incorporates both barriers and
associated solutions. The knowledge management system is not based on a general
14
overview of existing organization wide KM activities. This prevents any preconceived idea as
to whether a codified or personalised approach should be driven across the organization; the
impact of which could create a knowledge management system that tries to manage codified
needs with personalised methods, and vice versa. This is an important point, as different
parts of the organization will exhibit different knowledge and information sharing practices.

15
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Business Strategy Codification Approach Personalisation Approach
Q
What i the organization
is Provide high quality, reliable, fast and Provide creative, rigorous, and highly
business? cost effective services and products. customisable services and products.
How much data is reused to Reuses portions of old documents to Every problem has a high chance of being
support new projects? create new ones. a “one off” and unique problem. Highly
creative solutions are called for.
What is the costing model Price based competition. Expertise based pricing. High prices not
used for organizations detrimental to business. Price based
products or services? competition barely (if at all) exists.

What are the organisations Very low profit margins; overall Very high profit margins.
typical profit margins? revenues need to be maximised to
increase net profits.
How best can the role IT IT is a primary enabler; the objective is Storage and retrieval are not the primary
plays be described? to connect people distributed across applications of IT. IT is used to enable
the organization with codified communication and better contact.
‘knowledge’ such as reports, Conversations, socialization, and exchange
documentation, code etc that is in of tacit knowledge are considered to be the
some reusable form. primary use of IT.
What are the reward Employees are rewarded for using and Employees are rewarded for directly
structures? contributing to databases such as sharing their knowledge with colleagues
Notes discussion databases. and for assisting colleagues in other
locations/offices with their problems.
How is Employees refer to a document or best Knowledge is transferred person to person;
knowledge/information practices database that stores, intra-organizational networking is
transferred? distributes, and collects codified encouraged to enable sharing of tacit
knowledge. knowledge, insight, experience and
intuition.
Where do the organizations Economies of scale lie in the effective Economies rest in the sum total of expertise
economies of scale lie? reuse of existing knowledge and available within the organization; experts in
experience and applying them to solve various areas of specialisation are
new problems and complete new considered indispensable.
projects.
What are the typical team Large teams; most members are Junior employees are not an inordinate
structure demographics? junior-level employees; a few project proportion of a typical team’s total
managers lead them. membership
What do the organization Accenture Consulting, The Gartner Boston Consulting Group, McKinsey and
services resemble? group, Delphi Consulting, ZDNet, Delta Company, Rand Corporation.
Airlines, Oracle.
What do the organization Pizza Hut Dell Computers, Gateway, A custom car, or bicycle manufacturer,
products resemble? Microsoft, SAP, People Soft, Baan, Boeing, a contract research firm, a private
America On-line (AOL), Bell South, investigator.
Lotus, SAS Institute, IBM, Hewlett-
Packard, Intranetics, 3Com
Table I. Codified and Personalised Systems Source: Tiwana (2000)

19
Business Strategy Question IBM ISC Position Approach
What type of business is the Providing high quality, cost effective service. Codified.
organization in?
How much data is reused to support Reuse contract templates and reporting Codified.
new projects? metrics and formats.
What is the costing model used for Price based competition. Cost efficiency – Codified.
organizations products or services? driving cost out of the business…
What are the organisations typical Supply Chain seen as a way of taking cost Codified.
profit margins? out of the business.
How best can the role IT plays be IT used to store and retrieve information. Codified.
described? Also to automate generic / standard
processes.
What is the organization’s reward Employees are rewarded for sharing Personalised.
structure like? knowledge directly with peers, and helping
problem solve in other parts of the
organization.
How is knowledge/information Employees refer to documents of best Codified and Personalised.
transferred? practice, and use databases for storing
common information. However, also
encouraged to share person to person.
Where do the organizations Economies lie in the effective reuse of Codified and Personalised.
economies of scale lie? information. However, subject matter
experts within key areas of the process
support information sharing.
What are the typical team structure Matrix organization with varying sizes of Personalised.
demographics? teams. Organization invests in MBA’s, Post-
grad, and PhDs within supply chain
specialisation.
What services do the organizations IBM services sections moving to a Personalised with strong IT
resemble? personalised services setup. support.
What products do the organizations Core supply chain process is process driven. Codified and Personalised.
resemble? However, supply chain used to support
project type customer requirements.
Table II. Best-fit strategy for knowledge enablement

20
Source Cross category Barriers
Barson et al(2000) Existing Resources (Money, time, technology, skills,
Barson et al(2000) / Kluge et Rewards (individuals rewarded for
al(2001) sharing/creating K)
Szulanski(1996) Arduous Relationship
Barson et al(2000) / Kluge et Culture (K Strategy)
al(2001)
Technology Barriers
Barson et al(2000) Available Technology (Does IT support K requirement)
Barson et al(2000) Legacy Systems (Are Legacy systems impacting K
Organizational Barriers
Gupta and Michailova(2004) Knowledge Strategy Implementation
Szulanski(1996) Causal Ambiguity
Barson et al(2000) Poor targeting of knowledge
Barson et al(2000) Knowledge Cost
Barson et al(2000)/ Pawar et Proprietary knowledge
al(2000)
Barson et al(2000)/ Pawar et Distance (Geo, Culture, language, legal)
al(2000)
Szulanski(1996) Unproveness (Is knowledge rated as being of value)
Szulanski(1996) Organizational Context
Szulanski(1996) Info not perceived as reliable
Szulanski(1996) / Kluge et Lack or Motivation (Knowledge as power syndrome)
al(2001)
People Barriers
Barson et al(2000) / Kluge et Internal Resistance (Protect interests of Org/BU)
al(2001)
Barson et al(2000) Self Interest (expose Knowledge to competition)
Barson et al(2000) Trust (Trust for individuals sharing Knowledge with)
Barson et al(2000) Risk (Fear of penalty, losing profit)
Barson et al(2000) / Pawar et al Fear of exploitation
(2000)
Szulanski(1996) Lack of Motivation (Not invented here syndrome)
Kluge et al Fear of Contamination
Szulanski(1996) / Gupta and Lack of Retentive Capacity
Michailova (2004)
Szulanski(1996) Lack of Absorptive Capacity
Table III. Concise list of barriers Source: McLaughlin et al (2006a)

21
Cross category Barriers Preferred approach to managing barrier.
Existing resources (Money, time, Codified or Personalised – In the case of the ISC the resources that were mainly impacted are personnel, training and time.
technology, skills, data transfer) However, technology might also be a contributing factor in other organizations.
Rewards (individuals rewarded for Personalised – The Rewards system is based on developing a ‘team-working’ approach to improving overall organizational
sharing/creating Knowledge) performance.
Arduous relationship Personalised – Arduous relationships are improved through personal contact and regular meetings
Culture (K Strategy) Personalised – As a ‘Pull’ culture is the desired option this cannot be achieved through technology. Individuals need to be
motivated to seek and use information.
Technology Barriers
Available technology Codified – This barrier specifically looks at technology as an impact on information / knowledge sharing.
Legacy systems Codified – This barrier specifically looks at technology as an impact on information / knowledge sharing.
Organizational Barriers
K Strategy implementation Codified or Personalised – This is a key barrier as it looks at how individuals access valuable information.
Causal ambiguity Personalised – It is more desirable to develop within individuals a better understanding of the E2E process and how the failure to
share information may impact performance at different stages in the process. .
Poor targeting of knowledge Codified or Personalised – When looking to provide answers to unique queries the individual can either target data sources such
as Databases, or they can refer to subject matter experts.
Knowledge cost Funding – This barrier refers to the ability of the organization to finance the necessary codified or personalised initiatives for
improving information / knowledge creation and sharing.
Proprietary knowledge Personalised – Although this refers to how parts of an organization share information / knowledge, it refers to more the intent to
share (trust) than the mechanisms for sharing (technology.
Distance (Geo, Culture, language, legal) Codified or Personalised – Technology may impact the communication and transfer of information between separate work groups
/ individuals.
Unproveness Codified or Personalised – This depends on whether individuals value information / knowledge more highly from systems over
people, or vice versa.

Organizational context Personalised – This refers to how the organization is aligned. Does it’s structure create, or remove barriers to information /
knowledge sharing.

Info not perceived as reliable Codified or Personalised – This may be dependant on the perceived quality and reliability of the existing IT systems in delivering
information in a timely and accurate manner. Or it can depend on how individuals rate the reliability of fellow employees with whom
they have little, or no contact

Lack of motivation (Knowledge as power Personalised – Reducing this barriers impact is about improving individual’s openness to sharing information and knowledge.
syndrome)
People Barriers
Internal resistance (Protect interests of Personalised – This depends on how strongly an individual feels the need to protect their dept, function, organization by restricting
Org/BU) the flow of information / knowledge.

22
Self interest Personalised – This barrier refers to how individuals will restrict the flow of information / knowledge to vendors or business
partners in case the information / knowledge is then passed on to a competitor.

Trust Personalised – This refers to how one individual trusts another to use the information provided in the manner intended.

Risk Personalised –This barrier exists when individuals restrict the flow of information / knowledge based on potential loss of earnings,
customer dissatisfaction, or incurred penalty payments.

Fear of exploitation Personalised – This refers to information / knowledge reciprocity. If individual shares information how important is it they get
information back.

Lack of motivation (Not invented here Personalised - Reducing this barriers impact is about improving individual’s openness to accepting information and knowledge that
syndrome) has been created elsewhere.

Fear of contamination Personalised – Information and knowledge sharing is related to the level of competence / professionalism experienced by the
individual who maybe looking to share.

Lack of retentive capacity Codified – This refers to how well an organization can store new information or knowledge.

Lack of absorptive capacity Codified or Personalised – How does the organization ensure the individual gets access to the right information / knowledge, and
knows what to do with it

Table IV. Approaches to Managing Barriers.

23
Senior Management
Personalised

E2E Customer E2E Re-Engineering E2E Admin Support


Order Management
Personalised Codified / Personalised Codified

Order Flow Process

Order Order Order Order


Fulfilment Scheduling Manufacturing Delivery
Codified / Personalised Codified Personalised Personalised

Figure I. Dominant knowledge approaches across core supply chain process.

Org Structure

e Process Ide
i ti s n ti fy
P ri or
p e/ Optimisation
Sha (PO)
y Imp
Org Strategy nti f a ct
Ide
Desired Performance
Knowledge Process
Target

Impact

Strategy Performance
(KS) Actual Performance (PP)
Imp
a ct a ct
Imp
Tar s
get Knowledge ri er
/R e bar
edu Create / Transfer ti s
ce ori
Barriers (KB) Pr i

Culture
Figure II. Knowledge Management System Dependency Model (KMSDM) with defined
relationships.

24
Relationship between Description.
Elements.
KS to PO Shape / Prioritise – Knowledge strategy will shape and prioritise changes and
improvements needed across core processes in order to meet overall strategic
objectives.
PO to KS Impact – The operation of key core processes, and how they are structured will
impact the decisions which will shape the overall knowledge strategy; such as
existing technology and how it will support / hinder desired strategy, and the
alignment of processes, and how flexible they are at supporting new product /
customer requirements.
KS to PP Desired Performance – The knowledge implementation strategy needs to be
developed in order to support and drive to achieve the desired business
performance for core processes.
PP to KS Actual Performance – When shaping the knowledge implementation strategy
consideration must be given to the actual performance of the core process. This
feedback mechanism is necessary in order to ensure the strategy
implementation methods are targeting key performance issues.
KS to KB Target / Reduce – The knowledge implementation strategy must target barriers
which adversely impact the way information or knowledge sharing across the
organizations key processes.
KB to KS Impact – In order for the knowledge implementation strategy to ensure
information and knowledge flow efficiently across the organization, the
implementation strategy must take full consideration of how barriers impact
across key processes.
PO to PP Impact – Effective process optimisation will improve overall end-to-end
efficiency of the processes being optimised. However, in order for optimisation
to successfully improve efficiency the process must be optimised from an end-
to-end perspective regardless of inter/intra-organizational boundaries.
PP to PO Identify – As processes are being optimised the impact of any change must be
understood, and fed back into the optimisation process.
KB to PP Impact – Information and knowledge sharing barriers will impact end-to-end
process performance if they are not checked and managed.
PP to KB Prioritised barriers – As processes are optimised and barriers identified end-to-
end performance will help identify which barriers are impacting performance.
PO to KB Target – Process optimisation looks to implement changes which don’t just
consider information technology considerations, but also look at how barriers
impact information and knowledge creation and sharing.

KB to PO Impact – As the process is optimised key barrier impact must be monitored to


ensure the dynamic effect of reducing / removing one barrier has on other key
barriers are understood.
Table V. Knowledge Strategy Model breakdown.

25
Basic Tenets for Designing and Implementing Knowledge Management Systems.
1. Knowledge, in itself, cannot be directly managed. However, how knowledge is created and
shared can be influenced through the identification and management of knowledge barriers.
The creation and sharing of knowledge is a human function. As such technology can only be used
to facilitate the dissemination and storing of information. Concerning the human ability to create
and the desire to share knowledge, a knowledge strategy must focus on environmental aspects that
in turn shape an individual’s beliefs, capability and desire to create and share knowledge.
2. Effective development and implementation of a knowledge strategy is dependant on end-to-
end (horizontal) process awareness.
Within a complex organization, such as a supply chain, effective management of process
performance is dependent on an end-to-end understanding of the total process. If an organization
does not clearly define ownership and connectivity between business unit processes performance
issues will be difficult to identify, agree on, and finally resolve.
3. Complex organizations need to develop their knowledge management strategies along core
business processes.
Current strategy development looks to define a knowledge management systems based on broad
aspects of the organization’s business structure, and type of industry. However, for a knowledge
management system to be effective it must look at how the business manages its service and
product delivery to its end customers. By focusing on the core processes the knowledge
management system can be more accurately configured to support improved performance by
targeting information and knowledge flows along the core processes.
4. Knowledge management systems should be linked to directly improving core process
performance.
Knowledge management system needs be linked to operational performance. Many knowledge
initiatives are developed in order to ‘improve data / information storage and retrieval’ or ‘improve
cross-organizational communications’. These initiatives are usually organization-wide, and not
focused on actual barriers that impact specific parts of core processes. The Knowledge
management system should identify and target known barriers to performance. This way
knowledge management initiatives can be directly related to process performance improvements.
5. The development of a knowledge management system is a dynamic process that needs to be
constantly reviewed irrespective of process change.
Knowledge flow barriers impact the creation and sharing of information and knowledge that in turn
can impact process performance. However, the barriers themselves can be impacted by changes
to organizational strategy, culture, organizational structure, external business environment, and
other barriers. Therefore, the knowledge management system must constantly scan and
understand how the barriers are interacting with the core processes, and with other barriers.
6. To ensure process development takes consideration of existing barrier impact,
organizations should develop core processes from a bottom-up perspective.
By developing processes using end-user input, a more accurate alignment can be made between
how the process users create and share knowledge and information, and the performance
requirements of the core process. The bottom-up approach also helps develop employee
engagement and buy-in early on in the processes development.

Table VI. Tenets of Knowledge Management System Development.

26