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Essentials of Management Information Systems, 6e

Chapter 11
Chapter 11 Managing Knowledge in the Digital Firm

Managing Knowledge in
the Digital Firm

11.1 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Objectives

1. What is knowledge management? Why do


businesses today need knowledge management
programs and systems for knowledge
management?

2. What types of systems are used for enterprise-


wide knowledge management? How do they
provide value for organizations?

3. How do knowledge work systems provide value


for firms? What are the major types of
knowledge work systems?
11.2 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Objectives

4. What are the business benefits of using


intelligent techniques for knowledge
management?

5. What major management issues and problems


are raised by knowledge management systems?
How can firms obtain value from their
investments in knowledge management
systems?

11.3 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Management Challenges

1. Designing knowledge systems that genuinely


enhance organizational performance

2. Identifying and implementing appropriate


organizational applications for artificial
intelligence

11.4 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

The Knowledge Management Landscape

Important Dimensions of Knowledge

• Knowledge

• Wisdom

• Tacit knowledge

• Explicit knowledge

11.5 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

The Knowledge Management Landscape

U.S enterprise knowledge management software revenues, 2001-2006

Figure 11-1
11.6 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

The Knowledge Management Landscape

Important Dimensions of Knowledge

• Knowledge:
– Is a firm asset
– Has different forms
– Has a location
– Is situational

11.7 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

The Knowledge Management Landscape

Organizational Learning and Knowledge Management

• Organizational learning: Creation of new


standard operating procedures and business
processes reflecting experience

• Knowledge management: Set of processes


developed in an organization to create,
gather, store, disseminate, and apply
knowledge

11.8 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

The Knowledge Management Landscape

The knowledge management value chain

Figure 11-2
11.9 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

The Knowledge Management Landscape

The Knowledge Management Value Chain

• Knowledge acquisition

• Knowledge storage

• Knowledge dissemination

• Knowledge application

11.10 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

The Knowledge Management Landscape

The Knowledge Management Value Chain

• Chief Knowledge Officer (CKO): Senior


executive in charge of the organization's
knowledge management program

• Communities of Practice (COP): Informal


groups who may live or work in different
locations but share a common profession

11.11 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Types of Knowledge Management Systems

Types of Knowledge Management Systems

• Enterprise Knowledge Management Systems:


General purpose, integrated, and firm-wide
systems to collect, store and disseminate digital
content and knowledge

• Knowledge Work Systems (KWS): Information


systems that aid knowledge workers in the
creation and integration of new knowledge in the
organization

• Intelligent Techniques: Datamining and artificial


intelligence technologies used for discovering,
codifying, storing, and extending knowledge
11.12 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Types of Knowledge Management Systems

Major types of knowledge management systems

Figure 11-3
11.13 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

Structured Knowledge Systems

• Structured knowledge

• Semistructured knowledge

• Knowledge repository

• Knowledge network

11.14 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

Enterprise-wide knowledge management systems

Figure 11-4
11.15 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

KWorld’s knowledge domain

Figure 11-5
11.16 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

KPMG knowledge system processes

Figure 11-6
11.17 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

Window on Technology

DaimlerChrysler Learns to Manage


Its Digital Assets
• What are the management benefits of using
a digital asset management system?

• How does ADAM provide value for


DaimlerChrysler?

11.18 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

Organizing Knowledge: Taxonomies and Tagging

• Taxonomy: Method of classifying things


according to a predetermined system

• Tagging: Once a knowledge taxonomy is


produced, documents are tagged with
proper classification

11.19 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

Hummingbird’s integrated knowledge management system

Figure 11-7
11.20 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

Knowledge Networks

Key Functions of an Enterprise


Knowledge Network
• Knowledge exchange services

• Community of practice support

• Auto-Profiling Capabilities

• Knowledge management services

11.21 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

The problem of distributed knowledge

Figure 11-8
11.22 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

AskMe Enterprise knowledge network system

Figure 11-9
11.23 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

Portals, Collaboration Tools, and Learning Management Systems

• Teamware: Group collaboration software


running on intranets that is customized for
teamwork

11.24 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

Portals, Collaboration Tools, and Learning Management Systems

• Learning Management Systems (LMS):


Tools for the management, delivery,
tracking, and assessment of various types
of employee learning

11.25 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Enterprise-Wide Knowledge Management Systems

Window on Management

Managing Employee Learning: New


Tools, New Benefits
• What are the management benefits of using
learning management systems?

• How do they provide value to Alyeska and


APL

11.26 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Knowledge Work Systems

Knowledge Workers and Knowledge Work

Knowledge workers perform 3 key roles:


• Keeping the organization current in
knowledge as it develops in the external
world

• Serving as integral consultants regarding


the areas of their knowledge, the changes
taking place, and opportunities

• Acting as change agents


11.27 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Knowledge Work Systems

Requirements of knowledge work systems

Figure 11-10
11.28 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Knowledge Work Systems

Examples of Knowledge Work Systems

• Computer-aided design (CAD)

• Virtual reality systems

• Virtual Reality Modeling Language


(VRML)

• Investment workstations
11.29 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Intelligent Techniques

Capturing Knowledge: Expert Systems

• Knowledge Base: Model of human


knowledge

• Rule-based Expert System: Collection in


an AI system represented in the the form of
IF-THEN

11.30 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Intelligent Techniques

Capturing Knowledge: Expert Systems

• AI shell: programming environment

• Inference Engine: strategy used to search


through the rule base

• Forward Chaining: strategy for searching


the rules base that begins with the
information entered by user and searches
the rule base to arrive at a conclusion

11.31 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Intelligent Techniques

Rules in an AI program

Figure 11-11
11.32 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Intelligent Techniques

Inference engines in expert systems

Figure 11-12
11.33 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Intelligent Techniques

Capturing Knowledge: Expert Systems

• Backward Chaining: Strategy for


searching the rule base in an expert
system that acts as a problem solver

• Knowledge Engineer: Specialist who


elicits information and expertise from other
professionals and translates it into set of
rules for an expert system

11.34 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Intelligent Techniques

Examples of Successful Expert Systems

• Galeria Kaufhof

• Countrywide Funding Corp.

11.35 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Intelligent Techniques

Organizational Intelligence: Case-Based Reasoning

• Case-based Reasoning (CBR):


Artificial intelligence technology that
represents knowledge as a database of
cases and solutions

11.36 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Intelligent Techniques

How case-based reasoning works

Figure 11-13
11.37 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Fuzzy Logic Systems

Fuzzy Logic Systems

• Rule-based AI

• Tolerates imprecision

• Uses nonspecific terms called membership


functions to solve problems

11.38 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Fuzzy Logic Systems

Implementing fuzzy logic rules in hardware

Figure 11-14
11.39 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Neural Networks

Neural Networks

• Hardware or software emulating processing


patterns of biological brain

• Put intelligence into hardware in form of a


generalized capability to learn

11.40 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Neural Networks

How a neural network works

Figure 11-15
11.41 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Genetic Algorithms

Genetic Algorithms

• Problem-solving methods

• Promote evolution of solutions to specified


problems

• Use a model of living organisms adapting


to their environment

11.42 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Genetic Algorithms

The components of a genetic algorithm

Figure 11-16
11.43 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Genetic Algorithms

Hybrid AI Systems

• Integration of multiple AI technologies into


a single application

• Takes advantage of best features of


technologies

11.44 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Intelligent Agents

Intelligent Agents

• Software program that uses built-in or


learned knowledge base to carry out
specific, repetitive, and predictable tasks
for an individual user, business process, or
software application

11.45 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Intelligent Agents

Intelligent agent technology at work

Figure 11-17
11.46 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Management Issues for Knowledge Management Systems

Implementation Challenges

• Insufficient resources available to structure


and update the content in repositories

• Poor quality and high variability of content


quality because of insufficient mechanisms

• Content in repositories lacks context,


making documents difficult to understand

11.47 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Management Issues for Knowledge Management Systems

Implementation Challenges

• Individual employees not rewarded for


contributing content, and many fear sharing
knowledge with others on the job

• Search engines return too much


information, reflecting lack of knowledge
structure or taxonomy

11.48 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Management Issues for Knowledge Management Systems

Implementing knowledge management projects in stages

Figure 11-18
11.49 © 2005 by Prentice Hall
Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Obtaining Value from Knowledge Management Systems

Obtaining Value from Knowledge Management Systems

1. Develop in stages

2. Choose a high-value business process

3. Choose the right audience

4. Measure ROI during initial implementation

5. Use the preliminary ROI to project enterprise-


wide values

11.50 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Chapter 11 Case Study

Can Knowledge Systems Help Procter & Gamble Stay Ahead of the Pack?

1. Analyze P&G’s business strategy using the


value chain and competitive forces models.

2. What business and technology conditions


caused P&G to change its business
strategy? What management, organization,
and technology problems did P&G face?

11.51 © 2005 by Prentice Hall


Essentials of Management Information Systems, 6e
Chapter 11 Managing Knowledge in the Digital Firm

Chapter 11 Case Study

Can Knowledge Systems Help Procter & Gamble Stay Ahead of the Pack?

3. What is the role of knowledge management in


supporting P&G’s business strategy? Explain how
knowledge management systems help P&G
execute its business strategy.

4. How successful has P&G been in pursuing its


business strategy and using knowledge
management? How successful do you think that
strategy will be in the future? Explain your
answer.

11.52 © 2005 by Prentice Hall