Mature knowledge management practices provide many advantages to the organization. These advantages include effectiveness, innovation, performance and growth, diversification, agility, and quality.
Effectiveness:
Diversification:
Additional diversification occurs as a result of the organization’s capacity to build expertise in multiple areas. This leads to the ability to expand to into multiple domain areas and is observed through formalization of additional business units. Each business unit represents an area of expertise for the firm. Effective knowledge management practices enable the organization to develop expertise in new domain areas and therefore grow the firm’s expertise into additional business units (Huang, Shih, Huang, & Liu, 2006).
Agility:
The effective knowledge management practices also results in increased agility. This agility is related to the firm’s ability to quickly acquire and apply new knowledge (Khalifa, Yu, & Shen, 2008). This can come from discovering and applying existing knowledge found in the knowledge repositories. The agility may also be derived from strongly supported collaboration efforts where employees build new knowledge from the knowledge acquired from other specialists in the firm.
Quality:
The final benefit is improved quality. Using knowledge of current processes, best practices, customer needs, and processes of other departments, the organization is able to implement improvements to the design and delivery processes as well as to create and deliver new products and services that better meet customer needs (Lee, Yang, & Yu, 2001; Stewart & Wadell, 2008). This increase in quality is a direct result of knowledge management practices because the knowledge is leveraged to build innovation into the existing processes and support customization for changing needs.
While knowledge management supports the needs of the knowledge worker, the results are very apparent and measurable to the organization. These benefits must be identified and measured in order to help the firm justify the costs of knowledge management initiatives as well as the ongoing effort to support and improve the knowledge management practices.
Effectiveness:
First of all, organizations that establish quality knowledge management practices tend to be able to acquire and respond to new information and knowledge more quickly (Darroch, 2005). This means that these organizations make better use of their knowledge workforce and knowledge assets and are better able to build new knowledge. This also leads to increased innovation.
Innovation:
Organizations with effective knowledge management practices that are able to quickly acquire, build, and respond to new knowledge are more innovative. These organizations can quickly and frequently design and deploy new products and services to respond to changing demand (Darroch, 2005).
Performance & Growth:
The effective and innovative firms possessing solid knowledge management practices realize higher performance. These organizations, through their application of knowledge to deliver innovative products and services, experience higher profits, increased growth, and a greater market share than organizations that are not able to leverage their knowledge assets (Huang, Shih, Huang, & Liu, 2006).
Innovation:
Organizations with effective knowledge management practices that are able to quickly acquire, build, and respond to new knowledge are more innovative. These organizations can quickly and frequently design and deploy new products and services to respond to changing demand (Darroch, 2005).
Performance & Growth:
The effective and innovative firms possessing solid knowledge management practices realize higher performance. These organizations, through their application of knowledge to deliver innovative products and services, experience higher profits, increased growth, and a greater market share than organizations that are not able to leverage their knowledge assets (Huang, Shih, Huang, & Liu, 2006).
Diversification:
Additional diversification occurs as a result of the organization’s capacity to build expertise in multiple areas. This leads to the ability to expand to into multiple domain areas and is observed through formalization of additional business units. Each business unit represents an area of expertise for the firm. Effective knowledge management practices enable the organization to develop expertise in new domain areas and therefore grow the firm’s expertise into additional business units (Huang, Shih, Huang, & Liu, 2006).
Agility:
The effective knowledge management practices also results in increased agility. This agility is related to the firm’s ability to quickly acquire and apply new knowledge (Khalifa, Yu, & Shen, 2008). This can come from discovering and applying existing knowledge found in the knowledge repositories. The agility may also be derived from strongly supported collaboration efforts where employees build new knowledge from the knowledge acquired from other specialists in the firm.
Quality:
The final benefit is improved quality. Using knowledge of current processes, best practices, customer needs, and processes of other departments, the organization is able to implement improvements to the design and delivery processes as well as to create and deliver new products and services that better meet customer needs (Lee, Yang, & Yu, 2001; Stewart & Wadell, 2008). This increase in quality is a direct result of knowledge management practices because the knowledge is leveraged to build innovation into the existing processes and support customization for changing needs.
While knowledge management supports the needs of the knowledge worker, the results are very apparent and measurable to the organization. These benefits must be identified and measured in order to help the firm justify the costs of knowledge management initiatives as well as the ongoing effort to support and improve the knowledge management practices.
References
- Darroch, J. (2005). Knowledge management, innovation and firm performance. Journal of Knowledge Management, 9(3), 101.
- Huang, H.W., Shih, H.Y., Huang, H.W., & Liu, C.H. (2006). Can knowledge management crate firm value? Empirical evidence from the United States and Taiwan. The Business Review, 5(1), 178.
- Khalifa, M., Yu, A., & Shen, K. (2008). Knowledge management system success: A contingency perspective. Journal of Knowledge Management, 12(1), 119.
- Lee, Yang, & Yu. (2001). The knowledge value of customers and employees in product quality. Journal of Management Development, 20(7/8), 691-704.
- Stewart, D., & Wadell, D. (2008). Knowledge management: The fundamental component for delivery of quality. Total Quality Management, 19(9), 987-996.
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