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Saturday, November 6, 2010

What are Knowledge Management Benefits To Service Industry

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Knowledge Management Benefits To Service IndustryIn twenty-first century, the industry competes heavily. Entrepreneurs try to use technology to develop their business
. However, using technology generates high costs. So companies need to find a new way to survive by using the existing resources to gain maximum benefit. Knowledge management is one of interesting alternatives as it can deliver competitive advantage such as greater competencies and synergy, more balanced decisions and less errors, more creativity and innovation, broader collaboration and knowledge sharing, and easier links to expertise and deeper understanding.Knowledge management has been used in most product-based companies and it has also extended to use in service sector.

However, there are not many studies looking closely to explain the situation in the service industry while service sector is continuously growing.Thus, it is necessary to understand the situation and how the service sector develops knowledge management strategy. Knowledge management can play an important role to make companies compete productively.Service industry is the one sector of industry involves the provision of services to other businesses as well as to final consumers. Activities are mainly concerned with providing services rather than tangible objects for the benefit of the end users and/or other industries. It includes insurance banking and finance, provision of gas and electricity and water, health care, transport, communications, entertainment, retailing and wholesaling, and central and local government."Knowledge is a fluid mix of framed experience, values, contextual information,and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knowers. In organizations, it often becomes embedded not only in documents or repositories but also in organizational routines, processes, practices, and norms."Knowledge helps producing information from data or more valuable information from less valuable information. Thus, knowledge is basically similar to information and data, although it is the richest and deepest of the three, and is consequently also the most valuable.When a company creates knowledge, it has to concern about interactive teamworking process.

This process involves different backgrounds, cutting across organizational boundaries, and combing skills, artifacts, knowledge and experiences in new ways. There is an assumption that when people work together, they can produce more creative results than they work individual. It is hard to establish effective teamwork because people come from different backgrounds and have different knowledge bases.Teamworking is a key factor to create knowledge with mutual understanding of deep tacit knowledge based on shared experiences together for a long time. Tacit knowledge is knowledge that is in people's heads and it is hard to explain or communicate with other people. For explicit knowledge, it is knowledge that can be expressed in text form or by speaking. Explicit knowledge is easy to explain and communicate.While advance computer and technology have helped people to link with each other,people also concern about geography affecting them in the new knowledge economy.The emergence of virtual space does not decrease significance of physical space . Even though people have the fast pace of technology to communicate and the ability to transfer data across distances, they still want to contact with others in person by gathering together for events, hand shaking and hugging .

Time is another factor that needs to be considered because virtual communities or online societies make people work with their colleagues anytime and anywhere. For example, an employee can work at four o'clock in the morning with other employees from other continents.Another aspect of time is obsolete knowledge. Although sharing knowledge over time is seen as important, people should not overestimate past knowledge. Knowledge from the past cannot always serve as a basis for the work of today; things can change quickly and radically in innovating industries.Nowadays the creation and application of new knowledge is essential to the survival of Intangible products - ideas, processes, and information - are growing in the share of global trade from the traditional, tangible goods of the manufacturing economy.The application of new knowledge is increasingly important in the society. The increasing in turnover of staff. People do not take a job for life any more. When they leave an organization their knowledge is gone with them.Large global or even small geographically dispersed organizations do not Fast changing in technology, business and society can cause the obsolete knowledge. As things change so quickly, in some companies, their knowledge base declines. As much of 50 per cent of what the staff knew five years ago is probably obsolete .To create a Knowledge Sharing Culture, it is about making knowledge sharing the norm. Sharing knowledge is not just sharing information. The purpose of knowledge sharing is to help a whole organization to reach its business goals. It is not sharing for only the benefit of one department.Sharing knowledge is as significant as learning to make knowledge productive. It is hard to change a culture.

The company which wants to create a knowledge sharing culture needs to encourage it staffs to work together more effectively, to collaborate and to share - lastly to make organizational knowledge more productive. However, Direct and indirect rewards must be put in place to encourage knowledge sharing.Knowledge workers might be financially or admirably rewarded for contributing to knowledge work. However, it might not be true in all cases because it is not possible to make people share their knowledge by only rewarding them. Some employees are motivated by more than just money such as more experiences and knowledge they can gain by themselves during doing knowledge work. Hence it needs to ensure that appropriate rewards are in place.Behavior of knowledge sharing can be encouraged when the employees realize that knowledge-sharing is valuable for them. Sharing knowledge helps employee do their jobs more effectively. Moreover, it helps them keep their jobs; helps them in their personal development and career progression; rewards them for getting things done,understand what they know in the whole picture. Expertise learnt and applied in one part of the organization is not leveraged in another continuous innovation process will sustain the competitive advantage in most companies.


Reference:
[1] Renita Dubey http://www.articlesbase.com/management-articles/knowledge-management-and-its-benefits-to-service-industry-2051629.html

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