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Tuesday, January 11, 2011

Critical Success Factors When Building a Knowledge Management System

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Critical Success Factors When Building a Knowledge Management System[Article Source: http://sharepointmagazine.net/articles/critical-success-factors-when-building-a-knowledge-management-system ]
Overview

In today’s business climate, competitive pressures are greater than ever. Organizations must leverage any competitive advantage to gain or maintain an edge. Or, in the midst of a shrinking economy, there is always a need to do more with less. Recently, many organizations have turned to knowledge management (KM) systems like SharePoint to create new knowledge. Some experts consider knowledge to be perhaps the only sustainable competitive advantage. With knowledge come better decisions, more efficient teams, and a commitment to learning. However, the high risk of failure is well documented which compels us to study why and then define critical success factors that are found within successful implementations.


Working in the researcher’s favor is the overwhelming consistency found when researching these critical success factors (CSF). Furthermore, in a study of thirty-one KM projects1 across twenty-four companies, researchers found that successful projects “had virtually the same indicators.” Additionally, the study concluded that “the unsuccessful or not yet successful projects had few or none of the characteristics.” These findings give us a high degree of confidence in the factors that are provided here. These factors have been selected based on the frequency found in journal articles, various case studies and experience in deploying SharePoint solutions.

Not Just Information Technology

When asking most business or technical people what Information Technology (IT) means, very likely one will get an answer that only involves technology. Somehow, the information element gets lost or subjugated. While technology is an important element, and arguably a CSF outright, the CSF more emphasized in research is recognizing that there is more to the solution than a technology component. Some of the first KM efforts have learned this lesson the hard way, and it is now widely published that a KM implementation must involve people and processes. The KM system is a multidisciplinary effort that depends on organizational learning, sharing habits, and changes to culture; in other words, it is not just IT. As quoted by a KM consultancy firm in New York City, “The biggest misconception that IT leaders make is that knowledge management is about technology”2

Culture

In some sources it is reported that having a healthy corporate culture that is conducive to knowledge sharing is perhaps the most important success factor. Unfortunately, changing culture is also one of the single-most difficult things to do. This dangerous mix helps explain why most KM efforts fail. There are many barriers to why staff are reluctant to share. These include lack of trust, lack of perceived value, or simple knowledge hoarding. Even without these barriers, there is the inertia of instituting any type of change. Companies must have individuals, teams and the organization as a whole believing that sharing knowledge is a healthy and normal way to do business. Having a compatible culture is not optional: either this KM initiative fits “into their organizational culture, or else they should be prepared to change it.”3 If the culture is not KM friendly, “no amount of technology, knowledge content or good project management will make the effort successful”1. Having the right culture can also work in your favor. If employees really believe that sharing knowledge is essential to the organization, they will use every available process or technology to share and learn.

Building a Foundation

In addition to culture, there are other important ingredients that go into the foundation, or infrastructure, for KM. This foundation consists of the establishment of roles and teams that will help build a learning environment. Management should develop effective policies, procedures and guidelines for the organization. This structure, commonly called governance, cannot be understated in importance. Without this, the garden of knowledge can become starved, turn into a jungle, or become overrun with weeds. Some organizations even form a new executive-level role in that of a Chief Knowledge Officer, or CKO, to formalize this in the organization.

Motivating Staff

While motivational incentives alone do not guarantee success, they are still critical to becoming a learning organization. Rewarding employees helps reinforce positive behavior and is one element in changing an organization’s sharing culture. Recommendations include moving away from individual performance incentives and towards group- or team-based compensation. The goal is to create a sense of shared work and purpose which stimulates collaboration and fosters teamwork. These should be tied into job or project performance reviews as well as annual evaluations. The approach should, in general, be long term and be visible across the organization. Keep in mind that not all incentives need to be—or should be—financial in nature. Recognition, expectation, as well as peer pressure can all act as motivational carrots.

Training

Training is also a critical success factor in the deployment of a KM system. In fact, in one study employee training had the strongest correlation with a successful KM implementation4. Training ensures employees understand a new software system and the processes associated with it. While not itemized as a single CSF in this paper, it is clear that user adoption is essential for success, and training is the primary way to prevent refusal or apathy by the staff. This component is not just having everyone sit in a class; often times, it is just getting the word out to the organization. The message can be through seminars, bulletins, announcements or just evangelism to get employees and managers familiar with what KM is.

Making Resources Available

While the goal of KM is to make organizations smarter and more efficient, this will not happen overnight. KM is an investment in the future of the organization, and it takes time, money and effort to get there. Time is needed for training, process re-engineering, occupying new KM roles, and performing knowledge-sharing activities. Money may be needed to purchase new hardware, software and services for a new KM system. Effort is needed in changing culture and convincing staff of the merits of sharing knowledge. Human resource availability is already a common problem with staff already feeling over burdened with tasks. Nothing positive comes from a KM effort that is just dropped into the organization with the belief that staff will either make or find the time. As a result, planning the scope and iterations of a KM effort with realistic timelines and outputs is essential for success.

Executive Support

While there is always the hope that a grass-roots effort will instill KM within an organization, executive support is still necessary. If knowledge is of such strategic importance to the organization, executive and board support is crucial. Beyond a passive leadership role, executives must be KM champions in both actions and words. They establish a clear vision for KM and also ensure alignment between KM strategy and corporate strategy exists. They amplify the importance of knowledge and clarify which types of knowledge are most important. They help ensure the culture changes take effect as well as play a pivotal role in the creation of a solid foundation. Executive sponsors make resources and other funding available to the KM cause. In short, they make it clear that the organization is focused on KM and steer the organization in that direction.

Conclusion

The effective implementation of KM is controlled by certain factors. Understanding up front what these factors are enable proactive management and mitigates a project’s largest risk areas. Keep in mind each organization is different, and while these factors apply to some degree to most all types of companies, the ranking of each will vary. In some organizations, there will certainly be other factors not spelled out. Hopefully with careful analysis of these areas specific to your organization, building a successful KM implementation is well within reach and will also yield a strong return on investment.

References

1 Davenport, T., De Long, D., & Beers, M. (1998, Winter98). Successful knowledge management projects. Sloan Management Review, 39(2), 43-57.

2 Kulkarni, U. Ravindran, S., & Freeze, R. (2006, Winter2006/2007). A knowledge management success model: Theoretical development and empirical validation. Journal of Management Information Systems, 23(3), 309-347.

3 Wong, K. (2005, May). Critical success factors for implementing knowledge management in small and medium enterprises. Industrial Management & Data Systems, 105(3), 261-279.

4 Hung, Y., Huang, S., Lin, Q., & Mei-Ling-Tsai, M. (2005, March). Critical factors in adopting a knowledge management system for the pharmaceutical industry. Industrial Management & Data Systems, 105(2), 164-183.

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