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Articles: knowledge management

Knowledge management - re-valuing the business
Author: Mark Davis

Knowledge management is a state-of-the-art process that needs to be closely aligned to commercial realisation. The process relies on a series of models that conceptualise a set of well acknowledged functions to reach the desired outcome. The primary goal evolves around providing a high-level asset by revaluing the organisational capital. The subsequent models and definitions relate directly to knowledge management and its processes.

If you regard knowledge management as the activity then intellectual capital management is the deliverable.

The basic inference is that Knowledge Management Processes create a Knowledge Centre and re-values the business. The following premises support this inference.

  • A "knowledge centre" will provide a company and its employees with up to date profiles on a number of topics, e.g. competitors, clients, benchmarks, processes, industry news, events and recommended reading.
  • The core component of knowledge management is intellectual capital.
  • intellectual capital has three segments, human capital, organisational capital and customer capital;
  • organisational capital establishes the foundation for corporate stability. It is the deciding factor to whether the implementation of a knowledge centre will require short or long term advice. Key to the structure of organisational capital is the existing processes that transfer data to information to business intelligence (value-added information) and support the creation, use/reuse and transfer of knowledge. This Capital deals directly with the baseline of the business, such as its processes to establish credible data, information and business intelligence (BI) repositories. Businesses, especially in this country, are demanding more from these repositories.
  • If managed, intellectual capital is an intangible asset that adds formal value to the company balance sheet. Only businesses with sound organisational structures are able to create, reuse and transfer knowledge to gain and sustain a competitive advantage. For instance, a commercial example of this end-process would be the retrieval of a number of data sets to provide a single balance sheet that may indicate a loss of income for a particular quarter. This result would normally be accomplished by processing data to information. The next step is to add-value to the result by determining, how, why, when, where, etc. the loss occurred. Hopefully, an automated function then validates the initial result with a link to a set of qualitative data or supporting documentation. The result would be business intelligence or value-added information. This intelligence is then created as a profile in the Knowledge Centre to be reused and transferred throughout the organisation for decision-making processes. .

Fundamentally, knowledge management represents the value of the business - its intellectual capital.

Value can be only be determined by measuring management, therefore well managed businesses will obviously have greater value. Indeed, it could be argued that badly managed businesses have little or no value and would often be reluctant to value its capital.