Here’s one sure way to clear a room.
“Thanks for coming everyone. We’re going to spend the next 90 minutes talking about our knowledge management plans.”
Okay, that was a little rough. But let’s be honest, we tend to judge our books by their covers, and our companies’ priorities by their labels or names. So “knowledge management” probably isn’t the sexiest or most exciting part of your company’s master plan.
But keep reading! After you understand what exactly knowledge management is and how it can help your business grow, you’ll find that the potential return on your knowledge management investment far outweighs the hassle of selling the notion (and its kind of bland title) to your employees.
What is Knowledge Management?
Probably the best definition of knowledge management is, a combination of practices in a company or organization that identifies, organizes, distributes and enables the use of valuable insights and experiences. In English, that means that valuable, useful information is saved in a format that’s readily available to people in your company that need it.
This type of system can help your company make money, save money, and keep customers happy. When implemented correctly and used effectively by employees, it can help your company meet its objectives in terms of sales, profitability, efficiencies, and even product and service innovation…and there’s nothing bland or boring about that.
What Kind of Information is Stored in a Knowledge Management System?
Knowledge management needs will vary, as different types of companies require different types of information to grow and succeed. But broadly speaking, much of the knowledge your company will archive will be classified as customer information, vendor and strategic partner data, and process (or manufacturing) notes.
The complexity of the information, too, will vary based on what your company does, its size, and the number of years you’ve been in business.
Typically, companies keep what you’d call strategic information in their knowledge management systems. This can include notes from discussions with customers, research reports, technical data, blue prints, installation notes, quotes, estimates, white papers, research reports, best practices or guidelines, information on competitors, or anything else that someone else in your organization might need to know at some later date.
The Benefits of a Knowledge Management System
That’s all interesting, for sure. But what are the real, tangible benefits to putting a formal system in place?
Ideally, when a customer calls with a question or problem, or when you receive a request for quotation (RFQ), or a machine breaks down, or when you need to locate a vendor, your people can find what they need – thanks to your knowledge management system.
Again, it’s partially dependent on what exactly your company does, and the maximum value won’t be realized unless your employees make a commitment to using the system to their advantage. That said, here are some typical rewards of an effective system.
- Makes decision making easier and faster
- Leverages expertise and experience of employees across your company
- Shortens sales cycles
- Shortens sales cycles (that’s worth mentioning twice)
- Improves customer service
- Provides access to proven solutions for common problems
- Establishes “institutional memory”
- Minimizes “knowledge hoarding”
- Creates a culture of learning and innovation
Basically, knowledge management systems provide convenient access to information that helps your employees do their jobs better.
Getting Started with Knowledge Management Systems
The knowledge management business has developed into an industry of its own, and as you may have guessed, this being the 21st century and all, there’s usually a heavy IT element involved.
Consulting firms specializing in knowledge management can help you get started, but they tend to have solutions – and pricing structures – tailored to much larger firms. But if you’re serious about getting high-level assistance, contact the Knowledge Management Association, based in Boston, for a referral.
For smaller companies (perhaps $5 million and under in sales), an internally-constructed knowledge management program can probably get the results you need. Here are five steps to get up and running.
- Appoint a knowledge management “champion.” This person should come from a critical department (sales, engineering, distribution, marketing, etc.) and have a sincere appreciation for the long term benefits of knowledge management.
- Have your champion create a repository for information. This can be as simple as a public, shared file on your in-house server. If you have remote locations, you may need to invest in cloud-based software. And make sure data is entered and retrieved via Microsoft Word, or some similar program that everyone is familiar with.
- Create a master directory that contains files matching-up with your most important business functions. Major accounts and product and service lines can have their own files, but other information can be categorized under functional areas (marketing, purchasing, customer service, etc.)
- If possible, design standard forms for your employees to enter information, and from which others can retrieve it later. Standardization will make the process familiar and help encourage participation.
- Publicize the commitment to knowledge management. Schedule a special company-wide meeting, if necessary. Get department managers on board, and encourage and reward participation. Plan a kickoff date, after which participation is expected.
Knowledge Management is only as Good as the People Who Use It
Like any other business process or arrangement, your knowledge management system can only work if you and your people are completely committed to its success.
Getting the system up and running may initially take concerted effort, but the long-term benefits in terms of efficiency and convenience are, for most business owners, worth the investment of time and resources.
Image courtesy University of Pittsburgh
Let MP Star Financial help you manage your cash flow more effectively. Call for more information. (800) 833-3765, extension 150.