Knowledge Management System Introduction Model and Review

Transcription

1 Int. J. Management and Enterprise Development, Vol. 3, Nos. 1/2, A knowledge management system introduction model for small- and medium-sized enterprises Bertram Tan* Department of Business Administration Kun Shan University No. 949, Da-Wan Rd., Yung-Kang City Tainan Hsien 710, Taiwan, R.O.C. tanb@mail.ksut.edu.tw *Corresponding author Hsiang-chin Hung Department of Industrial and Business Management, Far East College No. 49, ChunHua Rd. Hsin-Shih, Tainan Hsien 744, Taiwan, R.O.C. seanhung@cc.fec.edu.tw Abstract: This study aims to facilitate knowledge management for Small- and Medium-Sized Enterprises (SMEs) by the proposed ISO 9000-based Knowledge Management System (KMS) introduction model. A Delphi study was employed to investigate critical success factors of both knowledge management and ISO The result helps SMEs easily build their KMSs. Keywords: knowledge management system; introduction model; ISO 9000; knowledge management; critical success factors. Reference to this paper should be made as follows: Tan, B. and Hung, H-c. (2006) A knowledge management system introduction model for small- and medium-sized enterprises, Int. J. Management and Enterprise Development, Vol. 3, Nos. 1/2, pp Biographical notes: Bertram Tan is Professor and Dean of the College of Management at Kun Shan University in Taiwan. His current research interests include strategic management, supply chain management and knowledge management. Hsiang-chin Hung is Associate Professor at the Department of Industrial and Business Management of Far East College in Taiwan. His current research interests include supply chain management, quality management and knowledge management. Copyright 2006 Inderscience Enterprises Ltd.

2 54 B. Tan and H-c. Hung 1 Introduction: research motivation In recent years, more and more Taiwanese manufacturers have set up their production facilities in China, resulting in low costs, cheaper prices, more competitors and more drastic competition. All these competitive dilemmas may be solved by the implementation of knowledge management to enhance competitiveness. In addition, well-managed quality will now become a competitive advantage to attract more customers (Chin et al., 2002). A comprehensively and properly implemented quality system is the best means for a company to ensure that its products and services will consistently meet customer needs (Awan, 2003). The ISO 9000 series of quality standards is the most widely accepted for such a quality system (Rao et al., 1997; Khan and Hafiz, 1999). The new ISO 9001:2000 developed to assist organisations implementing and operating effective quality management system (QMS). It is an information-sharing tool and the basis for knowledge work. It is through information sharing that a company can gain the knowledge needed to enhance quality and performance (Zuckerman, 2000). Since ISO 9000 QMS has prevailed among SMEs all over the world, and it has common factors and relationships with KMS to some extents, facilitating knowledge management practices by way of ISO 9000 QMS for SMEs may be expectable. 2 Literature review 2.1 Knowledge Management (KM) Knowledge management refers to managing the corporation s knowledge by means of a systematic and organisational specified process for acquiring, organising, sustaining, applying, sharing and renewing both tacit and explicit knowledge by employees to enhance organisational performance and create value (Davenport et al., 1998). Tiwana (2001) claims that knowledge management can be extended to management of organisational knowledge for creating business value and generating a competitive advantage, knowledge management enables the creation, communication, and application of knowledge of all kinds to achieve business goals, Knowledge management is the ability to create and retain greater value from core business competencies. Inevitably, definitions depend on the purposes for which they are intended. 2.2 Critical success factors of knowledge management projects There are lots of articles (Alazmi and Zairi, 2003; Bassi, 2000; Choi et al., 2004; Choi, 2000; Davenport and Prusak, 1998; Finneran, 1999; Greengard, 1998; Haxel, 2001; Heising, 2001; Holsapple and Joshi, 2000; Skyrme and Amidon, 1999; Steels, 2000; Szulanski, 1996; Trussler, 1998; Wiig, 1996; Liebowitz, 2004) illustrating how factors influence the successful implementation of knowledge management. Four kinds of factors, inspired by ISO 9001:2000 process model, are extracted: top management s responsibility, resources and infrastructure, knowledge related processes, and measurement and reward (presented in Figure 1).

3 A knowledge management system introduction model 55 Figure 1 Factors extracted from CSFs literature review Top management s responsibility Resources and infrastructure - Culture - Information technology - Human resource - Organisational structure - Commitment and support - Strategy - Motivation - Knowledge measurement - Reward Measurement and reward - Knowledge creation process - Knowledge storage process - Knowledge distribution process - Knowledge application process - Managerial supporting process Knowledge related processes 2.3 Critical success factors for ISO 9000 The critical factors of ISO implementation can be summarised as shown in the following table. Table 1 Critical success factors for ISO 9000 Authors Macfarlane (1996) Meegan and Taylor (1997) Vloeberghs and Bellens (1996) Critical success factors Breaking the projects into small, distinct projects, and schedules Consultant s help Strongly involved executives Accountable managers for registration in their areas Tight project management Early progress on documentation Incremental success Highly visible metrics Added-value audits Senior executive commitment Personal development needs of senior directors Company-wide employee involvement Reward recognition Orientation towards strategic management Core competencies and organisational capability Strong senior management commitment Saving a well-structured system of procedures An existing quality system Strong employee commitment and motivation Experience with quality assurance Interest from top management

4 56 B. Tan and H-c. Hung Table 1 Critical success factors for ISO 9000 (continued) Authors Garver and Lucore (1994) Lozano and Pacios (1997) Mo and Chan (1997) Rao et al. (1997) Awan (2003) Critical success factors Management involvement An accurate evaluation of the current system versus standard requirements The development of a long-term strategic approach A quality manual-quality system A document control system A supplier quality system Employee involvement training The rigorous application of procedures The adequate composition and motivation of personnel Training, team work Internal audits Top management commitment Leadership Information and analysis Strategic quality planning Human resource development Systematic quality assurance approach Supplier relationships Customer orientation Quality results The people involved The impetus for change The need for improving understanding, belief and communication channels Process standardisation 2.4 Relationship between ISO 9000 and KM Miyashiro (1996) highlights the usefulness of an ongoing assessment process, such as ISO 9000, for creating the shared experiences which form the building blocks of organisational memory. He states that within an organisation, an ongoing assessment process like ISO 9000 can be a useful tool for creating the shared experiences that form the building blocks of organisational memory. Working together in preparation for ISO 9000 audits creates shared understanding as well as common memories, and the ISO documentation helps preserve those memories for future workers. Lari (2002) analyses the information requirements of ISO 9000 standards and identifies the areas where a decision support system can be used. Further, a conceptual framework for company-wide information management is proposed, which explains the modular approach to the system development by introducing and empirically testing the prototype model for a corrective and preventive actions module. Tan et al. (2003) also proposed a model which can facilitate quality-related knowledge gathering and dispatching. The proposed model provides the conceptual structure for a quality assurance information system within organisations.

5 A knowledge management system introduction model 57 Zuckerman (2000) discusses the ISO 9000 revisions and its connection to the knowledge age. He points out that ISO 9000 is a communication tool that is documentation based. When all employees are involved in documenting their work procedures and analysing how the company operates, they are well prepared to perform other tasks that involve gathering, sorting and culling information. They will be able to better monitor information flow throughout a company s supply chain, provide strategic analysis to aid a marketing or sales department, and, in the long run, maximise technology use. He also proposes that ISO 9000 possesses the following knowledge management characteristics as an interpersonal communication tool, a team-building tool for information flow, an information-sharing tool, a basis for monitoring information, a training tool for information management skills and a basis for continued information management. 3 Methodology This study involves three-staged design with distinct methodology in each phrase illustrated in Figure 2. Figure 2 Research framework CSF theory Literature Explore relationship between KM and ISO A1 Theoretical and academic experts Literature review OD Explore interrelationships between QMS and KMS A2 Delphi method CSFs for QMS and KMS Common CSFs for QMS and KMS Build introduction model A3 IDEF0 KMS Introduction model In Phase I of the study, literature review will be employed to explore Critical Success Factors (CSFs) for knowledge management and ISO In the Phase II of the study, common CSFs as well as interrelationships between KMS and ISO 9000 QMS were examined and derived by the Delphi method. In the Phase III of the study, an ISO 9000-based KMS introduction model was developed for SMEs to facilitate both knowledge management and quality management practices on the basis of well-built ISO 9000 QMS.

6 58 B. Tan and H-c. Hung 4 The results 4.1 The Delphi results The Delphi technique was selected as the research method because it is often used to obtain an informed or refined consensus from a group of experts or knowledgeable informants. This group of individuals is commonly referred to as a panel (Couper, 1984). Statistical summaries are used to attain consensus from the panel input. Although, there are no fast rules to guide the design of a Delphi survey, this research employed the process described by Saunders and Jones (1992) because it fits the objectives of this study and the nature of the data needed to be gathered. That is, the questions were specific and targeted rather than open-ended, and we queried informants who had relevant practical knowledge as our panel. The rounds are described in the following sections Panel of respondents Two kinds of experts were chosen as the panel of respondents. One kind of experts is the professional consultant who has profound experience in consulting QMS and knowledge management practice. The other kind is the QMS executive from an ISO 9000-certified company who also has experience or knowledge about implementing knowledge management. Due to the difficulty to find such kinds of experts, 20 people, ten for each kind, agreed to participate in the study. All completed the three-round survey. Descriptive data for the respondents from consultant experts and QMS executives were collected in the first round and are displayed in Table 2. The data indicates that the respondents are experienced in ISO 9000 and KM. The average number of years of experience in ISO 9000 practice for the ten consultants is 10.8 and that in KM practice is 3.5, and for the ten QMS executives, these are 4.8 and 2.9, respectively. Table 2 Descriptive data about the respondents QMS executives Average capital (10000NTD) Average employee number Average number of ISO certificates (years) Average ISO experience (years) Average KM experience (years) Consultants The Delphi instrument The instrument we developed for this study was based on the literature review described in the above-mentioned sections. It contains two parts: CSFs for knowledge management implementation and CSFs for ISO 9000 implementation. In Part 1, 14 factors cited from results of literature review were ranked based on importance to a company trying to implement its knowledge management practice. In Part 2, 16 factors cited from results of literature review were ranked based on importance to a company trying to implement its ISO 9000 QMS. All the items are listed in Table 3.

7 A knowledge management system introduction model 59 Table 3 Number A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 A13 A14 B1 B2 B3 B4 B5 B6 B7 B8 B9 B10 B11 B12 B13 B14 B15 B16 Items surveyed in the Delphi method CSFs for KM Commitment and support from top management Knowledge strategy linking to business strategy Motivation, initiatives and clear objectives Culture with sharing, friendly, trust, and daily work atmosphere Well-developed information technology such as networking, information systems and technical infrastructure Human resource management such as training and learning Organisation context such as organisational structure, empowerment and leadership Knowledge creation process Knowledge storage process Knowledge distribution process Knowledge application process Managerial supporting process such as coordination and control Knowledge measurement Reward for knowledge related work CSFs for ISO 9001:2000 Commitment and support from top management Clear quality strategy linking to business strategy Motivation, initiatives and clear objectives Culture with sharing, friendly, trust, and daily work atmosphere Well-developed information technology such as networking, information systems and technical infrastructure Human resource management such as training and learning Organisation context such as organisational structure, empowerment and leadership A well-managed document and quality record control process The help from external experienced consultants Adoption of process management method Previously implement some kind of quality system or had some quality improvement projects Good relationship with suppliers Understand customers need and focusing on customer A well-managed management review process A well-managed internal audit process Reward for knowledge related work

8 60 B. Tan and H-c. Hung The convergence index and item scores There are two ways to determine if one component converges and gets to consensus or not in this research. First, there must be more than two-thirds of the respondents Scoring 2, 3 or 4 in each round for the component to be classified as an important factor. Second, the standard deviation of the score of each component in one round must be less than that in its previous round. Although Likert-type scales sometimes are considered ordinal scales, researchers in the social and management sciences often treat scale items with four or more response categories as continuous variables and use normal theory statistics including their means (Johnson and Creech, 1983) The results Data from Round 1 were compiled and reviewed for their assessment of the need for additions or clarifications of items and definitions. The resulting list of items served as the basis for the Round 2 questionnaire. A total of four items were deleted at Round 1 and additionally two items were deleted at Round 2 due to the convergence rule that no more than two-thirds of the respondents Scored 2, 3 or 4. The third survey aimed at convergence of the whole survey process. All the remaining items have smaller standard deviations than those in their previous run. Therefore, we can conclude that the results reached a good consensus in this Delphi survey process. The three-round Delphi surveyed results are shown in Tables 4 and 5. Table 4 The Delphi result of KM CSFs 1st round 2nd round 3rd round Average Standard deviation Average Standard deviation Average Standard deviation A A A A A A A A A A A A A A

9 A knowledge management system introduction model 61 Table 5 The Delphi result of ISO CSFs Average 1st round 2nd round 3rd round Standard deviation Average Standard deviation Average Standard deviation B B B B B B B B B B B B B B B B The KMS introduction model The KMS introduction model was derived from the results of the Delphi survey CSFs for KM and ISO Because CSFs represent factors that could help avoid failure while an organisation trying to do some things or projects, the common factors of KM and ISO 9000 can be helpful for SMEs building their KMS under ISO 9000 basis. Common factors such as commitment from top management, infrastructure, processes and measurement are included in our proposed model. There are four stages (KMS planning, infrastructure building, knowledge processes implementation and measurement and improvement) in our proposed KMS introduction model. This framework is shown in Figure 3. Figure 3 A KMS introduction model Infrastructure building - Inform ation technology - Hum an resource - Organisational structure - Culture Knowledge management system planning - Com m itm ent and support - Strategy - Motivatio n - Knowledge measurement - Gap analysis - Reward Measurement and improvement - Knowledge creation process - Knowledge storage process - Knowledge distribution process - Knowledge application process Knowledge processes implementation

10 62 B. Tan and H-c. Hung In Stage 1, top management should express commitment and display clear objectives by way of the planning of the KMS, including setting up knowledge quality and knowledge objectives, defining knowledge-related responsibilities and authorities and assigning a proper Chief Knowledge Officer (CKO). After the planning of KMS, knowledge management infrastructure such as information technologies, human resources, organisational structure and suitable culture should be built in Stage 2 to facilitate knowledge management practice under the planning of KMS. The following stage is the implementation of knowledge management processes including knowledge creation, knowledge storage, knowledge distribution and knowledge application. After all the knowledge processes have been running for a period of time, the designated CKO should take responsibility to routinely carry out evaluation of knowledge-related performance and the gap between the result and original plan, and accordingly, propose some improvement actions. All the performance measurement, gap analysis and improvement proposals should be provided to top management to revise and reset the company s knowledge management objectives. All the four stages in this proposed introduction model could be further described. Figure 4 shows the detailed implementation procedures using an IDEF0 diagram. Figure 4 The detailed KMS implementation procedures Kick off Knowledge management system planning A1 CKO T.M. Knowledge policy and objectives Responsibility/ authority Information technologies Human resources Knowledge creation processes Measurement and improvement A4 Knowledge storage processes Performance Improving actions Gap analysis Training Infrastructure building A2 Culture Organisational structure Knowledge processes implementation A3 Knowledge distribution processes Knowledge application processes ISO related activities Knowledge management system planning stage In Stage 1, top management shall first provide evidence of its commitment to the development and implementation of the KMS and the ongoing improvement of its effectiveness by showing clearly defined knowledge policy and knowledge objectives. According to Gore and Gore (1999), before all the knowledge management processes can be put into place, the first step in any knowledge management programme has to be with the creation of a vision by top management. This vision should reflect the importance to

11 A knowledge management system introduction model 63 the organisation of acquiring, creating, disseminating and exploiting knowledge. Along with vision, a system of corporate values determines the types of knowledge that are desired and the types of knowledge-related activities that are tolerated and encouraged (Miles et al., 1997). Explicitly stated visions, including value statements, can encourage the growth of knowledge within the firm. Trust and openness are commonly cited as two of these explicitly stated values that promote knowledge management behaviours (Von Krogh, 1998). The second thing top management should do is to ensure that the responsibilities, authorities and their interrelation are defined and communicated within the organisation. For a KMS to be more effective, teams to implement it need to be more comprehensive than teams for traditional IT jobs. A KMS is built on expertise, knowledge, understanding, skills, and insights brought into the project (Tiwana, 2001). Companies implementing knowledge management must draw expertise from different sources such as IT department, team-based local experts, external vendors, contractors, partners, consultants and end users. All these characters must have clearly defined responsibilities and authorities. The third thing that top management should do is to assign chief knowledge officer who shall have responsibility and authority that includes ensuring that processes needed for the KMS are established, implemented and maintained. The CKO reports to top management on the performance of the KMS and the needs for improvement. In order to accomplish these tasks, Earl and Scott (1998; Fend Information, 1999) pointed out that the CKO position requires a blend of technical, human and financial skills. At a minimum, a CKO should have a clear understanding of knowledge management concepts, familiarity with knowledge-oriented organisations and technologies and a strong appreciation for and the primary processes of the business Infrastructure building stage From the perspective of knowledge work, KMS is a system that provides for the creation of new knowledge, the assembly of externally created knowledge, the use of existing knowledge and the finding of knowledge from internal and external sources. In order to achieve these purposes, companies should build sufficient infrastructure to facilitate knowledge work. Gold et al. (2001) examined the issue of effective knowledge management from the perspective of organisational capabilities and suggested that a knowledge infrastructure consisting of technology, structure and culture along with a knowledge process architecture of acquisition, conversion, application, and protection are essential organisational capabilities or preconditions for effective knowledge management. Furthermore, Meso and Smith (2000) mentioned that the core of KMS is the people. It includes all the organisation s stakeholders employees, owners, customers, suppliers and regulators/legislators. However, employees are the most significant participants and could be seen as a kind of infrastructure important for KMS implementation. Therefore, after the knowledge policy and objective have been set up and responsibilities and authorities have been defined, the designated CKO should take care of building the necessary infrastructure.

12 64 B. Tan and H-c. Hung Information technology Information technology comprises a crucial element of the infrastructure needed for the creation of new knowledge. Through the linkage of information and communication systems in an organisation, previously fragmented flows of information and knowledge can be integrated (Daghfous, 2004; Teece, 1998). These linkages can also eliminate barriers to communication that naturally occur between different parts of the organisation. Since information technology is multifaceted, the organisation must invest in a comprehensive infrastructure that supports the various types of knowledge and communication that are critical. The technological dimensions that are part of effective knowledge management include business intelligence, collaboration, distributed learning, knowledge discovery, knowledge mapping, opportunity generation, as well as security (Grant, 1996). Human resources Employees are the key source of the intellectual capital acquired and managed by the KMS. They articulate personal tacit knowledge into the explicit knowledge resident in the organisation s databases, systems and operating technologies. In doing so, they make personal knowledge available for corporate use. The general literature on Human Resources Management (HRM) indicates that the unequivocal commitment of the Chief Executive Officer (CEO) and the senior management team of an organisation are necessary for knowledge management in areas related to education and training, communication, selection, recruitment, improvement and performance. Another literature also indicates that the involvement of organisational stakeholders in management, planning and decision making concerned with resource allocation, education and training also increases the likelihood of better knowledge management (Vloeberghs and Bellens, 1996). Organisational structure Organisational structure is important in leveraging technological architecture. Although intended to rationalise individual functions or units within an organisation, structural elements have often had the unintended consequence of inhibiting collaboration and sharing of knowledge across internal organisational boundaries. For example, structures that promote individualistic behaviour in which locations, divisions, and functions are rewarded for accumulating information can inhibit effective knowledge management across the organisation (O Dell and Grayson, 1998). In fact, the optimisation of knowledge sharing within a functional area can many times diminish the sharing of knowledge across the firm. Taken to a larger level, the optimisation of knowledge sharing within the firm can diminish sharing across a supply chain (Gold et al., 2001). It is important that organisational structures be designed for flexibility so that employees would increase their sharing and collaboration across boundaries within the organisation and across the supply chain.

13 Culture A knowledge management system introduction model 65 Perhaps the most significant obstacle to effective knowledge management is organisational culture. Shaping culture is critical in a firm s ability to manage its knowledge more effectively (Davenport et al., 1998). Dialogues between individuals or groups are often the basis for the creation of new ideas and can, therefore, be viewed as having the potential for creating knowledge. Employee interaction should be encouraged, both formally and informally, so that relationships, contacts and perspectives are shared by those not working side by side (O Dell and Grayson, 1998). This type of interaction and collaboration is important when attempting to transmit tacit knowledge between individuals or convert tacit knowledge into explicit knowledge, thereby transforming it from individual to organisational level. In addition, employees should have the ability to self-organise their own knowledge and practice networks to facilitate solutions to new or existing problems and to generate or share knowledge (O Dell and Grayson, 1998) Knowledge processes implementation stage After all the necessary infrastructure to facilitate knowledge management practice has been built or proceeding, the implementation of knowledge management processes can start. In describing the knowledge management process, the KM value chain which divided all the knowledge-related processes into four activities, knowledge creation, knowledge storage, knowledge distribution and knowledge application, is used. Organisational knowledge creation involves developing new content or replacing existing content within the organisation s tacit and explicit knowledge. Through social and collaborative processes as well as an individual s cognitive processes (e.g., reflection), knowledge is created, shared, amplified, enlarged and justified in organisational settings (Nonaka, 1994). The second process is knowledge storage. Knowledge storage, the storage, organisation, and retrieval of organisational knowledge, also referred to as organisational memory (Stein and Zwass, 1995), constitutes an important aspect of effective organisational knowledge management. Organisational memory includes knowledge residing in various component forms, such as written documentation, structured information stored in electronic databases, codified human knowledge stored in expert systems, documented organisational procedures and processes and tacit knowledge acquired by individuals and networks of individuals (Tan et al., 1998). The next important process of knowledge management in organisational settings is the transfer (distribution) of knowledge to locations where it is needed and can be used. However, this is not a simple process in that organisations often do not know what they know and have weak systems for locating and retrieving knowledge that resides in them (Huber, 1991; Paiva, 2003). Communication processes and information flows drive knowledge distribution in organisations. Gupta and Govindarajan (2000) have conceptualised knowledge transfer in terms of five elements: 1 perceived value of the source unit s knowledge 2 motivational disposition of the source 3 existence and richness of transmission channels 4 motivational disposition of the receiving unit 5 the absorptive capacity of the receiving unit.

14 66 B. Tan and H-c. Hung Finally, an important aspect of knowledge-based theory of the firm is that the source of competitive advantage resides in the application of the knowledge rather than in the knowledge itself. Grant (1996) identifies three primary mechanisms for the integration of knowledge to create organisational capability: directives, organisational routines and self-contained task teams. Directives refer to the specific set of rules, standards, procedures and instructions developed through the conversion of specialists tacit knowledge to explicit and integrated knowledge for efficient communication to non-specialists. Examples include directives for hazardous waste disposal or airplane safety checks and maintenance Measurement and improvement stage A focus on resources or processes does not necessarily guarantee the effectiveness of KM. Organisations must ensure they have management systems and measurement systems both in place, and knowledge workers actively participate in the management and measurement activities. Measurement systems provide metrics to measure the effectiveness of the management processes and provide feedback to management. To measure the effectiveness of KM, an organisation must develop a suitable set of metrics to perform the necessary measurement. For example, Kaplan and Norton (1996) suggest creating a scorecard to look at financial, customer, internal and growth measures to keep track of IS performance, internally and externally. Finally, after measurement, rewards and incentive systems must work closely with the management systems and measurement systems to ensure the seamless integration of processes within the KMS. Moreover, the gap between KMS planning and the realised results must be analysed by the designated CKO, and improvement actions must be proposed to top management to further improve the whole KMS. 5 Conclusion Current literature on knowledge management assumes a uniform type of organisations: large, international and dominated by Western management structures and ideals (Lim and Klobas, 2000). Most SMEs may not share the context, structures and ideals of the organisations on which current theories are based. It seems difficult and unrealistic for SMEs to build and maintain their KMSs because of lack of resources and inexperience in complicated ITs. Nevertheless, most of the SMEs in Taiwan have experience with implementing ISO 9000, and it is beneficial for companies to construct their KMS according to the results of this research. This research has examined the CSFs in KMS and in ISO 9000 QMS for SMEs. An ISO 9000-based KMS introduction model was proposed. This model offers SMEs which want to proceed their KMS with their experience in ISO 9000 QMS. Because the respondents of the Delphi survey all come from SMEs, this model is applicable only to SMEs. For SMEs that want to facilitate their knowledge management practice, these models may be helpful. SMEs should follow the steps recommended, showing commitment and support from top management, providing sufficient resources, implementing knowledge processes and continually evaluating performance of their KMSs. Any insufficiency of these steps would probably result in unsuccessful KMS. For academic researchers, it is

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