Information and Knowledge Management in Organisations

This paper looks at fundamental information management (IM) and knowledge management (KM) principles, concepts and techniques. It presents a diagrammatic representation (developed for the purpose of this paper) of the author’s personal perspective on IM and KM, and the relationship between them. Finally, the paper discusses how two organisations, NASA and Xerox, implemented IM and KM, by analysing the case studies by (Bohmer et al, 2010) and (Biren, 2000), respectively.

Introduction

The rich picture on the integration of information management (IM) and knowledge management (KM) in organisations, shown in Figure 1, starts with enunciating the difference between data, information and knowledge, i.e. information is structured and meaningful data, and knowledge is information with application. As Orna (2004) argues, the most important task of information staff is to make information meaningful, through context, style and packaging.
Information is, as mentioned in the literature on information management, acquired, created, approved, indexed, stored, retrieved, revised, communicated and destroyed, these steps constituting the information life cycle. Knowledge, on the other hand, is acquired, shared, and used. Knowledge can be either explicit or tacit: explicit knowledge is easy to articulate and turned into information, and tacit knowledge is very difficult to articulate because it involves personal concepts and know-how. Tacit knowledge is “stored” only in people’s minds and in a company the individual tacit knowledge of all the employees forms the organisational knowledge. As shown by Nonaka and Takeuchi’s (1995) SECI model, “knowledge creation is a spiralling process of interactions between explicit and tacit knowledge”:

• Socialisation deals with the acquisition of tacit knowledge through conversation, mentoring and training;
• Externalisation deals with articulating individual tacit knowledge in order to transform it into explicit knowledge;
• Combination is the use of existing explicit knowledge to obtain new information, and
• Internalisation implies the newly acquired explicit knowledge is brought back into the organisation by the individual as new know-how, expanding and/or changing the organisational knowledge and maybe leading to organisational learning.

Knowledge management became an important issue based on, as Little et al (2002) argue, the discovery that people are the focus of much organisational knowledge, the changing economic environment, and the realisation that innovation is achieved through the creation and use of knowledge. As Figure 1 shows, knowledge management involves the sharing of knowledge within and among communities via procedures, methods and routines that support socialisation among employees.

Figure 1. Rich picture of integrative perspective on information and knowledge management in organisations

Information Management

Information management, or the management of information, implies the collection, dissemination, auditing, analysis, storing, confirmation and distribution of information or explicit knowledge, as can be seen in Figure 1.
Davenport (1997) identified four steps of the information management process: “determining information requirements; capturing information; distributing information; and using information”, detailed hereinafter. The first step – determining information requirements – is the most important one, and it dictates the company’s appropriate information strategy. Capturing information consists of scanning – with the use of librarians or technologies such as search engines and WWW, categorising, formatting and packaging information. Davenport (1997) points out that the last step – packaging – is important because it determines the medium (or package) in which information is presented, and the medium alongside context and style, makes information meaningful. Davenport (1997) says the distribution of information is achieved through a combination of people, technology and documents, and sometimes it is necessary to give information in order to capture new information. Information use also covers the storing of information in databases and document repositories.
Wilson (1997) defines information management as: “The application of management principles to the acquisition, organisation, control, dissemination and use of information relevant to the effective operation of organisations of all kinds”.
In the case of Xerox (Biren, 2000), information on fixing the machines was initially contained in a lengthy manual the engineers had to use.
In the case of NASA (Bohmer et al., 2010), information was distributed in the most part through emails. Both in the case of Columbia and the case of Challenger, there were divergent opinions between engineers and management, but in the case of Challenger information flow was interpreted differently and in the case of Columbia – seventeen years later – information did not seem to flow. In both cases – Challenger and Columbia – there were well-known problems that were ignored and uncertainty about the impact of the technical problems on the space shuttles (bad prediction of the outcome).
Choo and Bontis (2002) identified three types of organisations: the hierarchy, the market and the newest form of organisation, the trust. By the description offered by Bohmer et al. (2010), NASA is a hierarchical organisation, meaning it relies on authority. On the other hand, Baumard (1999) calls NASA a “puzzled” organisation, because of its “thinking within the thinkable” or “thinking within the recognisable” mantra.

Knowledge Management

The steps of a knowledge management process are knowledge creation, sharing and use. Davenport and Prusak (1998) say that in knowledge management, technology can be used to enable the distribution of knowledge, such as web-based intranets and the world wide web (WWW), but the technology that is supposed to handle the creation or use of knowledge – such as expert systems, artificial intelligence and neural nets – has and still is under development, being negligible today. Binney (2001) gives more examples of technologies used for knowledge distribution, enabling communication – email, voicemail, video conferencing – or enabling training – computer based training and online training.
Xerox (Biren, 2000) defines “ten domains of knowledge management”, also present in the rich picture (Figure 1):

• “Knowledge sharing (KS)
• Instilling responsibility for KS
• Capturing and reusing past experiences
• Embedding K in products, services, processes
• Producing K as a product
• Driving K generation for innovation
• Mapping K of experts
• Building and mining customer K bases
• Understanding and measuring the value of K
• Leveraging intellectual assets”

Little et al (2002) defined knowledge management at Xerox as very process-oriented: “Knowledge management is the discipline of creating a thriving work and learning environment that fosters the continuous creation, aggregation, use and re-use of both organisational and personal knowledge in the pursuit of new business value”.

The subject of knowledge management is rather new. Although some, like Watson (2002) may argue that ‘knowledge management’ is just a fad, and the vast amount of published material on the subject of ‘knowledge management’ is mostly theoretical, Hansen et. al (1999) offer examples of organisations which successfully implemented a KM strategy – Andersen Consulting, Ernst & Young, McKinsey & Company, Bain & Company, Access Health, Memorial Sloan-Kettering Cancer Center in New York , Dell and HP, and an example of the consulting company CSC Index, which failed to successfully implement a KM strategy. More examples of companies which successfully implemented a KM strategy are given by Earl (2001): Xerox, Shorko Films, AT & T, Frito-Lay, Dow chemical, IBM, BP Amoco, Shell, Skandia, British Airways, Skandia and Unilever. So, we can see companies from various industries – consulting agencies, health care, IT, oil industry, air travelling and so on –use a KM strategy and have done for years.

Choo and Bontis (2002) say that an organisation can either focus on a strategy of knowledge exploitation meaning the organisation uses its existing knowledge and capabilities, or expand its capabilities by focusing on knowledge exploration, which aims to create new knowledge. The Xerox case study (Biren, 2000) is an example where knowledge exploitation was not working for the company, that is the repair engineers’ user manual was not enough to effectively help them fix the Xerox machines. By introducing the Eureka system –where each engineer who encountered a new problem (not covered in the user manual) posted the problem and its solution, which was open to ratings (thumbs up or down), and could prove very useful to other engineers who encountered the same problem – Xerox applied a knowledge exploration approach that, according to Biren (2000), served the company very well by enabling the engineers in charge of fixing Xerox machines to communicate individual knowledge across geographical boundaries and be more efficient in their work. So, this exploration approach gathered new knowledge from people working at Xerox (not customers), and the newly created and codified (made explicit and written in the Eureka system) knowledge was exploited by the same group of people alongside the less useful manual, also included in the Eureka system.

Information and Knowledge Management

The difference between IM and KM is very much related to the difference between information and knowledge. Knowledge management also covers the “management” – creation, sharing and use – of tacit knowledge.
According to Orna (2004), the domain of information management covers “maintaining information resources to meet change, co-ordinating information resources, managing information emerging from knowledge exchange/market, using information systems and IT to support people in knowledge and information interactions and transformations, and making lessons of experience accessible” and the newer domain of knowledge management covers “transformations from knowledge to information than to new knowledge, minimising transformation costs, maximising gains, supporting people in managing their knowledge, knowledge exchange/market, knowledge obligations and organizational learning”. So, managing knowledge rather than information brings to the table “organisational learning”, which is crucial if the company is at its beginning, or if the environment the company operates in has changed and the organisation has to adapt in order to survive.

Orna (2004) says the shared territory of IM and KM involves “knowledge and information implications of organisation’s aims, knowledge and information policy/strategy, value added by using knowledge and information, environmental monitoring for change and effects of knowledge and information”. Orna (2004) observed that in organisations, IM and KM are integrated and both managed by human minds and technology alike, powered by the transformation of knowledge from tacit to explicit and then back to tacit

Many, including Hansen et al (1999), Binney (2001) and Earl (2001), have analysed existing knowledge management strategies and proposed taxonomies to help companies identify the right knowledge management strategy. All taxonomies have as a first step identifying the information requirements of the organisation. Since these KM strategies handle both explicit and tacit knowledge, they can be considered information and knowledge management strategies.

The simplest categorisation of KM strategies, however, is the one proposed by Hansen et al. (1999), described briefly as: he covered companies from consulting, health care and the IT industry and identified two strategies of managing explicit and tacit knowledge –codification and personalisation. The codification strategy (Hansen et al., 1999) works best in an environment where the company relies mostly on explicit – thus can be codified – knowledge because they have an economy of reuse, and so they “invest heavily in IT” and the knowledge distribution is people-to-documents a lot of the time. The other KM strategy – personalisation (Hansen et al., 1999) – works if the company relies mostly on tacit knowledge because they have an economy of “expert economics”, and so investing in codifying the knowledge they only use once would be unprofitable and the knowledge distribution is achieved through office meetings and other forms of direct face-to-face interaction, like socialising.

Hansen et al. (1999) go on to say that these two opposite strategies must co-exist in the company in an “80-20 split”, giving the three mistakes that “can quickly undermine your business”: if the company focuses exclusively on one strategy and ignores the other, or if the company tries to follow both strategies equally, or choosing the wrong strategy.

Although the rich picture from Figure 1 shows information management as associated with the codification strategy and knowledge management as associated with the personalisation strategy, it is important to mention that KM is not exclusively on Personalisation Strategy and IM is not exclusively on Codification Strategy. Both strategies – codification and personalisation – handle both information and knowledge, but not equally: the codification strategy works where the company relies heavily on explicit knowledge (or information) to solve problems and uses tacit knowledge much less, while the personalisation strategy works where the company relies heavily on tacit knowledge.

Binney (2001) identifies six types of knowledge management, still a co-existence between codification and personalisation, but a much more complex model than Hansen’s (1999). Binney (2001) introduces enabling technologies which can be attributed to the codification and personalisation strategies, mapped on the requirements of each strategy. Since the codification strategy relies mostly (not exclusively) on explicit knowledge (i.e. information), which can be articulated and written down, organisations that apply this strategy make use of technologies like relational and object DBMSs (Database Management Systems), document management tools and library systems for information storage and distribution. On the other hand, organisations that apply a personalisation strategy work with mostly (not exclusively) tacit knowledge – which resides in people and is shared mostly through face-to-face interaction – and make use of technologies that enable communication and training, such as email, chat rooms, computer based training, online training (e-learning), video conferencing, voicemail. Both strategies make use of the underpinning technologies of portals, the internet, intranets and extranets.

Information and tacit knowledge can both – in different ways – use information systems and IT for creation, distribution and use of knowledge, but only information can be stored (as data and documents) using IT because an organisation’s tacit knowledge is “stored” in the minds of its employees. In general, information or explicit knowledge can make the best use of IT. Technology for creating and using (tacit) knowledge – as McDermott (1999) and Davenport and Prusak (1998) say – borders science-fiction because these are very complex processes and competences of the human mind.

Conclusions

The differences between IM and KM are given by the latter’s attempt to “manage” tacit knowledge, which started with Nonaka and Takeuchi’s (1995) SECI model. The literature on IM and KM, as well as integrating them, is vast and mostly theoretical. The advantages of integrating IM and KM are outlined by Orna (2004) and several models of KM strategies have been identified – containing theory and examples.

It can be argued that the National Aeronautics and Space Administration (NASA; Bohmer et al, 2010) and XEROX (Biren, 2000), handled information and knowledge management – that is information with application – very differently. In the case of Xerox (Biren, 2000) they took a knowledge exploration and sharing approach by implementing, in collaboration with PARC (Palo Alto Research Center Incorporated), and using effectively the Eureka system, called by Biren (2000) “a community-based KS [knowledge sharing] solution”. What made the Eureka system practical for knowledge sharing was that the engineers used it properly, by posting their individual solutions for unique problems (not covered in the user manual), motivated just by getting thumbs up for good solutions and the best being appreciated by the others. Due to the success of Eureka, Xerox, unlike NASA, could be considered a case of “organisational learning”.

In the case of NASA (Bohmer et al, 2010), on the other hand, there were serious technical-management communication problems. The news about the dangerous likelihood of the Columbia shuttle exploding got to management but was dismissed because of commercial pressure. Management’s excuse was that they needed further proof, and if that was from the start very difficult for the engineers to get, it was made impossible by the dismissal of one engineer’s request to get images necessary for the proof on account of the request not being “official”. Specifically, there was one engineer who predicted the shuttle would explode and although he jumped through hoops to inform management, management decided not to delay the re-entry of the Columbia space shuttle into the Earth’s atmosphere, and did not even attempt saving the seven-member crew, because they did not want to fall behind schedule because of commercial pressure, and they also under-estimated the seriousness of the problem. What”s more, something similar had happened seventeen years before – when the Challenger space shuttle exploded on launch taking the lives of the crew-members – and NASA did not fix neither the O-rings problem or the foam strike on the left bipod ramp following that incident. Management’s argument was that since then they had successfully launched many shuttles and decided to play “a kind of Russian roulette” (Bohmer et al, 2010) with the O-ring erosion and foam loss problems.

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