The Need to Know

No matter what business you’re in, it’s probably changing as a result of knowledge management. A layperson’s primer on the next big thing in ICT

Oct 1, 2007  

by Caitlin Crawshaw

As next big things go, “knowledge management” sounds less than inspiring. Just as the theory of knowledge has been long debated by philosophers, this technology-driven trend is a slippery concept. And yet examples of it are all around, especially in the business world.

In the last few months, you may have done your taxes using desktop software or stepped into a dealership to buy or service a car. Both employed a knowledge-management approach to meet your needs and to manage their business processes, efficiently compiling and making sense of large volumes of information, including information on you as a taxpayer and customer.

Each, of course, would have done this a little differently. The tax software, for instance, required you to enter the data (your financial information) and processed it according to complex tax rules, before using secured web technology to send it electronically to the Canada Revenue Agency.

At the dealership, enterprise management software may have ensured staff had your customer information on hand to understand your history – both to your advantage and theirs. By knowing your former vehicles and service history, they could grasp your needs better. They saved time and thus, were more likely to make a sale.

At work, you likely use knowledge management tools often. If you’ve ever used a billing system to manage payroll, employed videoconferencing or used a BlackBerry, you’ve been part of the craze.
Confused yet?

Tom Ogaranko started his information and communications technology firm Redengine Inc. in 1997, when knowledge management was just coming into vogue. “It was defined in several different ways… from different kinds of technology products to a complete approach to how an organization captures and codifies its knowledge,” the company CEO says.

These days, knowledge management is mostly defined as the latter. That is, instead of using a handful of off-the-shelf software applications to, say, record financial information or write correspondence, organizations increasingly turn to comprehensive systems tailored to their industry or business activity. For the employees, they are simple to use, requiring little training. (In fact, using the example of tax software, a completely untrained customer renders information in a form the enterprise, in this case Canada Revenue, can immediately use.) For the organization itself, these systems offer a wealth of new information it can use to improve productivity and customer satisfaction. Knowledge management employs a host of technologies to help companies relate better to a consumer and best manage their processes and information, including the so-called “waste information” that was once thought to be useless.

Ogaranko cautions that the term has been over-defined of late. “For many people, it’s lost a lot of meaning,” he says. “But it’s a way of looking at a set of problems in how you use technology to do something effectively – it’s still a very useful concept, but it’s got to embrace processes, culture, attitudes, as well as technology.” Because knowledge management is both a service and a product, employs many technologies – including a variety of multimedia, web and wireless technologies – and serves all industries, the term can be baffling. (One expert scoffed when he heard the topic of the story, wishing this writer “Good luck.”)

Randy Thompson, a partner in Argon Capital LLC, a cross-border venture capital firm specializing in information technology investing, points out that knowledge management is hard to corral into a particular sector. “When you talk about knowledge management or IT, you actually cut across almost every sector you can imagine. So IT becomes an enabler. Knowledge management tools become an enabler for all the industries,” he says. Many of the newest (and thus venture capitalist-friendly) technologies are being used within knowledge management strategies. Nanotechnology, for instance, is poised to revolutionize power management in electronics, improving battery life and memory capability in computers.

Despite its state-of-the-art manifestations, Thompson points out that knowledge management isn’t brand new. “I would consider it a new moniker for an old term,” he says. “A lot of enterprise software we use today, even within your Outlook or your Excel spreadsheets, managing inventory or e-mail and how you’re going to file e-mail, those software systems have been around for 20, 25 years.”
So if knowledge management isn’t brand new, why the buzz?

“What’s new is how we do it,” Thompson explains. What once required supercomputers with complex cooling systems can now be done with desktop software. We can store more data in smaller spaces with greater computing speed than ever before. As a result, the sheer volume of information being collected and analyzed is growing. Consumers are also getting more technologically savvy.

According David Jacobson, director of emerging technologies for business services firm PricewaterhouseCoopers, it’s not just the sheer volume of information that companies are collecting about themselves and their customers that’s changing; it’s also the type of information. “Historically knowledge management really was the management of text-based knowledge within an organization – the sort of thing that one gleaned from one’s customers through the customer-management systems and also the enterprise knowledge that one collected internally from employees and the general culture of the organization,” explains the former Harvard professor.

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