04 Feb

The Value of Effective Knowledge Management

Leading companies pursue KM to achieve and sustain world-class performance.

For some, the value of KM is unquestionable and long-term. Others make expectations explicit and quantify achievements.

Depending on which value discipline the enterprise pursues, some examples of expected and realized benefits from KM are:

When pursuing Customer Intimacy:

  • Increased orders and proposal acceptance from having more knowledgeable sales and marketing people — by transferring mental models and perspectives that exceptional performers use to all practitioners.
  • Higher customer satisfaction leading to greater customer loyalty, less sales and marketing cost per dollar sold, and greater market penetration by providing better service to customers with individual requirements — made possible by pooling knowledge among team members and having instant access to expert networks.
  • Greater market penetration and profit margins with individualized product specifications and customer service — achieved by obtaining and acting on in-depth knowledge of product use in customer environments and effects on customer profitability and success.

When pursuing Product Leadership:

  • Higher quality products leading to higher value to customers and better market acceptance, with greater profitability and enterprise viability — resulting from better transfer of knowledge from outside sources and new educational programs that provide wider horizons and general understanding in designers and marketing people.
  • More innovative and advanced products that open up new market niches with increased sales to increase net income per share — by fostering personal innovation, increased sharing of knowledge between marketing, manufacturing, and product development, and a new research agenda.

When pursuing Operational Excellence:

  • Less costly products and services result in higher net profit – resulting from increased benchmarking and greater sharing of best practices between different groups and inside and outside the organization.
  • More timely product deliveries, reduced inventories, less rework, and greater customer satisfaction — by increasing craftspeople’s and foremen’s knowledge of their own and adjacent processes.
  • Greater product consistency leading to reduced operating costs — from increased knowledge by all employees of the effects of product variations on customer requirements, sales, and enterprise profitability.