There is the example of the motor manufacturer that failed to match the manufacturing of a certain component to its production schedule, ending up with a huge surplus and several hundred wasted man hours. Or the executive who, having witnessed the hype at the premiere of the movie Titanic, sent a fax ordering the production of several million units of the video. The fax did not reach its destination, the videos were not produced and the company lost hundreds of millions of dollars in business when it could not meet demand. The executive lost his job.
Effective knowledge management can prevent these expensive and potentially terminal problems, and many more. In a world where information is flooding in at a faster pace every day and doubling every year, the effective storage of information for easy access is crucial. And, as the experts will tell you, gains achieved in the short term by cutting corners will come back to haunt you. On the other hand, creating an efficient, enterprise-wide online working environment that is tailor-made to your business can boost production and profit and enhance customer and staff satisfaction.
Data duplication
Many businesses operate in a situation where they have islands of information. These islands are disconnected and there is no global view. Staff cannot readily access the information they need.
Studies show that knowledge workers spend about 35% of their time looking for information; 40% of the time they cannot find the information they are looking for, while up to 50% of corporate data is not indexed for retrieval.
The International Data Corporation estimates that, factoring in the cost of the call and the time spent, each customer query that is not solved on the first call costs the company $30. Just a couple of these every day will see your costs soar. But what about the duplication of data? Every bank client has had the experience of being asked a series of details by different divisions of the bank, or been sent duplicate mail.
The number of systems has grown, leading to a situation where you, as a customer, exist in several different systems within the organisation.
The cost to company of this is far-reaching. Not only is it expensive in monetary terms, but it creates a bad image and is damaging to your corporate reputation. (The expression, "The left arm doesn`t know what the right one is doing", is appropriate here.)
These experiences are irritating in the extreme to clients, who are forced to waste time repeating information on the phone, or receive unnecessary paper in the post.
Getting an edge
In an economic slowdown, every company has to retain customers at all costs. Allowing them to form the impression that your organisation and staff are inefficient is not the way to go, and will provide the opportunity your opposition is waiting for: for them to walk out the door.
The right customer relationship management programme could be the edge you have - or your opposition has.
Another crucial issue for companies is staff retention, as the cost of advertising for good employees, recruiting them and training them is prohibitive. Apart from being able to access the information they need to service clients, staff need to be able to find details about the company when they need it.
Companies that like to stay at the forefront use employee self-service. This makes it easy for staff to apply for leave, for example, electronically, and to act on information they have received. It is essential then that the information the company puts out is integrated, so that the employer does not appear to have conflicting policies and procedures.
Knowledge management is inextricably linked to financial and risk management, and corporate governance. In an environment where the business community has lost faith in what is printed in annual reports, companies need to be seen to be complying with the requirements of the King I and II commissions.
If asked to provide a profile on investors or supply information to the Receiver of Revenue, a company must be able to do this quickly and accurately.
In a world where information is flooding in at a faster pace every day and doubling every year, the effective storage of information for easy access is crucial.
Garth Wittles, district manager, Verity
After events like Enron, WorldCom and Parmalat, and other accounting scares, new regulations demand more diligence in terms of the storage and ready retrieval of data. In addition, being able to provide correspondence going back some years may be crucial in fighting a court case. This is where e-mail mining is invaluable. An inherent contradiction in knowledge management is that while the information needs to be freely available and accessible, it must only be available to those who are entitled to it. Firewalls, encryptions and passwords must be used to comply with the privacy laws that are there to protect information.
Businesses are also offered protection by the recent international money-laundering and anti-terrorism legislation that has come into force, as all are accountable to it.
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