International Data Corporation (IDC) estimates Fortune 500 companies will lose $12 billion in 1999 because of inefficiencies resulting from intellectual rework, substandard performance, and inability to find knowledge resources. And the problem is only worsening. By 2003, they will lose an astounding $31.5 billion.
Corporate knowledge assets are also at risk. Because of a lack of tools and processes to actively capture, manage, and connect organizational expertise, an estimated 3.2% of corporate knowledge is incorrect or becomes obsolete every year. Another 4.5% of knowledge is unavailable due to employee turnover, information mismanagement, and knowledge hoarding.
"U.S. corporations are beginning to realize that better knowledge management is a core competency for survival in the information age," said Gerry Murray, a director of research at IDC. "It`s a requirement for customer responsiveness, innovation, and more efficient knowledge workers."
In a recent IDC survey, 50% of U.S. companies with 500 or more employees indicated they plan to implement a knowledge management system. The percentage is even higher for larger companies.
According to IDC, worldwide knowledge management spending will skyrocket from $2 billion in 1999 to more than $12 billion by 2003.
"Knowledge management products and services create environments that make knowledge creation, capture, repurposing, refinement, and fusion an inherent part of the workplace," Murray said.
Knowledge management implementations span investments in consulting services and information technology. Services account for the majority of the spending.
IDC recently published Knowledge Management Factbook (IDC #B20065). This report examines the knowledge management landscape in the United States. It includes forecasts through 2003 for knowledge management spending segmented by services, software, infrastructure, and internal resources. The report looks at plans to implement knowledge management systems by company size and industry, investigates plans for using an external service provider to implement the solution, and examines plans to implement solutions by type of information technology.
For a limited time, IDC`s Knowledge Management Factbook is available free of charge by visiting http://www.idc.com/Data/Software/content/offer/Knowledge/default.htm and downloading the file.
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