chapter 11 knowledge management jason c. h. chen, ph.d. professor of mis school of business...
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Chapter 11 Knowledge Management
Jason C. H. Chen, Ph.D.Professor of MIS
School of Business AdministrationGonzaga UniversitySpokane, WA 99258
ã John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
What is Data Mining?• Data mining – the process of analyzing data to extract
information (unknown patterns) not offered by the raw data alone
• To perform data mining users need data-mining tools– Data-mining tool – uses a variety of techniques to find
patterns and relationships in large volumes of information and infers rules that predict future behavior and guide decision making
– A wide range of data mining techniques are being used by organization to gain a better understanding of their customers and their operations and to solve complex organizational problems.
• An example– Grocery Store in UK
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ProjectDeliveryModel
Customer Relations
Resource Management
Process Management
Project Management
Accounting and other functional areas
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___________________IT-Intensive Radical Redesign
_________________________ for
“Paradigm Shifts”
Radical Rethinking of the Businessand Organization
for a “World of Re-everything”
“Old World” of Business
E-Worldof Business
________________ Streamlining Bottlenecks
_______________ Replacing humans with
machines
From “Old World” to E-World of Business: Knowledge Management for “Paradigm Shifts”
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Database vs. Datawarehouse
DBMSDBMS Database
Datawarehouse??????
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Business Analytics
• Business Analytics (BA) is an ________ term including data __________, business __________, enterprise information management, enterprise performance management, analytic applications, and governance, risk, and compliance.
• Business Intelligence (BI) is a set of ___________ and ___________ used to describe business performance.
• Companies find success through better use of analytics.• Many companies offer similar products and user
comparable technologies.• Business processes are among the last remaining points of
differentiation.• Focus on ___-based management to drive decision making.
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What's The Difference? Business Analytics vs Business Intelligence
• Business Analytics (BA) is a close cousin of Business Intelligence (BI). Both are meant to help companies make better decisions by analyzing business data. The difference is in their methods, and in the general direction of their analysis.
• Business Intelligence, the most common form, concentrates on ______ from the present and the immediate past, and drawing conclusions from that.
• Business Analytics makes more of an effort to predict the future using more complex tools relying heavily on anything from _________ to neural nets.
http://it.toolbox.com/blogs/inside-erp/whats-the-difference-business-analytics-vs-business-intelligence-58672
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The Architecture of BI
• A BI system has four major components:– 1. a data _________, with its source data– 2. business ________, (or analytical environment)
a collection of tools for manipulating, mining, and analyzing the data in the data warehouse;
– 3. business __________ _________ (BPM) for monitoring and analyzing performance
– 4. a user _______ (e.g., dashboard)
performance management
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Fig. 1.3: A High-level Architecture of BI
1. 2. 3.
4.
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Business Analytics (cont.)• Davenport and Harris
suggest that companies who are successful competing with business analytics have these five capabilities:– Hard to ______– Uniqueness– _________– Better than competition– __________
• Characteristics of strategic resources are:– ________, – ______, – non-_______, – non-transferable, – non-substitutable,– combinable, and – ________
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Figure 11.6 Components of Business Analytics
Component
Definition Example
Data Repository
Servers and software used to store data
Software Tools Applications and processes for statistical analysis, forecasting, predictive modeling and optimization.
_________________Forecasting software package
Analytics Environment
Organizational environment that creates and sustains the use of analytics tools
________________ thatencourages the use of the analytics tools; willingness to test or experiment
Skilled Work Force
Work force that has the training, experience and capability to use the analytics tools
Harrahs and Capital One have such work forces
To successfully build B.A. capabilities in the enterprise, companies make a significant investment in their: 1)___________, 2) _______, and 3) strategic decision-making __________
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Knowledge management vs. Information technology projects
Knowledge Management Project Information Technology Project
• Emphasizes _____________ information for users
• Support organization improvement and innovation
• Adds value to content by filtering, interpretation, and synthesis
• Require on-going user contributions
• Balanced focus on both technology and culture
• Variety of inputs often precludes automated capture of knowledge
• Emphasizes __________ of information for users
• Support existing operations
• Delivers content only
• Emphasizes one-way transfer of information
• Primary focus on technology
• Assumes capture of all information inputs can be automated
Then, is there a general rule to determine a project is a KM project or a IT project?
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KM Project vs. IT Project
• According to Davenport and Prusak point out in their “_________ %rule,”– if more than one-third of the time and money
spent on a project is spent on technology, the project becomes an IT project rather than a KM project.
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Data Base
Data Warehouse/Data Mart
Online Transaction Process vs. Online Analytic Process
Business__________
OLTP
(Daily operations)Real-Time,Relational DB
OLAP
(copied to)
(Non-daily operations)(for quick and easy access)
Not Real-Time
Business__________
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A Generic Data Warehouse Framework
DataSources
ERP
Legacy
POS
OtherOLTP/wEB
External data
Select
Transform
Extract
Integrate
Load
ETL Process
EnterpriseData warehouse
Metadata
Replication
A P
I
/ M
iddl
ewar
e Data/text mining
Custom builtapplications
OLAP,Dashboard,Web
RoutineBusinessReporting
Applications(Visualization)
Data mart(Engineering)
Data mart(Marketing)
Data mart(Finance)
Data mart(...)
Access
No data marts option
Fig. 2.3 A Data Warehousing Framework and Views
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Economic reliance on knowledge workers is increasing
• Knowledge _____• Customers and businesses want a more
integrated approach.• Best to say you are in the knowledge
business
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Working Smarter, Not Harder• Overlapping ______/_________/_____________ factors
in KM:
___________
________________
______________i Knowledge
N
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Why Knowledge Management?
• Business evolve from competing on ____, to competing on _____, to competing on ____________.
• Effectively managing knowledge as a strategic asset will enable companies– to adapt to ____________,– to respond to change quickly and easily, and– to adopt a _____________ when defining products and
services.
N
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What is Knowledge Management? • Knowledge management is defined as the
processes needed to generate, capture, codify and transfer knowledge across the organization to achieve competitive advantage – Pearlson and Saunders.
• Technology plays a significant role in managing knowledge.
• __________ and ___________ are essential to knowledge management.
• In short, KM is a process (practice) of capturing a corporation’s collective experiences.
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Intellectual Capital and KM• _________ capital is defined as knowledge
that has been identified, captured, and leveraged to produce higher-value goods.
• Intellectual capital is a synonym of KM• KM is related to IS in three ways:
1. IT makes up the ____________ for KM systems
2. KM systems make up the _________ for many IS applications
3. KM is often referred to as an _______ of IS
N
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Figure 12.1 The relationships between data, information, and knowledge.
Data
More human contribution
Greater value
Information
Data endowed with relevance and purpose
Requires unit of analysis
Needs consensus on meaning
Human mediation necessary
Often garbled in transmission
Knowledge
Valuable information from the human mind;
includes reflection, synthesis, context
Hard to transfer
Often tacit
Hard to capture electronically
Hard to structure
Highly personal to the source
Data Information Knowledge
Data
Simple observation of states of the world
Easily captured
Easily structured
Easily transferred
Compact, quantifiable
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The Content of Human Mind • According to Russell Ackoff, a systems theorist and
professor of organizational change, the content of the human mind can be classified into five categories:– Data: symbols or ______– Information: data that are processed to be useful;
provides answers to "who", "what", "where", and "when" questions
– Knowledge: application of data and information; answers “_____" questions
– Intelligence/Understanding: appreciation of “____“– Wisdom: evaluated understanding.
Data Information _________ Intelligence ________
Value Chain Data of the Enterprise
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Tacit vs. Explicit Knowledge
• _______ knowledge is personal, context-specific and hard to formalize and communicate
• _______ knowledge can be easily collected, organized and transferred through digital means.
We know what we know
(________ knowledge)
We don’t know what we know
(______ knowledge)
We know what we don’t know
We don’t know what we don’t know
Types of Knowledge
What w
e K
nowW
hat we
don’t know
We Know We don’t know
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Tacit and Explicit KNOWLEDGE
Oral Communication“Tacit” Knowledge
50-95%
Information Request
“Explicit” Knowledge
Explicit Knowledge Base5-50 %
Information Feedback
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The Four Modes of Knowledge Conversion
Tacit Knowledge
Explicit Knowledge
Tacit Knowledge
Explicit KnowledgeA. ___________
(Sympathized Knowledge)
C. ___________(Operational Knowledge)
B. ___________(Conceptual Knowledge)
D. ___________(Systematic Knowledge)
Transferring tacit knowledge through shared experiences, apprenticeships, mentoring
relationships, on–the-job training, “Talking at the water cooler”
Articulating and thereby capturing tacit knowledge through use of
metaphors, analogies, and models
Converting explicit knowledge into tacit knowledge; learning by
doing; studying previously captured explicit knowledge
(manuals, documentation) to gain technical know-how
Combining existing explicit knowledge through exchange and
synthesis into new explicit knowledge
FR
OM
TO
Source: Ikujiro Nonaka and Hirotaka Takeuchi, The Knowledge-Creating Company, 1995
Which mode is the one for classroom processes? _____
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From Managing Knowledge to BI• Managing knowledge is not a new concept, but one
reinvigorated by ___. • KM is still an emerging discipline• _______ _______ (BI) is a set of technologies and
processes used to describe business performance.– BI is a component of KM.
• Business Analytics – use of quantitative and predictive models, and fact based management to drive decisions.
• An organization’s only sustainable competitive advantage lies with how its employees apply knowledge to business problems
• KM is not a magic bullet.
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Key to Success: A Learning Organization need to have four characteristics critical to successful Knowledge Management
N
S
W E
_____________________
_________ AS ASSETS STRUCTURES AND PROCESSES
In general, a successful KM effort requires leadership with _____, _________, and an organizational culture that facilitates collaboration.
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CoreCompetency
________ Knowledgederivative
InformationCommunicationIndustries
Intellectual & ________ AssetsPartnershipPatentsData bases
______ Explicit, Codified Knowledge Methods
____ CapitalWellspring of
Knowledge
SkillExperienceKnowledge
Learning
Learning
Manage Core Competency
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3
4
5
Information & Comm. Technology Infrastructure
Know-whatKnow-howKnow-why
QualityInformation
ExplicitKnowledge
Tacit KnowledgeRaw Information
OrganizationalKnowledge
_______CompetenceCrystallize Core Competence
Generalize Best Practice for Reuse
Produce Best Practice
Contextualize Organizational Knowledge
Create Organizational
Knowledge
Improve quality of information Make tacit
knowledge explicit
______ Practice
Figure: From Organizational Knowledge to Core Competency
Knowledge HuntingKnowledge Hardening
[_______ knowledge]
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THE WORLD OF RE-EVERYTHING
• Knowledge is productive ONLY when _______________.
• ____________ requires decentralized intelligence.
• We need to empower ________ workers• Top performers can be a problem; they are
not the most _______.
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Sustainable Competitive Advantages
• Any sustainable competitive advantages?• How can an organization sustain its
competitive advantage?• Firms may create/improve their competitive
advantages only if they:– have __________ to learn,– employ _________ management approach,– learning to ______ and learning to _____
(life-long learning environment)
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Conclusion__________ + ________________________ +__________________ =
Opportunity for New
Societal Infrastructure
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• A wise CEO will make better decisions and inspire greater loyalty and trust than just a knowledgeable CEO.
-- Schrage, 1996• Imagination is more important than Knowledge.
-- Albert Einstein
“Knowledge is the beginning of practice; doing is the completion of .”
(relevant to Buck Lab Case)
-- Wang Yang Ming, 1498 (one of great Chinese philosophers)
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From Data to Knowledge:How Can Organization Gain Competitive Advantage?
(Survive and Prosper in the Digital Economy)
Data process _________ _________Information
Accessible
Organizational ___________
SharableCollaborative
-As a productNOT byproduct
-As core intellectual capitalNOT merely a few smart employers
DecisionMakingAvailable
Reusable
CRMAccountingFinanceOperationsManufacturing
Externalcustomers
D. B.
D.B.:Structured: R-DBMSUnstructured: Document Mgt. Systems
context,experience
a_______ i_______ i_______ N
Useable
________
ã John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Summary
• KM is related to information systems in three ways: IT makes up its infrastructure, KM makes up the data infrastructure for many IS and apps, and KM is often referred to as an app of IS.
• Data, information, and knowledge should not be seen as interchangeable.
• The 2 kinds of knowledge are tacit and explicit.• Manage knowledge carefully, there are many valid
and of course legal reasons.• KM projects can be measured using project-based
measures.