The value of knowledge management remains high, but the implementation success is extraordinarily variable. When knowledge management works, it enthuses the process of sharing business problem solving experience and accelerates learning.
I started working in knowledge management at the Boston Consulting Group in 1977. Bruce Henderson had recently discovered the relationship between the number of a times a task was performed to the cost of performing the task. As the cumulate volume doubled the cost of performing the task falls at a constant and predictable rate. This is called the Experience Curve. We applied the experience curve concept in BCG��s consulting practice by encouraging professionals to share their practice experience so that everyone��s work would improve and profitability would increase. In fact, we learned that by sharing experience, any efficiency learned from delivering one product or service can be applied to other analogous products or services.
Initially, given this context, we called �knowledge management��, practice experience sharing. After I left the Boston Consulting Group, I joined Bain & Company where we applied the same insight, calling the knowledge sharing function the �Experience Center��. This recognized the fact that professional service firms can capitalize on the positive effects of experience and learning to increase market share and profitability. I have seen this work successfully throughout my career.
I don��t think much has changed. Businesses still strive for efficiency and profitability. Knowledge Management can positively affect the process performance by sharing experience and getting better at performing value creating tasks. As the practice of Knowledge Management strays from capturing and sharing problem solving experience or striving to improve business process performance, its relevancy decreases. For example, document sharing in portals is not, per se, knowledge management.
Technology solutions can enable practice experience sharing, so Lotus Notes and SharePoint are good examples of tools that can equip employees to learn from other��s experiences. Today, Web 2.0 tools can enable the speed and efficacy of knowledge sharing.
So, is KM relevant, absolutely, but it is only relevant when applied toward improving the efficiency and profitability of business.