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Heading for Knowledge-Guided Networks
More and more companies are realizing that the way they manage knowledge is a major factor affecting their competitiveness. Eventually, say the experts, knowledge management is expected to transform companies into knowledge-guided networks.
When knowledge management became a hot topic a few years ago, many managers regarded it as a bitter pill that had to be swallowed—just once—in order to conjure up a happy ending." Peter Heinold of Siemens Corporate Information and Operations (CIO) is familiar with the hype surrounding Knowledge Management (KM), as well as the disappointment that may follow it. "In many cases, KM was simply decreed, without being rooted in a company’s processes or its corporate culture," he says. "Or it was practiced as a kind of fashionable accessory." When such measures failed to lead to commercial success, spark innovation or boost ongoing business, disappointment set in. Some observers concluded that the bursting of the New Economy bubble also meant goodbye to Knowledge Management.
But the prophets of doom were wrong. Companies whose first experiments with KM had run aground drew lessons from those experiences and launched new and successful KM projects. And at companies like Siemens, where KM had been comprehensively introduced from the very beginning, there’s no doubt at all that it’s the ideal tool for mining business-related knowledge. The advantages offered by knowledge management are obvious. Companies avoid performing the same tasks twice by making more effective use of the knowledge available to them in databases, archives and documents. That helps them cut costs and save time. One example of this tool is the cooperation of virtual teams such as those operating at Siemens Business Services (SBS). There, various Web-based functions are available to project managers from various locations who work together in the team. All documents that are relevant to a project—from initial bid and correspondence to the status of the implementation—are centrally stored and available at any time, no matter where the user might be. Discussions and coordination processes can thus be handled in an interactive manner.
If it is optimally implemented, KM can measurably increase a company’s operational success. To reach this goal, employees must be able to use the knowledge gained from outstanding projects and local innovations in a global manner. For example, a solution devised by the AGiLiENCE Group—a start-up company—helped an international pharmaceutical company to compile the experiences and results of its laboratories all over the world so that it could bring new medications to market more quickly. AGiLiENCE, which was co-founded by former Siemens employee Dr. Christian Kurtzke and is supported by Siemens Venture Capital, developed the Mona expert system, which enables developers to post urgent inquiries as Word documents via a simple user interface. Unlike e-mails, which must be directed to a specific recipient, Mona guides the inquiry to the experts best suited to answer it. The system also matches questions with existing answers and makes them immediately available to the user. The system is so easy to use that even newcomers quickly have expert information at their fingertips.
Active Employees. Knowledge Management as a whole is a complex process, which requires more than an optimal information and communication infrastructure. "Ultimately, these tools are only secondary in importance, because they merely support the process," says Dr. Gerhard Zorn, head of Knowledge Management & Business Transformation at Siemens Corporate Technology (CT). The crucial link in the process is the people involved. All of them, from top management to individual employees, have to be willing to actively implement KM.
One key to successful KM is a close connection with ongoing business activities. Joachim Siemens ICN manager Döring puts this even more straightforwardly "The main thing is the pressure to act quickly. If it’s there, nobody even has to ask if it’s necessary to share knowledge." Döring knows what he’s talking about, because he’s one of the inventors of ShareNet, an outstanding Intranet-based KM system. ShareNet was developed in the late 1990s for Siemens nformation and Communication Networks (ICN) in response to wide-ranging market transformations. The worldwide deregulation of the telecommunications market had created a new business environment. "Suddenly, our salespeople were facing the challenge of having to offer solutions rather than precisely defined products. That significantly increased our influence on the value-added chain as far as customers were concerned," Döring recalls.
ICN needed a well-oiled instrument with which it could respond to these new challenges. The result was ShareNet, which is easy to learn and user-friendly. In addition to providing a database containing all project results, it focuses on enabling employees at ICN to communicate and exchange their know-how, project experiences and comments. ShareNet focuses mainly on the interactive components of knowledge exchange. Because knowledge is always related to solutions, there’s plenty of room for chat rooms, community news, and discussion groups. What’s more, ShareNet is independent of time zones and organizational structures. Someone is always working in the system, somewhere in the world—so urgent questions are generally answered within a few hours.
What Chile Can Do for China. One shining example of ShareNet’s top performance is a business coup Siemens accomplished in China. "Our sales staff received a commission for a pilot project from a telecommunications company because they were able to draw from the experiences of their colleagues on an international bases when they were developing the bid," reports Janina Kugel, head of Knowledge Management at ICN. Sales staff using ShareNet found out that similar systems had already been successfully implemented in Thailand and Chile, which meant that their colleagues in those countries could give them valuable information about the hardware and software features that would be needed.
The key to ShareNet’s success is the willingness of its users to share their knowledge. Currently, the system is being used in several Siemens Groups, including SBS, Medical Solutions and Siemens Financial Services (SFS). "Just 18 months after its introduction, 6,000 ShareNet users were registered in 48 countries, and today there are around 16,500 users in more than 70 countries," says Kugel proudly. At the beginning, ICN offered users incentives such as cell phones. But now, ICN is boosting users’ motivation another way—through its "Expert and Master Program." Each user’s contributions are evaluated by other users in terms of their utility. The individuals who receive the best evaluations are publicly praised in the ShareNet community. "That way, we make ensure that users’ motivation comes from within. That’s often worth more than financial incentives," says Kugel.
Motivation is Everything. The core of a functioning KM system is the way it approaches the question of what conditions will encourage people to share their knowledge with colleagues—in many cases, with colleagues they don’t know, who don’t work in their department or Group, or even in their regional company. This situation is not a problem if the initiative comes from workers themselves and if they organize themselves into Communities of Practice (CoP) (see Communities). "These employees are especially interested in learning processes and are committed to the continuing success of their Groups," explains Karsten Ehms from Knowledge Management & Business Transformation at CT. The willingness to work across organizational boundaries in a certain area of knowledge creates a special identity, according to Dr. Josef Hofer-Alfeis, a KM pioneer who is a Senior Manager for Siemens’ CIO. What’s more, he adds, CoPs are excellent repositories of knowledge that in many cases even survive a restructuring of the organization. "The important thing is that these grassroots initiatives should be sustained by management and embedded in a comprehensive KM system. If that doesn’t happen, they’ll become isolated solutions with limited effect," says Hofer-Alfeis.
"If Siemens only knew what Siemens knows"—this statement has long become redundant. The year 2003 marked the first time that Siemens was honored as the "Most Admired Knowledge Enterprise (MAKE)." Every year, Teleos, an independent KM research company, grants this title to a European company that has initiated outstanding KM programs Previous winners include BP and Nokia. At Siemens, the major KM activities are carried out in the ICN, ICM, SBS, MED, SFS Groups and Siemens VDO. There are more than 1,500 Communities of Practice (CoP) with 90,000 members, and about 250 of these operate across Group and regional boundaries. Some 20 percent of all Siemens employees worldwide are in a CoP. These marketplaces offer more than 250,000 "knowledge objects"—structured documents or discussion forums on methods, solutions and experiences. In some marketplaces, around one-third of the objects are downloaded per month. That’s a key sign that the community is active. Two-thirds of CoP members who post urgent questions receive at least one answer within two days. Today about 50 full-time or part-time employees are responsible for KM at Siemens. That’s in addition to some 1,000 employees who support KM processes and 30 KM consultants.
Support from the Top. If KM is introduced as a comprehensive process, it operates across organizations and transforms existing structures—provided that management agrees with and supports these steps. This "acceptance of responsibility by management" is crucial to KM’s success, according to Prof. Franz Lehner, who holds the Chair of Business IT and Business Engineering at the University of Regensburg. Employees need to be sure that their work will be appreciated. Support from the top also ensures that the process will receive the resources it needs.
That’s particularly important if employees believe that KM is a threat to their jobs. "Actually, KM has the very opposite effect," says Lehner. With the help of co-workers’ know-how, new business areas that safeguard jobs can be developed. That’s exactly what has to be made clear to workers. "Especially in economically difficult times, when fewer financial investments are being made, the intelligence that is available within the company itself is a priceless asset." That’s especially true of a company like Siemens, where between 60 and 80 % of the added value is knowledge-related. Today, KM is absolutely indispensable for the company. "Siemens has gained millions of euros through knowledge management—through both new customer contracts and savings in time and money," says Hofer-Alfeis. One example is ProjectManagement@Siemens, where knowledge sharing is one of the methods used to develop common standards and new tools for the company’s approximately 10,000 project managers all over the world.
Why Customers Like KM. At Siemens, KM is used not only internally, but also as part of Siemens Business Services’ consulting activities—and with increasing success, according to Ulrike van Briel, who is responsible for business development at SBS. "The time is right for KM, and customers are ready for it too," she says. More and more, customers are realizing that individual applications generate specific changes, but a comprehensive KM process brings them much more added value. She also sees considerable potential for KM in public administration: "In view of growing cost pressure, KM offers solutions that can speed up bureaucratic processes," she says.
For example, electronic files can cut downtimes and processing times associated with legal procedures. That’s important when deadlines have to be met in order to avoid costs for individual citizens or state institutions.
Knowledge Management is an ongoing and comprehensive process—rather than a bitter pill that needs to be swallowed. Once introduced, KM functions as an interactive process involving people, technology, organizational structures, and the occasional support of an ever-present knowledge manager. He or she helps to ensure that the knowledge contained within a company is systematically increased and enhanced. However, according to Karsten Ehms at CT, the long-term success of KM will lie in the fact that "it will one day make itself superfluous. In ten to 20 years you won’t see a door marked Knowledge Manager anywhere," he predicts.
According to Ehms, this will also be reflected in the corporate structures of the future. "Companies will operate like knowledge-guided networks, and there will no longer be any hierarchies in the traditional sense of the word."