Knowledge as a Strategic Asset

The adage goes, "Knowledge is power." One can clearly see why this is true for companies. The more the company knows, the better it can compete with its competitors. For instance, if a company learns that their competitor is developing a certain type of product, they can in turn create their own product to compete with the other company's product. This is an example of how knowledge can be a strategic asset.

Companies must use knowledge as a strategic asset if they are to survive in the global economy. Knowledge can help companies get ahead of the competition, perform the job right, and help perform the job in the most efficient manner possible. What you don't know can serve as an advantage to your opponent, which can be all the way across the world. Therefore it is best to be prepared by being knowledgeable, making knowledge systems available to employees, and encourage active use of knowledge systems as a strategic advantage over the competition.

Concept - Increasing Returns

In knowledge management the concept of increasing returns basically means: The more Information Technology you have, the greater the benefits (return) will be. In diminishing return, a concept often found in economics, economies of scale will occur. These economies of scale are the exact opposite of increasing returns. When you have economies of scale, you get less as production increases. (Production will level off at a certain point.)

I think the concept of IR, when applied to Information Technology, is very interesting. In a way, it goes along with the concept of Moore's Law. The better knowledge management systems we have, including in numbers, the greater the amount of knowledge that can be shared.

Xerox & Eureka!

The Problem (and reasoning) behind 'Eureka!'

Xerox created a knowledge management system because solutions created by on-site engineers, in its customer service unit, could not effectively shared among engineers and customers. Solutions to problems were often not found in manuals, and rather were tacit knowledge. Tacit knowledge is the knowledge that's "in your head." Xerox wanted to capture the tacit knowledge of its engineers and turn those ideas into explicit knowledge (effective customer service solutions that could be accessed easily.)


How did Xerox achieve its objective?

They developed a knowledge system called 'Eureka!', which operates in conjunction with its other knowledge tool named DocuShare. The DocuShare system allows Xerox's research lab scientists to collaborate with each other.


What benefits does 'Eureka!' provide? 

The system enables engineers to log-in and document solutions to problems. This decreases the number of engineers that need to be on-site at different locations, thus decreasing redundancy in creating solutions to the same problem. Customer support is also able to provide more accurate and reliable information to Xerox's customers.


Difficulties with the new Knowledge System:

Initially, employees within the company were not ready and willing to accept the new knowledge system. they felt they didn't have enough time in their strict workday scheduling. As an incentive to get engineers to use the system, Xerox allowed their employees to attach their name to a solution, thus giving them full credit for their contributions.


What lessons did Xerox learn from developing a knowledge system?

• You have to get employees to use the knowledge management system and emphasize how much more efficient it can be in day-to-day operations.
• Knowledge Management Systems are only as effective as the managers that support them.
• Workers must be informed how to use the system the right way.
• Goals and objectives must be set for the creation and use of the knowledge system. These goals must be conveyed to the knowledge workers. The company must put these driving forces into terms the employees can understand.