Customer Knowledge Management (CKM): Customers as External Knowledge Assets in Small-to-Medium-Sized Software Enterprises (SMEs)

Introduction

The focus on knowledge is not new to the business world; indeed, knowledge has been passed between master and apprentice for centuries (Hansen, 1999). The basis for the concept of KM is that if organisations know more about what they know, they may be more effective in meeting their objectives (Davenport & Prusak, 1998; O’Dell & Grayson, 1999), extant research contends that this may be extended “to know what our customers know” developing an approach to Customer Knowledge Management (CKM) (Gilbert, Leibold, & Probst, 2002, p.1). In the way of achieving this, stands the difficulty in dealing with personal or tacit knowledge that is a difficult to capture and get visibility upon in the overall context of a firm both inside and outside the organisation. In today’s challenging economic times, organisations recognise the need to leverage their existing knowledge resources to sustain market position, but often fail to develop the routines and procedures that would allow them to fully utilise what they have. Indeed from an SME perspective, their size means that they are wide open to market influence; small changes in market demand or economic climate can significantly impact the success and sometimes survival of an SME. According to Duh and Belak (2008) external sources of knowledge are very important for small business in the face of a changing knowledge environment. As a result developing links with external entities such as customers through trust networks may facilitate increased knowledge acquisition activities (Evangelista, Esposito, Lauro & Raffa, 2010; Ojala, 2009). This is important for SMEs as the impact of changing supplier, market, and customer activities requires smaller organisations to respond rapidly to the environment (Sparrow, 2001).

However, according to Ichijo, Von Krogh, and Nonaka (1998), in order to achieve the benefits associated with KM, an organisation’s approach should be formal in nature. SMEs need to take stock of their external knowledge resources i.e. customer knowledge, where it is stored and how it is used to improve competitiveness (Zapata-Cant, Criado & Criado, A., 2009). In addition, consideration must be attributed to the knowledge activities (KAs), or component parts of the KM approach. By doing this, the organisation can identify where its strengths lie, by better understanding the type and extent to which customer knowledge is leveraged in terms of making the right product or service available to the right customer at the right time. This chapter concludes by assessing an SME’s approach to KM with a view to better facilitating an organisation’s ability to leverage customers as external knowledge resources while improving the product/service provided to the customer.