Evaluating the Impact of Information Technology on Knowledge Management Performance with Balance Scorecard Approach

Evaluating the Impact of Information Technology on Knowledge Management Performance with Balance Scorecard Approach

Seyed Hossein Siadat (Group of IT-Management, Department of Management and Accounting, Shahid Beheshti University, Tehran, Iran), Ali Abdollahi (Group of Entrepreneurship Management, Department of Management and Accounting, Shahid Beheshti University, Tehran, Iran) and Laleh Garshasbi (Group of IT-Management, Department of Management and Accounting, Shahid Beheshti University, Tehran, Iran)
Copyright: © 2017 |Pages: 16
DOI: 10.4018/IJKBO.2017040103
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Abstract

Knowledge is one of the key factors of success and development in today's Firms. Therefore, managers are strongly fascinated by organizational knowledge management issues. In this way, information technology (IT) is known as an enabler of knowledge management (KM). In this paper, the impact of IT on knowledge management is evaluated with the balance scorecard approach considering financial, customers, internal processes and learning criteria. A conceptual model is presented for this purpose using IT application and infrastructure factors. The significant positive effect of the infrastructure factor on KM was 0.7 and that of the application was 0.79. The final result indicated a significant direct relationship between IT and KM that was 0.78, confirming the effect of IT on KM.
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Introduction

In the modern world, knowledge plays an important role in the organizations (Brito et al, 2010). Success in the increasingly competitive markets today depends on the knowledge that companies apply to their key business processes. In today’s information age, knowledge has become an important source by creating competitive advantage for organizations, and giving rise to KM initiatives. Nowadays, the organizations collect and store a lot of data, but it deems a great challenge to discover the valuable information hidden in the data. Organizations that display high levels of creativity and performance manage their knowledge effectively (Curado and Ramos, 2010; Arun, 2015). Some organizations use IT to help them create, share, integrate, and distribute knowledge.KM is the systematic use of knowledge in organization and its application in activities to achieve the goals and mission of the organization. The aim of KM is to avoid repeating mistakes and make all decisions based on organizational knowledge (Ahmadi, 2015).

IT as an interdisciplinary expertise impacts all aspects of our lives, and it is considered one of the key aspects of the world development. On the other hand, using IT to achieve timely and effective information, particularly access to employee information is of great importance, and is known as knowledge management (Alazmi and Zairi, 2003). IT is presented as the main issue in the knowledge management and organizational management literature (Lang, 2001). Although, knowledge is not solely the product of information technology, IT has inseparably contributed to knowledge creation and KM process. Due to the leading role of KM in gathering, conversion and distribution of data, it is considered one of the main responsibilities of IT (Mahini, 2014).

The balanced scorecard is a performance assessment framework which monitors the company performance by a set of financial and non-financial measures (Martinsons et al, 1999). This approach consists of a set of measures, and balances “long-term and short-term goals, financial and non-financial measures, leader and follower indicators, and internal and external performance perspectives”. Four perspectives of the balanced scorecard are the financial perspective, internal business process, learning and growth (Kaplan and Norton, 1996). The balanced scorecard is used for evaluating and guiding the activities in different performance areas, including evaluation of the impact of IT on KM.

Today, all communication tools enjoy a communication base as a parent backbone. Communication tools like fixed-line telephone, mobile, internet, etc. need a common ground network known as communication infrastructure. Telecommunication Infrastructure Company (TIC) is the trustee of this wide area network. In fact, TIC was appointed as trustee of telecommunication parent backbone in Iran by telecommunication platform management.

With regard to the importance of the effective execution of the knowledge management and the necessity of paying attention to the tools and required enablers in this area, the impact of the IT on the KM using the balanced scorecard in the Telecommunication Infrastructure Company is studied in this research. The application and infrastructure of information technology affect KM in organizations. Improvement of infrastructures and applications in TIC improves the infrastructure of knowledge-creating and knowledge-sharing processes and enhances the level of KM. Knowledge sharing among IT and organization managers, and the successful past IT projects lead to a better communication between the organization and IT managers. Determining the role of IT in improving relevant perspectives helps organizations implement their strategy, resolve problems fast, follow the best procedures, improves their knowledge of products and services, helps them use ideas, enhances innovation opportunities, and help organizations have competitive advantage. (Kafchehi et al., 2016) showed that there is a significant relationship between the firm's orientation toward innovation and competitive strategy. In the following section, we will review the research background about evaluating the impact of IT on KM performance with the balanced scorecard approach.

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