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

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

Ciara Heavin (University College Cork, Ireland) and Frederic Adam (University College Cork, Ireland)
Copyright: © 2015 |Pages: 19
DOI: 10.4018/978-1-4666-6547-7.ch023
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Abstract

SMEs operating in high-tech sectors are typically reliant on specialist knowledge to help them build the right product with the objective of meeting customer needs. The nature of niche software markets means that products must be closely informed by customer requirements for the software product to be a success. The importance of understanding how smaller organisations manage knowledge has become vital to their success; however, there remains a dearth of empirical research in SMEs in the area of IS research. Using a qualitative analysis approach in five Irish software SMEs, this chapter identifies how this type of organisation leverages their customers as external knowledge resources, with particular emphasis on knowledge acquisition, a Knowledge Activity (KA) in which customers play a significant part. Through the establishment of KAs a firm can develop an approach to Customer Knowledge Management (CKM) to build value-creating relationships with a reliable customer base.
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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.

Key Terms in this Chapter

Customer Knowledge Management (CKM): Acquiring or eliciting knowledge from the customer that may leveraged by the organisation e.g. inform new product development, inform product improvement.

Small to Medium Enterprise (SME): An organisation with between 50 and 250 employees.

Knowledge: Knowledge occurs when information represents valuable knowledge to a group focused on achieving a particular task.

Knowledge Maintenance: Update knowledge store on continual basis.

Knowledge Creation: Create new knowledge important to the organization.

Knowledge Transfer: Send or exchange knowledge to/with appropriate receiver.

Knowledge Activity: A transaction or manipulation of knowledge, constituent parts of an organisation’s approach to Knowledge Management.

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