Knowledge Management: Realizing Value through Governance

Introduction

In information-based economies, knowledge is the key organizational resource and competitive differentiator (Grant, 1996; Zack, 2003). Organizations therefore need to leverage knowledge to compete for success and viability. The management of organizational knowledge is a necessity and is initiated as an intelligent imperative by forward-looking strategic leadership.

In this paper knowledge management (KM) is understood as a broad concept that addresses the full range of processes by which the organization deploys knowledge. These processes involve the acquisition, distribution and use of knowledge in the organization. These processes include interpersonal, social-technical and technical modes. Knowledge exists in both explicit and tacit forms and therefore differing strategies are required to leverage and deploy it effectively (Amidon & Macnamara, 2003; Becerra-Fernandez, Gonzalez, & Sabherwal, 2004; Davenport, 2005; Davenport, De Long, & Beers, 1998; Dixon, 2000; Holsapple & Joshi, 2000) The problem is that many KM strategy implementations are troubled by obstacles. Among these obstacles is lack of understanding of the means for evaluating return on investment on KM (Cummings & Bing-Sheng, 2003; DeLong & Fahey, 2000; DeTienne, Dyer, Hoopes, & Harris, 2004; Zyngier, 2001).

This paper examines the results of a recent survey into KM practices and processes. The research question is “What are causal factors in the realization of value from KM strategies?” To this end we investigate what tools and techniques organizations are using to implement their KM strategy. The capacity to measure those outcomes is achieved through the implementation of KM governance mechanisms. These findings strengthen the proposition that KM governance supports the capacity of KM governance to reveal value of KM strategy development and implementation. KM governance is an effective means that ensures the delivery of the strategically managed benefits of KM in an authorized and regulated manner (Zyngier, 2005, 2007; Zyngier, Burstein, & McKay, 2005, 2006). KM governance supports the development of policy to align KM with the strategic aims of the organization. It underpins these policies through the authorization of KM activity, risk management, measurement or evaluation and review, and through the exercise of fiduciary care in relation to financial support for those activities.

This paper is structured as follows. The next section examines the concept of value as return on investment (ROI) and of measurement in KM. It then explores existing research into governance of KM as a structural mechanism to ensure the realization of anticipated benefits from leveraging organizational knowledge resources. We take examine the relationship between KM governance and the alignment of KM with business strategy. Finding a coherent basis for measurement and evaluation of KM strategies is disclosed as being obscured by the varied aims and objectives given by respondents – many of these being only indirectly related to a hard fiscal return on organizational investment. We disclose evidence that KM governance fills a gap in capacity to deliver a basis for measuring or evaluating the return on investment. The research methodology is described and the findings on value realization through a global survey of 218 KM practitioners are presented and discussed.