Aligning KM investments with critical business initiatives

Summary

Demand for KM technologies and applications is growing remarkably, propelled by a wide variety of needs and initiatives for which established enterprise applications, such as ERP and CRM, are ill suited.

• Onaverage, midsize to U.S. companies will spend $5.3million in total and$1,224 per employee on KM software and services in2008.
• Collaboration, digital asset management (DAM) and customer-and supplier-facing portals are the biggest areas of planned investment.
• Customer-facing KM efforts, branding and records management now reach strategic significance. 
• Enterprises place highest priority on process efficiency, customer loyalty, and agility and growth. 
• KM technology must go further to satisfy strategic needs. 
• KM offers a ripe, open market for vendors and service providers. 
• Preferred KM purchasing models show a shift from traditional licensing to software as a service (SaaS) and open source.
  

Impact of a tighter economic environment

The economic environment has changed considerably since our report was published, so we’ll take a quick look at how this will likely impact spending on KM.

• First, since KM as a broad category is so variously understood and all too often provides only soft benefit, many broad-based KM efforts will suffer. Companies will justify investments based on ability to address urgent and critical business initiatives.
• Many of the investments then will come under the aegis of more specific business initiatives,especially those where tangible, visible value can be achieved, and those with distinct ownership. Our survey indicates that customer efforts, including customer support and service and sales, offer the greatest potential return. 
• Companies apply current investments to emerging problems. That is, they’ll align and configure their existing investments in content management, search,portals and collaboration toward accomplishing their CBIs. 
• Companies will look seriously at low-cost alternatives, including open source products and Web services. 
• Perhaps more interestingly, it’s at the department and user level that we’re likely to see the greatest market growth. Those groups and individuals with enormous pent-up need will start using the low-cost,or ad-funded alternatives available to them on the Web, with or without the blessing or oversight of corporate IT.
  

And that, in turn,creates a market far beyond 2008 or any recession period. How will companies at once take advantage of those virally growing, pervasive social networks and collaborative environments, while at the same time protecting intellectual property, ensuring compliance and addressing risk?

For additional details, the full version of "The KnowledgeManagementSpending Report, 2007-2008" includes more than 80data-centric chartsand findings. For more information on this andother AMR Researchproducts and services, please visit amrresearch.com.