Impact of AI on KM Strategy: A Two-Way Street

The impact of AI on KM is undeniable. With the advent of agentic AI and generative AI (GenAI), the thinking around KM has changed. Organizations have become aware of the huge potential of AI, but also of the critical role that accurate data plays in supporting AI to achieve success. In turn, AI has enriched the underlying knowledgebase by accessing, analyzing, and reporting on information within and outside the organization and has improved efficiency by automating many business processes. Although most enterprise-wide AI initiatives have not gone beyond the pilot stage to successful production scale, many smaller implementations of AI have provided value to organizations and their customers.

Now a mature market in its own right, the global KM market was estimated to be $773.6 billion in 2024, according to FactMR and is predicted to grow at more than 16% per year for the next decade. MarketsandMarkets estimates the AI market as $370 billion in 2025, with a predicted growth rate of more than 30% per year during the next 7 years. The established KM market and the fast-growing AI market will likely overlap as time goes on to the point where they may become difficult to separate.

In its “2025 Knowledge Management Priorities and Trends” report, APQC found that 41% of respondents said their top priority was incorporating AI and smart technology. Identifying, mapping, or prioritizing critical knowledge was rated as the top priority (30%) by the next largest group. The survey was completed by 340 KM experts and practitioners. The top business priority was operational efficiency/process improvement. In defining goals for the user experience, respondents most frequently cited embedding knowledge capabilities directly into work processes and applications (31%), followed by using automation to reduce the manual effort required to search and synthesize information (25%).

Taken together, these results indicate that companies are increasingly oriented toward using AI to support their KM initiatives, with a focus on greater efficiency. The need to organize information and improve its quality goes hand in hand with this goal. “Companies are realizing that they can’t build an AI workflow on top of poor data,” said Adam Pinkham, VP of product for Happeo. “It’s like building a skyscraper on quicksand.” Happeo provides a knowledge hub that stores, searches, and analyzes information. It also has a governance component, channels for collaboration, and integration capabilities.

The most common reason that companies first engage with Happeo has been a top KM priority for decades: locating the information that employees and customers need in order to accomplish their tasks. “As part of its KM strategy, companies want to save time and be more efficient, for example, by developing an HR hub to make relevant enterprise knowledge available, along with answers to frequently asked questions available via self-service. ” continued Pinkham. “However, they would like to provide more than a search window: They want a conversational AI agent that understands corporate content and can infer the user’s intent.”