Improving Business Processes

At this point in the evolution of knowledge management as a practice, it is clear that the creation of knowledge transfer systems is of primary importance. The use of content/relationship management applications and web portals in the development of centralized databases, communities of practice and taxonomies has proven that there is no one-size-fits-all solution. One area that is gaining in importance because of its ability to directly impact the bottom line is an integrated approach focusing on improving business processes.

“Whether designing products and services, measuring performance, improving efficiency and customer satisfaction—or even running the business—Six Sigma positions the process as the key vehicle of success.” (“The Six Sigma Way—How GE, Motorola and other top companies are honing their performance,” Pande, Nueman, Cavanagh, McGraw-Hill, 2000.)

Knowledge Transformation Cycle

Knowledge management today recognizes the need to exploit intellectual capital, but many practices fall short by only concentrating on individual knowledge components. Integrated knowledge has:

• structure (it’s process-centric);;

• links (it integrates parts into a dynamic, cohesive whole);;

• relevance (it’s meaningful to execution of the task at hand); and is;

• accurately delivered in a time-critical environment.;

An integrated solution is more effective from a process-improvement, decision-support, training and risk-management perspective than a focus on just storing and accessing information from a central repository. The transformation cycle begins with instruction, action, measurement, collaboration, transformation and ultimately returns back to instruction.

InstructionCapturing instructions or leveraging existing information is the first critical step toward transforming tacit knowledge and experience into explicit knowledge, which can be mined and shared across an organization in the form of process-based best practices.

According to a recent IDC study, the top two business uses of knowledge management are to capture and share best practices and to provide training or corporate learning. (International Data Corporation, May, 2001)

ActionAdditionally, IDC anticipates that Fortune 1000 companies will waste $7.5 billion this year due to difficulty accessing information. (ibid)

While web portal and content management tools have made information more accessible, they have also helped support the growing problem of information overload.

In order for process-centric knowledge to be useful, it must be organized within a task-specific actionable hierarchy so that people can get answers to questions without searching through a series of web pages and documents. These answers must be based upon the most up-to-date and approved knowledge. In addition to being used as decision support, these actionable procedures should be leveraged as tactical training for the purpose of job certification.

MeasurementImplementing a measurement structure, which is bound to both the process and the customer, provides the basis for responding to warning signals or problems. The marriage of process-centric knowledge and measurement will ultimately enable the organization to proactively drive the decision-making process towards implementing the highest potential improvements.

CollaborationOne of the benefits of organizing instructions in the form of a process is that end users and managers gain a clear understanding of how their roles fit into the larger picture, which leads to opportunities for collaboration to improve the process. These opportunities exist at both the task and cross-functional levels and when coupled with the appropriate measurements can lead to significant improvement.

TransformationThe ultimate objective of the transformation cycle is to not only provide best practice-based decision support and training to an organization’s staff, but to focus on the improvement and/or redesign of business processes. This is based upon a clear understanding of how the process works, a focus on client-relevant performance measures, and proactive cross-functional collaboration. This cycle enables an organization to prioritize and target solutions aimed at eliminating the root cause of performance problems.

Benefits of the Knowledge Transformation Cycle

The benefit of process-based knowledge transformation transcends organizational units and departments. It provides the basis for a common understanding of the cross-functional nature of business as well as the importance of customer focus and continuous process improvement.

“Research has shown that the costs of poor quality (rework, mistakes, abandoned projects, etc.) in service-based businesses and processes typically run as high as 50% of total budget” says “The Six Sigma Way.” In today’s competitive environment, improving business processes as part of an enterprise KM initiative not only makes sense but also is imperative.

Some of the benefits include the following:

• Reduce the learning curve within and across processes;;

• Support the performance of new and existing employees;;

• Focus on performance measures to proactively improve processes;;

• Improve customer satisfaction and accelerate the rate of improvement;;

• Share ideas up and down the organizational hierarchy and;

• Leverage best practices with an eye on continuous process improvement. ;