Beyond knowledge

Knowledge management (KM) is the market that dare not speak its name. During the mid-1990s, when organisations realised that they had far more unstructured data in their systems


Still in vogue

While the roll out of knowledge management (KM) has been scaled back at many companies, there are still plenty of cases where the implementation is enterprise-wide. Take the pharmaceutical industry. “In pharmaceuticals, there’s no such thing as old knowledge,” explains Glenn Kelman, VP of product management at Plumtree. “If something crawled across a slide and died 30 years ago, that’s still important.”

At Inxight, a specialist in unstructured data management software, managing director Jonathan Laing says that the huge amount of information that pharmaceutical companies maintain – not only their own research but research from academia and other companies – means that the ability to eliminate fruitless avenues of research is critically important.

“Pharmaceuticals want to go through internal data and external data looking for drug patents. They can go down a path for months on information and not realise they’re we’re on the wrong path. They tell us, ‘because of your tools, we reach dead ends quicker – which is a good thing’.” With the average cost of taking a drug from the initial targeting and discovery processes through to trial and eventually to market now pushing $1 billion, the prospect of being able to save 20% of that cost by using a KM system to avoid false leads is compelling.

Elsewhere, semiconductor company Intel sets a lot of store by the definition and correct application of its internal business processes. Matt Shanahan, VP of international operations at Documentum, explains that his company’s KM component can help with the recording of important procedures. “There’s more knowledge involved in the fabrication of the semiconductor than in its design – it’s the crown jewel that allows Intel to get faster clock cycles, for instance.”

Shanahan also points out that the increased need to comply with corporate governance directives have heightened awareness the role of KM systems, as have demands on local authorities to deliver information to residents as part of e-government initiatives.



than anyone could understand or locate – and even more held inside the heads of their employees – KM became a buzzword that just about every self-respecting, content-centric software vendor had to mention. But as IT budgets came under pressure, many organisations began to question if the often-intangible benefits offered by KM were enough to justify the cost and administration overheads. Many stopped their implementations and set their ‘knowledge officers’ to work elsewhere.

As such, the KM term has begun to disappear. Yet the challenge it sought to address – the capturing and cataloguing of the core information generated by the organisation’s ‘knowledge workers’ and the task of making that available to others – did not go away. It just became aligned with a wider set of requirements.

“Very few vendors today position themselves as knowledge management providers,” says Brenda Morris, UK managing director at content management and KM software vendor Open Text. “Instead, you increasingly hear people talking about things like collaboration, content management and business process management.”

Some kind of ‘knowledge management system’ may be wrapped in with those, but fewer organisations are demanding a standalone KM product, with the possible exception of so-called knowledge-rich companies, such as law firms and consultancies.

For organisations where the main business is not necessarily knowledge, the pay-offs from a KM system are less clear, say critics. Being able to mine for information within these organisations is still an appealing notion, but the difficulties and cost associated with capturing employees’ knowledge has made the technology less than compelling.


The main problem is that KM cannot achieve all its aims without changes to an organisation’s culture and business processes. Only if a company is ready to adopt an approach that encourages brain-dumping and knowledge-sharing between employees will a KM system be able to flourish, says Plumtree’s VP of product management, Glenn Kelman. Otherwise, only information gathered directly by computer systems can be shared – although that content in itself can constitute a knowledge database. “You get goofballs talking about how the tacit knowledge in people’s brains forms part of a knowledge management strategy,” he says. “But obviously you can’t write software to capture that stuff – short of drilling a hole in their heads and hooking it up to electrodes.”

The upshot is that vendors are focusing more on an amalgam of content and knowledge products when selling to enterprise customers. While many existing users that have seen benefit from KM are moving to bigger and wider implementations, the primary focus of new customers is on related technologies – such as portals, search engines and categorisation systems.

Demand in some of those segments is significant, particularly at the departmental level. Mark Kenyon, European regional director of IBM’s Lotus division, says that while sales of KM systems are growing at a steady single-digit rate, sales of portal software shot up almost three-fold in the first half of 2003.

“Customers are much more savvy these days,” says Ian Black, a director at information management software specialist Autonomy. “They’re more likely to say, ‘Here’s the [knowledge] problem I’ve got, if you can help me, prove that it delivers benefit and I’ll buy’.”

The requirement for a broader software base has resulted in a flurry of acquisitions by market leading suppliers.


Corporate attitudes

Consultancy KPMG surveyed a number of board-level managers recently about their attitudes towards knowledge management (KM). From this survey, emerged several business-oriented insights:

1) Management involvement is high and has increased over the past three years (51% of organisations indicate the role of the board has increased).

2) Companies are missing out on key business opportunities by failing to exploit knowledge effectively (6% of revenue is being lost through failure to exploit knowledge effectively).

3) The cost of KM is low and has proved to be an investment with a positive return.

4) KM is applied in all business areas, with a core in operations.

5) KM initiatives are shifting focus from internal to external and will increasingly be embedded in the daily workflow.

6) Companies underestimate the cultural change needed to implement KM through busy employees.

7) Implementation is the key challenge ahead for further successful deployment of knowledge management.



Over 2003, content management software vendor Documentum bought web collaboration specialist eRooms (and then more recently was itself acquired by storage systems giant EMC); Vignette, also from content management, acquired collaborative content software vendor Intraspect; and Open Text took over web content management and portal company Gauss Interprise, portal company Corechange, and document management and sharing software company Ixos.

Many companies are also trying to refine their product’s search and categorisation technologies to match the kind of capabilities displayed by Internet search engine such as Google. But they have some barriers to scale. “Google has the advantage of being able to pick from three billion documents,” says Alkis Papadolpoullos, director of linguistics at Convera, a search and KM company. “It’s likely to produce something relevant for you, provided you haven’t searched for something too generic. But you still can’t tell if what Google has produced is the best result for you. On a corporate network, you have far fewer documents to pick from and it’s more obvious to you if the result isn’t what you want. You need to be able to give the system a sense of what documents are about through taxonomies to produce good results on an internal network.”

Taxonomies, both enterprise-specific and personalised, will be one of the key ideas for KM systems in the next few years, says Edward Truch, director of The Knowledge Management Institute. And depending on its application, enterprises will either want vendors to develop specific categories or they will want to do it themselves.

While the KM label may have lost its lustre, subsumed into what Gartner analysts call ‘smart enterprise suites’ or broken down into components applicable to organisations’ different needs, the underlying requirements for the technology are still growing. KM isn’t dead; it has just been subsumed into something bigger.


What the analysts think

Jim Murphy, AMR: The knowledge management market, in general, is simply too fuzzy. It’s widely known that technology can only act as a complement to a corporate culture that fosters knowledge sharing. This explains why most technology-focused KM initiatives fail or at best are works in progress. KM vendors will have to apply their expertise to specific business problems and issues.

Mike Gotta, META: Interest in KM exploded in the 90s and imploded just as quickly when hyped expectations were not met by early adopters. It surfaced again with the advert of enterprise portals and is extending itself once more as a strategy to improve organisational productivity. By 2006, two-thirds of Global 2000 organisations will have implemented a persistent KM initiative. But infrastructure will only be 20% of the problem: the remaining 80% lies in planning, organisational change management and governance

Daniel W Rasmus, Forrester: KM is a management practice, not a technology domain. Just as KM does not have a technology, no market exists that can be called KM. Although some generalisations can be made about architectures to support KM processes, the selection of technology will likely require a number of products from multiple vendors. The practice of KM, however, remains a strong concept.

Brian McDonough, IDC: The KM software market staggered in 2002. But the fundamental reasons for adoption of knowledge management software have not disappeared. Demand for technologies used to provide access to experts, applications and information will continue to be strong over the next five years.

French Caldwell, Gartner: The explosion of unstructured data types is overwhelming the management infrastructure of many businesses. “Smart enterprise suites” will provide a way to organise and make sense of all the information and knowledge scattered throughout the enterprise. By 2004, smart enterprise suites will emerge as a combination of the functionality currently offered by portals, team collaboration support, content management and knowledge management and will cause major disruption in these markets.



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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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