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What Is a Knowledge Management System in Business?

Knowledge is the main resource of the company, which is needed to achieve its goals most efficiently. It is a process that follows a systematic, logical, and organized order of production, transfer, and application of knowledge. Here is more about it. 

Knowledge management system as the main tool for achieving goals

In changing external conditions, innovations in every organization must be implemented promptly and effectively. For this purpose, enterprises are increasingly focused on the continuous development of not only their business but also create divisions to ensure, preserve, and concentrate all knowledge about the production of goods and services, management technologies, and the enterprise in general. Competitive enterprises must be sure that their activities ensure the creation of additional value. Since a significant part of the value of the enterprise consists of “intangible assets,” a certain amount of knowledge in one form or another is usually absent, duplicated, or not used at all. Therefore, the formation of a knowledge management system as continuous management of the enterprise can become a useful tool for the transformation of entrepreneurship and even the key to acquiring the organization’s competitive advantages.

The concept of “knowledge Management” was born in the mid-1990s in large corporations, where information processing problems became particularly acute and critical. The knowledge management system is based on three pillars:

  • personnel and organizational structure – to stimulate and ensure the transfer and use of knowledge;
  • processes and methods that make it possible to find, create, preserve and transfer knowledge;
  • technologies that help store and make available knowledge, as well as ensure the joint work of the company’s employees.

The place of knowledge management in the corporate structure

In recent years, this concept has been identified with document management, then with information systems for business, then with means of collective work, then with corporate portals and many other fashionable novelties. But a knowledge management system is not just a stand-alone product. Rather, we are talking about a comprehensive strategy of the enterprise, the purpose of which is to identify and use all the information, experience, and qualifications of employees available to the company to improve the quality of customer service and reduce the reaction time to changing market conditions. The knowledge management system must be integrated into the overall business management system to ensure the following tasks:

  • transfer of knowledge between the company’s employees, ensuring sustainable competencies, reducing the risk of losing critical knowledge in the event of employee rotation and retirement, and staff turnover;
  • increasing economic indicators due to effective knowledge management;
  • production, provision of services for the use of accumulated experience;
  • formation of specialized, reliable databases and ensuring access to them by employees;
  • improvement of management decisions, implementation of innovative approaches in the company’s management system;
  • reducing the number of errors, managing risks, and taking advantage of opportunities;
  • development of corporate culture.

Knowledge creation is a continuous dynamic interaction between formalized (explicit) and informalized (hidden) knowledge through the organizational levels of the company. It should be noted that knowledge management is carried out at all stages of the product life cycle. Although the ISO series standards do not require a Knowledge Management Policy to be defined, it is good practice for senior managers to take responsibility and define it. It is recommended to confirm the policy in the field of knowledge management in a document, to inform all employees of the company and interested parties if there is a decision of the top managers regarding the latter.