Case study answers

A.     Case Study 1.1: Knowledge Management in Financial Services

1.    For one of the organisations mentioned in the article, summarise how Knowledge Management is used to improve organisational performance.

The case study mentioned couple of companies having made efforts towards. Skandia is one such company, in the insurance and reinsurance sector, which has successfully made use of knowledge management in sprucing up the financial services. Some of the distinctive features used to enhance the capabilities and competencies of the company include;

·        Its IC (intellectual capital) reporting model helps keep stakeholders informed of the intangible assets of the company.

·        The Navigator approach is used as an internal tool for exploiting the company’s knowledge as well as a business control system

·        In its value creation system Skandia links the measurement of IC and business process management directly to value creation, with stakeholders being identified as the managers, employees, share-community, customers, suppliers, and the surrounding community.

·        In order to improve the level of competencies, Skandia has been making use of Skandinaviska Enskilda Banken (SEB) to tap the pool of knowledge from its employees and how it can be used to fulfil the objectives of the company.

2.    Explain how the approach of Knowledge Management differs from traditional information management approaches using information systems.

Traditional information management system worked mainly with the intention of providing automation to the functioning of the company, so that different departments of the company are in a position to take maximum advantage of the automation process. On the other hand, knowledge management is basically based on the intangible asset called ‘knowledge’.

To tap knowledge, the management of a company has to do a self assessment, and take valuable inputs from all stakeholders. Knowledge is dynamic, and very difficult to measure, but if we look at the cut-throat competition on account of globalization policies, it becomes all the more clear that no organisation can survive without it. Knowledge can be tacit or explicit. The tacit on unarticulated knowledge comes more in the form of personal experience, difficult to formalise and which at times is difficult to share.

It depends upon the strategic management team of the company as to how they are able to translate the experience into valuable inputs. On the other hand explicit knowledge can be easily written down and codified. This depends upon the academic qualification, experience and training levels of the individuals. Therefore knowledge management is far more complex process, which helps in converting a machine based business to knowledge based one.

Managing the database of customers is useful information for taking decisions, but taking inputs from customers to make the workflow smooth and hassle free leads to knowledge management. While, traditional information management system could work to the advantage of the company if it had the requisite wealth of land, equipment, workforce, and the financial capital. But on the other hand in the knowledge based economy ‘knowledge’ becomes a key source of wealth, resulting in providing a competitive edge to the organisation.

The study by Brookings institute is an indication towards the importance of intangible assets in today’s context. The study indicated that the intangible assets accounted for just 17 percent of market value in 1978, but in 1998 this value share stands at 1998. In a nutshell, therefore, it can very well be stated that knowledge management includes the traditional information management system, but not vice-versa.

Case Study 5.1: Using social network analysis as part of a knowledge audit How can social networks analysis add value to the bank's knowledge management strategy? Social networks help in analysing a variety of factors leading to effective management of an organisation. Factors like performance, efficiency, resource utilisation, decision making, skills, training and development etc. can be analysed with the help of social networks. In case of a bank also social network can help in analysing the dependence of each function or department on other functions or departments.

For the bank the social network analysis helps in measuring and mapping the relationship and flow between customer care executives, group managers, branch managers, system analysts, ATM machines, e-commerce servers, m-commerce system, main server, computer terminals, and other related knowledge entities. If it is found in the network analysis that some actions are resulting in undue network hopping, then the network diagram can be suitably amended and policies can accordingly be framed. Similarly, if it is found that certain departments are found to be taking longer route to access some important facilities, then suitable amendments can also be made in the network diagram to reflect the changes.

For example, in the best interest of the bank, it will be made sure that the topmost managers should have fewer direct connections to their nodes, and yet they pattern of their direct and indirect connections should allow them access to all the nodes in the network more quickly than anyone else. It will also be ensured that they have shortest path to all others. This way the top management will be in best position to monitor the information flow in the network.

Discuss the difference between performance and facilitation networks Performance Networks: This type of network is associated with the core activities of the organisation. Nodes in such a network indicate how each department performs in order to make way for seeking information, analysing the information, making important decision, or resolving some issues and problems. The levels of efficiency and effectiveness are highlighted in such a network. Cohesion and ties amongst the nodes happen to be the measure of the effectiveness of the performance network.

Facilitation Network: This type of network helps in realisation of the performance network. This network indicates how appropriate facilities are created for different actors in the social network to play their roles so that the performance levels can be optimised.

Awareness, accessibility and communication are the key parameters for facilitation network. It is said that for a social network analyst, the world comprises of networks and not groups. The facilitation network therefore works in a manner to ensure that no node is deprived of the requisite resources. How the respective node performs subsequently depends upon the performance level of the respective nodes.

Case Study 5.2: Knowledge management strategy at the UK Department of Trade and Industry [DTI] Which approach(es) to knowledge management can you identify? The change and knowledge management unit (CKMU) at DTI undertook the project of providing infrastructure for embedding project and programme management with the stated objective of;

Improving the internal communications at DTI Preparing a dynamic change plan for improvement of functioning at DTI Three core commitments with which the work was undertaken included ‘reach out, value people, and be courageous’. Some of the important approaches adopted at DTI in this direction are;

Building up a database of internal trained facilitators to support the delivery and design of other’s awaydays. This was being done with an intention of improving the effectiveness of meetings and awaydays. The development of [email protected], a directory of staff skills, interests and experiences which would help users in learning from others in the department.

How did the DTI’s knowledge management strategy link to the overall strategy? The knowledge management strategy at any organisation will not have the desired impact if the strategists are not able to link it up with the overall strategy of the organisation. In this case the overall strategy of DTI included raising productivity and competitiveness. This strategy had set measurable targets for the next five years and chalked out the plan of action accordingly. The CKMU is supposed to play a supportive role in performance improvement. CKMU is expected to work in close coordination with all other departments, so that the overall knowledge base is a true reflection of functioning of the company.

Self Assessment Questions

Distinguish between data, information and knowledge. Why is this distinction significant for managers involved in business information management? Data: A fact, statement, or pictures, are all basic elements of information. When gathered in raw form it is termed as data Information: The processed form of data, which has been given relational connection, and which can answer a few queries like who, where, whom, what, when etc. is termed as information Knowledge:

When the information from multiple sources is linked to ascertain the reasons or attribute motives, we get the knowledge. It answers ‘why’. This distinction is significant for managers involved in business information management because they are entrusted with the task of analysing the existing circumstances while preparing futuristic projections.

Explain how information can be used for corporate performance management. Information can be used for corporate performance management in a variety of ways like;

i.                     Analysing the competitive strength of the organisation vis-à-vis the competitors

ii.           Assessing the preparedness of the company to take up newer assignments e.g. diversification, takeovers etc.

iii.                  Assessing the training and development needs of the existing workforce

iv.                 Appraising the performance of the employees

v.         Evaluating the requirements for additional workforce and accordingly preparing the recruitment strategies

Draw a diagram summarizing how an organization processes information A typical organisation information processing system is shown below

4. Which different types of information are used in an organization?

Some of the information can be of the type;

i. information concerning vacant position in the company

ii. Information regarding sale for the month of May 2010

iii. Information regarding expenses incurred on adversement during the month of April 2010

5. What are the characteristics of e-business and e-commerce? Which information types are involved in e-business and e-commerce management?

e-business and e-commerce are the latest addition to the technologically advanced methods of doing shopping, carrying out banking transactions etc. with the help of internet. The information types which are involved in e-business include;

i. Data about internet users in the city/ region/country

ii. Data about number of people doing online banking transactions

iii. Number of registered online customers with the company

iv. Number of registered online customers having made online purchases

6. Distinguish between information management and knowledge management.

Information management is more of a clerical/ administrative job while knowledge management is a strategic job

7. Describe the four stages of the business decision-making process and explain how information systems can support this process.

Four stages of business decision making process include;

Stage-1: Data Collection

Stage-2: Analysis and Evaluation of data

Stage-3: Formulation of strategies

Stage-4: Implementation and evaluation

8. Summarize the arguments for the existence of the IT productivity paradox.

The IT paradox states that many a times efforts to boost productivity results in failure of massive investments in IT. This is an indication towards the fact that IT and related systems should not be used in a non-judicious manner, without carrying out any feasibility study.