Znalosti 2001 (Prague. June 19-21)

1. Znalosti 2001(Prague. June 19-21) Business Value Perspectives of Knowledge Management D.Dunn@MMU.ac.uk

2. Presentation • Positioning Knowledge Management (KM) • Identify evolving business strategies • Provide case evidence • Leave some KM dilemma's for Znalosti 2001 • Conclude Dennis Dunn. Znalosti 2001

3. KM as a dominant theme • Just another management theory ? BPR; ERP; CRM • Links to Learning Organizations (Senge, Burgoyne etc) • Has KM taken over the LO domain ? (Conferences, Books, Journals) • A natural evolution of the information age • What is an Organization that it may learn ? • Critical (and dominant) role of I/S in KM • Dichotomy, given root definition of knowledge • What KM strategies for business are emerging ? Dennis Dunn. Znalosti 2001

4. Generic KM business strategies • 1. Knowledge replication i.e. banks, fast food chains, retailers e.g. Toys ‘r’ Us, McDonald’s, INTEL etc, all provide examples of conducting operations in pretty much the same way wherever they are located world wide. • 2. Knowledge diffusion/leveragability is about “knowing what we know, and using it”. This seems to be the key strategy in most KM endeavours. • 3. Knowledge innovation, which is concerned with knowing what comes next e.g. new products, new services, new ideas that might keep an organisation competitive. (Prusak & Dunn 2001) Dennis Dunn. Znalosti 2001

5. Generic KM business strategies • 4. Knowledge giveaway,which is concerned with, what products of our knowledge can we make available at no apparent cost to the consumer that will improve our profile, and consequently our business success. E.g. MIT, Microsoft etc • 5. Knowledge commercialisation, which is concerned with, what does the organisation know from its own KM practice, that it can sell, i.e.. Consultancy, products and services. (Prusak & Dunn 2001) Dennis Dunn. Znalosti 2001

6. Gs 1: Knowledge replication • Finding the global formula and deploying it. • McDonald’s, Toys-R-Us, Mrs Fields Cookies. • Avoid business deviation. • Allow product innovation (the Maharaja burger India, guava sauce Brazil) • Global, reinforces brand image. • Optimising operations, maximising value. • Economic benefits, local and corporate. Dennis Dunn. Znalosti 2001

7. McFacts • McDonald’s is the worlds largest toy distributor • Everyday 0.5% of world population visits a McDonald’s; 4 new McDonald’s open • There are 23,300 McDonalds in 120 countries • 1/3rd all USA cows are used by McDonald’s • Best known brand worldwide (since 1996) • 1 in 8 Americans has worked for McDonald’s • Diversifying into ‘Coffee shops’ (Starbucks) (Guardian April 2001) Dennis Dunn. Znalosti 2001

8. Gs 2. Knowledge diffusion/leveragability • British Police Force (Lancashire, UK) • POPS (Problem Oriented Policing) • Targeted at operational level officers • Supporting specific issues/areas • Building organizational histories • Active and passive dissemination strategies • Reduction in crime (2000) • Increase in crime detection and arrests Dennis Dunn. Znalosti 2001

9. Gs 3. Knowledge Innovation • www.cooksons.com ‘DIY shop’ • Traditional business unable to compete • Mega store competition • High cost town centre position • High cost inventory levels • Uncompetitive profit margins • Limited market penetration • Not ‘if’ but ‘when’ will they collapse ! Dennis Dunn. Znalosti 2001

10. www.cooksons.com(front office) • Virtual internet web page inventory • Customer browses, gets advice • Order placed • Payment made via credit card • Goods received • 95% of sales are electronic • Excellent customer satisfaction surveys Dennis Dunn. Znalosti 2001

11. www.cooksons.com(back office) • Business network, suppliers, credit card Co’s, product experts, distributors…all operate under Cooksons facade. • Supply Chain & Customer Requirements Mgmt • Search engines (re)position web site • Benefits • No stock of any consequence • Incredible cash flow to the business • Increased turnover and profitability • Regional market has become national market • Almost a virtual organisation, trading in its knowledge • Competition for the Mega-stores that threatened them Dennis Dunn. Znalosti 2001

12. Gs 4. Knowledge giveaway • Massachusetts Institute of Technology (MIT) • One of the world’s foremost Universities • Nearly all courses free on internet • 500 courses; us$ 10m+ (not awards) • To counter ‘privatisation of knowledge’ • May make all universities re-think the way to do things Dennis Dunn. Znalosti 2001

13. Gs 5. Knowledge commercialisation • British Gas Plc (utilities provider) • The ‘3-win’ scenario • 1st win, is that the organization has improved itself with effective KM (turnover/profits) • 2nd win, is that from their experience of win1, they have developed and market KM systems resulting in extra revenues • 3rd win, is that win’s 1&2 are mutually inclusive and so contribute to KM in an en-cultured organization Dennis Dunn. Znalosti 2001

14. Some Knowledge Management dilemma's • ‘knowledge’ is an irregular asset • If you can’t manage true knowledge ! then KM appears a misnomer ? • Intranets “are our window on organizational knowledge” (ICL) Internets “are our KM Business Network” (www.cooksons.com) • KM and LO have become an industry standard • KM is ‘peoplecentric’ (Dunn 2000) Dennis Dunn. Znalosti 2001

15. Conclusions • Emergence of some interesting generic KM business strategies. • Organizations might pursue a number simultaneously. • Business strategy suggests this is a CEO issue (delivered through I/S) • KM may(not) deliver competitive advantage, but those who fail to develop KM strategies will be at a competitive disadvantage. Dennis Dunn. Znalosti 2001

16. Znalosti 2001(Prague. June 19-21) have a nice day ! (McDonald’s)