Insight

Accelerate Your Digital Transformation Process with Knowledge Management!
Dr. Agus Setiawan

PhD Graduate and result-oriented Director with 25 years experience with involvement in all levels of Business Strategy, Sales and Marketing, Managing Project and Product Development. Aside of managing a company, he is also the best corporate trainer and public speaker in seminar and conference.

Accelerate Your Digital Transformation Process with Knowledge Management!

With the dynamic technology advancements as well as fast-changing customer demands in today’s digital era, digital transformation is seen as a must-to-be-done activity by almost all organizations, particularly the existing business if they still want to remain competitive in the market, competing with new tech-driven companies, or commonly known as "start-ups".

Digital transformation itself is defined as the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. Some defined digital transformation as an ongoing process of discovery of new ways to meet the ever-evolving demands of digital customers. Gartner (n.d.) defined digital transformation as “anything from IT modernization (for example, cloud computing), to digital optimization, up to the invention of new digital business models”.

In the digital transformation process, knowledge management plays a significant role to determine its success. This article will discuss further about knowledge management and how it helps organizations accelerate their digital transformation process.

Knowledge Management

What is organizational design?

The term “knowledge management” was first invented in the 1980s by Peter Drucker, one of the most widely known and influential thinkers on management and also known as the “Father of Modern Management”. Later in 1990s, knowledge management was recognized as a discipline, although some argue that knowledge management has been existed for centuries in the matter of capturing, storing, and distributing knowledge. Knowledge management is the ability to capture, adapt, transfer, and reuse the “critical and relevant” knowledge of the organization to continuously improve performance at the individual, team, and organization level.

Several experts have tried to provide their own definition of knowledge management. Jennex (2005) defined knowledge management as the practice of selectively applying knowledge from previous experiences of decision making to current and future decision-making activities with the express purpose of improving the organization’s effectiveness. Holsapple & Joshi (2004) considered knowledge management as an entity’s systematic and deliberate efforts to expand, cultivate, and apply available knowledge in ways that add value to the entity in the sense of positive results in accomplishing its objectives or fulfilling its purpose.

In Horwitch & Armacost’s paper (2002), they explained that knowledge management is the creation, extraction, transformation and storage of the correct knowledge and information in order to design better policy, modify action and deliver results. Duhon (1998) elaborated the definition of knowledge management as a discipline that promotes an integrated approach to identifying, capturing, evaluating, retrieving, and sharing all of an enterprise's information assets. These assets may include databases, documents, policies, procedures, and previously un-captured expertise and experience in individual workers (Duhon, 1998).

4 Components of Knowledge Management

The importance of knowledge management components from the fact that it is the driving force behind every organization in the modern era. Knowing how crucial it is to understand each element of knowledge management allows you to give each one your full attention, ensuring that the end results pertain to knowledge management. There are 4 components of knowledge management which are as follow.

1. People

The people are the ultimate holders of knowledge and are responsible for boosting knowledge management. An organization needs two different types of people to start a project. The first kind consists of those with extensive knowledge and expertise in the subject matter, who offer sponsorship and aid in the formation of a tactical organization. The other category consists of the stakeholders who will direct you in putting your strategy into action. Start by looking for the stakeholders in the IT and HR departments before hiring them.

2. Process

The goal of knowledge management processes is to obtain, create, gather, and share knowledge. The knowledge management process improves interpersonal communication and fosters positive relationships between people. Main knowledge management processes can be divided into four main processes.

a. Knowledge Acquisition

One method of generating knowledge is through the acquisition of knowledge assets. The knowledge assets include raw data, knowledge of new technologies, and knowledge of new products acquired from competitors.

b. Knowledge Storage

Knowledge is stored when it is kept in a repository along with newly acquired knowledge. The knowledge repository might be a computer database that holds information about a particular field of knowledge.

c. Knowledge Distribution

All employees of the company can access the collective knowledge through the knowledge management process known as knowledge distribution. Sharing knowledge allows people to transfer explicit and implicit knowledge to others.

d. Knowledge Use

Utilizing knowledge is the process of using the information at hand to carry out tasks and make important decisions. By using routine and direction, knowledge is applied.

3. Technology

The speed at which knowledge is transferred increases depends on the technology. By putting in extra effort and wasting time, people can quickly acquire excessive knowledge on any subject thanks to technology. As a result, they are free to use and spread the best information whenever and wherever it is needed.

4. Strategy

Strategies are made to make it easier to comprehend the wants and needs of the general public and to help acquire accurate knowledge. The strategy must be stable from a business perspective given the growing challenges. It will undoubtedly help an organization's employees, boost its worth, and open up new opportunities. The tools, roles, budget, and positive effects of knowledge management on the organization must all be taken into consideration when developing the strategy.

How Significant Knowledge Management is in Digital Transformation?

It is crucial to understand that digital transformation is made possible by digitization and digitalization. Even though these procedures are expensive, they might not be enough to guarantee the success of the digital transformation process. It is important to first educate oneself about the information that needs to be digitized as well as the processes that must be done so and when. This knowledge is acquired through techniques for knowledge sharing, or knowledge management.

The process of digital transformation is ongoing. It entails creating and upholding a setting where individuals feel at ease engaging, interacting, and incorporating ideas.The learning, unlearning, and relearning process is a crucial step in the digital transformation process. Organizations are better able to create knowledge management strategies to support digital transformation processes as they grow more mature in knowledge management, resulting in the desired outcomes.

Giving people the knowledge they need to make business decisions is the aim of knowledge management. This means that in order to establish innovations that enable development, the necessary knowledge should be made available to the appropriate people at the appropriate time and used to improve business efficiency (Vukotić, Zakić & Ćurčić, 2017).


Conclusion

The realization of DX, which can lead to a higher level of market competitiveness, the successful accomplishment of business goals, better product development, improved customer orientation, etc., can be aided by an adjusted perspective of knowledge and continuous learning (Schumann & Tittmann, 2015). Any organization's driving force now is knowledge management. People are always required to facilitate knowledge sharing, regardless of the size of an organization or the knowledge needs that must be met.


Reference:
Duhon, B. (1998). It’s all in our heads, Inform, 12(8), 8-13.
Jennex, M. E. (2005). What is KM? International Journal of Knowledge Management, 1(4), i-iv.

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