1. 1 Knowledge Management Ernst & Young

2. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan2 What is Knowledge Management? KM: Set of inter-linked business processes to capture and provide access to an organization’s collective knowledge (Knowledge Management: Philosophy, Processes and Pitfalls, Soo, Devinney, Midgley & Deering, CMR 2002). –Organizational learning –Knowledge storage/creation –Knowledge distribution Knowledge Management System: the infrastructure –IT (databases, networks, yellow pages..) –Organizational infrastructure processes, contracts, incentives, corporate culture, etc.

3. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan3 A Production Analogy Professional Services –knowledge is the “core product” Knowledge Management –the production technology of a firm –same role as machines/factories for an automaker Questions: How to –improve output? –improve quality? –generate competitive advantage? Critical distinctions –knowledge is a credence good –knowledge can be re-used

4. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan4 Disentangling the Issues Break-up into two related conceptual categories –Knowledge Exchange –how an organization goes about enabling exchange of the existing knowledge within an organization What’s your strategy for managing knowledge? (Hansen at al, HBR ’99) Codification, or Personalization –Challenges improve efficiency –easier location –adaptation of earlier solutions improve contribution (incentives, culture, etc.)

5. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan5 Disentangling the Issues (contd.) The other complementary issue –Knowledge Creation leveraging the diverse experience of agents to create –conceptual knowledge –frameworks –proprietary intellectual property Challenges –how do you manage the talent? –Aligning the Stars, Lorsch & Tierney 2002, HBS Press –The Dean’s Lament »I Lead, But I have no Control!

6. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan6 What to Emphasize at the Margin – Exchange or Creation? Knowledge Exchange –Supply-side scale economies lower a firm’s marginal costs of production through easier location, access, usability, etc. Knowledge Creation –Demand-side economies network externalities –the larger the pool of assignments, the more diverse the set of engagements, the higher is the quality of a firm’s intellectual database –increases a firm’s differentiation, consumer’s willingness to pay, and hence a firm’s competitive position

7. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan7 Optimal Choice of KM System Emphasis as a Function of Competition Intensity and KM-technology Performance

8. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan8 Appendix: INFORMATION AND KNOWLEDGE MARKETS: Can knowledge be sold as a product? Can new talk about an emerging industry?