Managing Intellectual Capital.

• Author: DUFFY, JAN
• Position: Brief Article

The KM software market can be segmented into two major categories: KM access software and KM infrastructure tools and technologies. The tools that comprise the KM Infrastructure provide the foundation on which individual and group access to knowledge is built. The ultimate objective of managing knowledge is to capitalize on the intellectual capital, specifically to encourage knowledge transfer and support knowledge sharing and reuse.

The process that drives knowledge management is relatively uncomplicated: capture information, organize it, and distribute it (Martinez 2000). But, as Martinez points out, leveraging expertise requires more than technologies that collect and distribute information. Leveraging captured knowledge is dependent on its actually being used, which is dependent on its incorporation into business practices. The most successful implementations are those that focus on capturing and reusing knowledge associated with a specific business process. Intellectual capital management (ICM) software supports the integration of know-how into business processes and is one of three major categories of KM access software.

Intellectual capital management encompasses a wide range of activities, all of which are designed to help an organization gain maximum advantage from the knowledge that is continuously generated as a result of day-to-day business practices. Recognizing which knowledge is the most valuable is the relatively simple first step. It is more difficult to develop and perfect the ability to capture this "most valuable" knowledge and reuse it as it is being generated. Technology that supports knowledge harvesting in a continuous and somewhat unobtrusive way is now available. This suggests that an opportunity now exists to convert knowledge almost immediately into something that is reusable and sharable.

Repeatable business processes are an important component of an enterprise's structural capital and provide the foundation for developing core capabilities that are difficult for a competitor to replicate. If these processes are improved on an ongoing basis and readily adopted by employees, the value of the corporation's business structure -- and therefore its total value -- increases. ICM software is designed to extract and capture employee know-how related to the successful completion of a business process, thus providing the means to capitalize on practices that have proven efficient and effective.

The application monitors and "documents" process participant activity and then publishes the results, making them available across the enterprise for reuse by others. In this way, ICM software facilitates the transfer of invaluable know-how into corporate policy and procedure and encourages broad awareness and subsequent adherence to successful business practices. The result is increased reliability in the quality of work products. This type of consistency and reliability enhances an organization's relationship with its customers and therefore makes a significant contribution to total corporate value.

Research indicates that using ICM software to capture human capital is challenging but doable (McDonough 2000). Of particular value is the ability to capture know-how as it is being developed. For example, when someone works through a problem or process for the first time, the ICM application automatically populates the enterprise knowledge base with what is essentially knowledge that is available publicly for the first time. In this instance the result is a collection of unique core capabilities that can be shared across the enterprise. It is unlikely that a competitor will have the same combination of human talent and technology; therefore it is equally unlikely that a competitor will have the ability to replicate these unique core capabilities any time soon.

It is obvious that the ability to use technology to transfer expert knowledge across teams and across organizations offers significant benefits. Instead of repeatedly teaching others, experts are at liberty to spend more time pursuing the generation of new knowledge in their particular areas of expertise. Also, with ICM technology the expert's location becomes less critical, and the knowledge can be shared without concern for physical location. Experts or others with consistent or market-leading approaches and methodologies can share their know-how quickly and widely, providing an organization with an advantage that is difficult to imitate. This capability is particularly valuable in today's global marketplace because it allows an organization to capitalize on its "best brains," regardless of...