Managing organizational knowledge in a revenue agency: the experience of Washington, D.C.

• Author: Lesser, Eric

Like many of its public-sector counterparts, tax and revenue agencies have come under significant pressure to reinvent themselves. Headlines in many major newspapers have depicted these agencies as inefficient, self-serving bureaucracies that are insensitive to the needs of their constituents, including taxpayers, government officials, and their own employees. Further, due to budget cutbacks and to the number of individuals retiring from the civil service, agencies are being asked to do more with fewer resources. These are major challenges facing tax organizations. However, there is a powerful lever that can improve agency efficiency, effectiveness, and capability: the management of organizational knowledge. The best way to capture this is by honing in on the experience and expertise of individuals who have extensive knowledge of taxpayers, policies, and work processes.

Organizational Knowledge

In the past, most tax agencies concerned themselves primarily with issues around data and information. Indeed, to a large extent, the primary responsibility of tax agencies is to collect and receive transactional data regarding income, sales, appraisal values, etc.

Today, many organizations still wrestle with the accuracy and reliability of their data. Advances in distributed technology have made it easier to connect data from different sources and use the data to paint a more accurate picture of a given taxpayer. In addition, many organizations have begun to explore alternatives, such as phone- and Internet-based filing systems to improve their data accuracy and make it easier for individuals and corporations to file their taxes.

Recently, advances in data warehousing and data mining have made it easier to transform data into information or one-way messages that are designed to assist individuals in their decision making. Management reports and legislative documents have attempted to provide this kind of information for years. Many times, organizations find themselves in a position of information overload; they neither have the time nor the ability to make sense of the variety of information sources with which they are bombarded on a daily basis.

However, few tax and revenue agencies have attempted to use the collected data and information to leverage knowledge. within their organizations. Knowledge, as defined by Laurence Prusak and Tom Davenport in Working Knowledge is:

"the fluid mix of framed experience, values, contextual information and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knowers. In organizations, it is often embedded not only in documents or repositories, but in organizational routines, processes, practices and norms."(1)

Even though tax agencies are driven by the collection of data and information, they operate on organizational knowledge. Individuals with specific knowledge of customers, regulations, and procedures are constantly creating, sharing, and reusing knowledge to sustain these organizations. Unfortunately, this knowledge is often not actively managed and supported in most agencies, remaining untapped much like an undeposited refund check.

Knowledge Issues

There are five areas where knowledge plays a significant role in the day-to-day operations of a tax agency.

* Educating Taxpayers about their Tax Requirements. One challenge faced by many tax agencies is ensuring that the general public understands their tax obligations. While this sounds somewhat obvious, its importance is often overlooked. For example, an individual who opens a small business may be required to pay a myriad of taxes, ranging from property tax, sales tax, and employee withholding...