Tuesday, September 18, 2007

Business Case for KM

This is something a lot of knowledge managers are struggling with ... How do develop a business case for KM. In other words, how to convince the senior managers in the organization that KM is important, and that it is worth the Money they are being asked to invest. To an extent, this is linked to the problems that are faced whenever companies try to value the knowledge they have.

Since there is no way as of yet to measure knowledge, and hence, to associate a ROI number to the KM initiatives, the dilemma is how much to invest. If a business case cannot be developed based on what KM can do for the organization, then we could try the flip test ... What would happen if KM was not there. In other words, how would KM impact business if it werent there. This again is a tricky proposition, but definitely simpler than a rigid analysis.

The key here is to ensure the KM initiative is linked to the strategy of the organization. If one works backwards from the strategy, one can find out which are the critical business processes in the organization, which are what are also called levers of business. Once these are identified, then the task at hand for the knowledge manager is reduced to determining how KM adds value to these processes. This is a far easier thing to do, because, as I wrote earlier, it is far easier to define measurements and value in a specific context than it is to do this in the generic sense.

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