Wednesday, October 3, 2007

Business Case for KM ... Continued ...

A very interest post by Luis Suarez, where he is trying to make a case for social computing ... and, I think this logic can be applied to the entire concept of KM ... and, a comment on the post by Frank Jania can, indeed, take this entire discussion about measuring the value of KM one step forward.

I have been using the term ROI for measuring the value addition from KM, primarily for want of a better word. However, I think Luis makes a very stroong point in favour of looking at ROI in a new way. This is necessitated by the fundamentally different nature of the intangibles we are working with today. The important point, though, is that while ROI the way it is defined, may not be an apt measure for measuring the value of knowledge, this is no reason to not measure, because end of the day, the CFO would need to look at some numbers to determine whether the investment is worth it.

Frank takes the discussion a few steps forward, with the idea of deltas. I think this could be a good starting point towards an evolving concept for measuring knowledge, because this takes into consideration the fact that there is a baseline (today), and there is a point of measurement (the future). The only thing here is, KM is usually one of the improvement initiatives which run in an organization, and hence, there would be many candidates who could say that the improvement has happened because of them. Which means that there is no way to isolate the impact of KM from other initiatives. So, for example, it is not sure whether Frank would have been able to close the sale without collaborating. He might have, but then, there were are conjecturing.

This, to my mind, is an essential issue which we need to address, because when we look at knowledge, there is no linear relationship between cause and effect, but rather, what I like to call circular relationships between multiple causes and multiple effects. And, we are not even close to being able to figure out these relationships. Having said that, I think Frank has come up with an interesting concept to take the thought process forward.

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