Literature review: Measuring KM Initiatives

A Knowledge Management (KM) initiative:

• may have a fuzzy beginning and could perpetuate indefinitely;
• attracts varying degrees of legitimacy and leadership support, and;
• comprises both mechanistic and organic dimensions.

Measuring a KM initiative drives from:

• an economic front (i.e. return on investment);
• an strategic front (i.e. further developments organisation-wide, such as growth in market share), and;
• an political front (i.e. positioning as champions of leveraging organisational knowledge).

Elements to measure are:

• measuring activities;
  • System metrics (seek to approximate the usefulness and responsiveness of supporting technologies - number of downloads, site accesses and so on)
  • Output metrics (measure characteristics such as the effectiveness of lessons learned, user ratings, frequency of being rewarded, number of problems solved and so on)

• measuring knowledge assets (also known as intellectual capital);
  • Tools:
    • Skandia Navigator;
    • Intellectual Capital Index;
    • Technology Broker, and;
    • Intangible Asset Monitor.
  • Methods:
    • Direct Intellectual Capital (DIC) attempts to identify various components of intangible assets (is on organisational level)
    • Market Capitalization (MC) assumes that the value of intellectual capital is the difference between and organisation's market value and the book value of its net assets (is on organisational level)
    • Return on Assets (ROA) seek to estimate the value of an organisation's intangible assets on the basis of the organisation's average profits, average tangible assets and the industry's average ROA over a fixed period of time (is on organisational level)
    • Scorecard (SC) is similar to DIC except that they do not assign monetary terms to the intangible assets (is on project level)

• measuring impact on organisational processes (deployed in time-series design);
  • Knowledge Management Assessment Tool (KMAT) - examines leadership, technology, culture, and measurement.

• measuring impact on business objectives (by collecting systemic anecdotal evidence).

Source: Alton Y.K. Chua, Dion H. Goh. Untying the knot of knowledge management measurement: a study of six public service agencies in Singapore. Journal of Information Science, Volume 34, Number 3 (June 2008), pp. 259-274

Organisational Web 2.0 applications

What is the value of knowledge management? Can you measure this value? These are common questions that indicate how important it is for leaders to quantify and justify knowledge management practices. It is difficult to give a straight answer regarding the return on investment of knowledge management practices, however, academics are more and more succeeding in creating tools and mechanisms to show how increased intellectual capital (that is an organically process) effects the business (improved decision making, innovation and so on). But we are far from getting to know, or getting leaders to show, what the return on investment is of knowledge management practices. Today McKinsey reported on Web 2.0 implementation that most of the organisations are adopting Web 2.0 tools to deal with knowledge management (83 %), but that the financial return of these technologies is not known! Therefore, they argue that 22 % of the leaders are even not encouraging Web 2.0 usage? Why this ignorance; why not looking further than what numbers are (or not) saying.

Further information here