The Importance of Knowledge Management

Benefits of Knowledge Management

Effective knowledge management (KM) is essential to almost any business. Regardless of its size or subject matter, a company should use the knowledge it possesses in the most effective way possible. Techopedia gives a detailed definition of KM, but essentially KM is about sharing information and applying it to situations. KM helps to create a sort of "knowledge network" so that when someone does not know something, they have an easy way to find an answer. Here are some reasons why KM is important for businesses:

Cost Reduction

  • A good KM system serves as a collective memory. When a process is completed or a document created, it can be saved in a database so no one has to do it over again. Eliminating repeated efforts saves money.
  • Sharing information helps highlight best practices that should be repeated and pinpoint mistakes or inefficiencies that should not be. This translates to avoiding potentially costly mistakes.

Knowledge Preservation

  • With KM, the knowledge that one employee has pertaining to processes and practices is not lost if they retire or move on from the company.
  • This also applies to "tacit" knowledge, the kind that comes from experience with a client or supplier, like Mr. Brown is our best consultant on "X", but it is better not to ask him during tax season because he is a part-time accountant.

Overall Optimization

  • KM helps connect employees to each other. By sharing and communicating information through a KM system, staff members learn who is an expert on what and how they can collaborate on projects. It also helps with topics that are obscure or extremely complex because knowledge collected in the past will be available to current employees.
  • Often times, sharing ideas spurs innovation. Employees work together and use company knowledge to improve existing products or services, as well as creating new ones.

Knowledge management is of utmost importance because it connects the ideas and experiences within a company. Everything the company knows is shared and preserved so that costs are reduced and workflow is optimized. KM is a process that should be encouraged consistently. It is not solely about technology, but a software program is a good place to start. Try Giva's cloud-based eKnowledgeManager and remember that better KM can mean a stronger business.