Knowledge Management Audit Practices and Concept
It is very rightly said that Knowledge is power but according to Wagner and Minerd, knowledge isn’t power, but the good implementation of knowledge management practices is power. Knowledge is on the most important intangible asset of an organization (Debenham, 1994) and it should be dealt with utmost priority. An organization should maintain an infrastructure of knowledge and create a culture of knowledge sharing (Perez-soltero, 2006). The below points are covered as asked in the question:-
Main focus/objectives of the article:
The article details a knowledge audit that was conducted in a South African retail bank. The article in detail focuses on the methods which should be established and followed while a knowledge audit is conducted for a bank. The article focuses on the fact how important knowledge is for all the organization and it should give focus on keeping knowledge repositories were in knowledge pertaining to all the areas should be kept. The article continuously focuses on the fact that knowledge should be easily accessible to all the employees be it related to a specific business unit or customer related or any product related which will bring efficiency and make the organization more successful. A knowledge audit is very important. Knowledge areas that are critical should be defined so that proper focus can be given to those areas and the knowledge database can be made stronger so that it can be used by the employees with ease. The article focuses on various parameters which should be looked upon while conducting a knowledge audit. It also provides recommendations basis the audit outcome on the key areas where the Bank should work to improve or implement its knowledge management strategy.
Background of the organization under investigation:
The organization in the article is a South African retail bank. In the 1990s, many foreign banks started to enter the South African market due to changes in legislation. The retail banks in South Africa work in a very complex environment and there are five major banks that controls almost 90% of the total banking state in South Africa. This retail bank also started an initiative for corporate-wide knowledge management. The initiative of the bank was mainly to create ways of how knowledge should be transmitted within the bank and it was also to ensure good practices for knowledge management.
The knowledge audit approach followed in the study:
The basic purpose of knowledge audit is to assess the knowledge management activities within the retail bank. The audit approach followed in the study was a mixed research methodology. The audit was conducted in the following manner:-
- 827 employees out of 31000 employees were taken as a sample base for conducting the audit.
- A sample of the questionnaire was sent to these employees by email to assess their knowledge requirements. A cover letter was also sent to these employees which mentioned in detail the purpose of the audit.
- Employees responded to the questionnaire over a period of 2 months and multiple reminders were sent to employees in this period.
- A team of senior managers which consisted of 30 members was also interviewed. These managers had a sound understanding of knowledge management. The purpose of the interview was to understand and form a perspective on the knowledge requirement of the bank.
- A meeting was conducted with senior management to identify the business objective of the bank along with its mission and vision. Some documents were collected from senior managers which were considered as the basis to understand the processes of the bank.
- The major areas around which the audit was conducted hovered around the below points:-
- Knowledge inventory analysis: This analysis basically helps in determining gaps and strengths in the processes followed by the retail bank. In this process knowledge inventory is compiled wherein all the knowledge that is available and is being used by the bank is taken into account. The areas where knowledge gaps exist and attention is required for the future are taken into account. This analysis also helps in locating the place where the knowledge of the core process of the bank is kept.
- Knowledge flow analysis: As the name indicates knowledge flow analysis is done to analyze how knowledge flows in the bank. It measures how knowledge is shared among employees of the same department or different departments. It identifies how easily the knowledge is accessible to employees when they are in need of it and also how knowledge is created in the system. It also analyses the infrastructure that the bank has and the way it is used to capture the knowledge created and stored so that it can be shared easily when required by the employees in different processes.
- Knowledge mapping: Knowledge mapping is basically done to locate where the knowledge is stored (Repository) in the bank. This helps employees to know where to look for when they need help.
- Knowledge audit reporting: This part reports all the above together. It includes the outcome of knowledge inventory, inventory flow analysis and knowledge mapping. This report is very useful and can help to form a strategy for knowledge management.
The major findings of the study:
There are many findings of the study and some of them are as follows:-
- Various objectives were identified which were expected to improve the processes followed and help the bank achieve its goals.
- It was also discovered that in many cases employees are not aware of the knowledge that another employee possesses and hence it is very important to have a repository of knowledge that can be referred to.
- One of the findings was also that it is very important to have knowledge of past projects and new business opportunities which sometimes can be very helpful
- As a part of the audit process, it was found that interviewees who were selected for this audit had a precise view of the content of the knowledge areas pertaining to financial procedures.
- It was identified that it was difficult for the financial department to get into insights of the need of activities of the projects to put justice to the transactions that are being taken place.
- Knowledge management has to be built on information that has to be given by management and that information must be sound and appropriate and must cover all the processes. In other words, the information must be holistic in nature.
- Some areas were identified where there were a lot of shortcomings like bank’s customers, there was very little knowledge available about it. Another area was business contacts and it was found out that it was very important for the employees to know the business contacts in their target enterprises.
- One of the other knowledge requirement area was around the knowledge pertaining to the industry in which the bank operates i.e. finance industry, knowledge pertaining to the existing business trends and the best practices which should be followed.
Recommendations made in the article:
Knowledge audit helped in addressing the critical knowledge requirement of the South African bank. The results of the audit were shared with the employees so that they can check and provide their feedback and to give their review. The various recommendations made in the article are as follows:-
- It was understood that in order to be successful it is very important to have a knowledge repository and also to link the knowledge available to each of the business processes so that employees new to the process know which knowledge is to be linked to which process. It is very important to understand the impact knowledge has on organizational value.
- After the knowledge audit was conducted the Chief Executive Officer of the South African Bank recommended a huge budget for implementing a knowledge management strategy that would help the bank to manage the knowledge it possesses, create a proper knowledge repository, and map the knowledge to the business process, creates an environment for knowledge sharing among the employees and various such other things which would help the bank to solve various day to day issues with respect to knowledge transfer and similar other issues.
- Knowledge management training should be mandated and as per the recommendations made in the article at the specialist level should be provided to the knowledge management team and for other employees training was recommended at intermediate or beginners level depending upon the employee and other factors such as which business process he or she is in and how critical is the processes from the bank’s business standpoint, how easily is the knowledge available in that process and various such other factors.
- Training would basically help the employees to understand the basic approach and understanding of how important is knowledge audit and how the knowledge repository plays an important role in creating an organizational value. Training would also help the employees to understand the tools and software that are being used in the process so that they become familiar to it and can use the same with ease.
- One of the most important recommendations was that a five-year plan should be created by the bank for the implementation of knowledge management strategy and a knowledge audit would give a basis of how knowledge management strategy should be developed. The plan should be robust and it must contain all the details such as what are the deliverables for the employees, timelines by when they should deliver, there should be some interim targets so that measurement can be tracked, risks of how the knowledge should be managed should be covered in the plan, the plan should specify what is the role of each employee and what are their responsibilities and the plan should also measure success so that a periodic feedback and review session can be done.
- Some of the initiatives were recommended which were specific to business units as the study in the article shows that there was a lack of knowledge in a few of the business units.
- It was recommended to have a single-stop solution for all the employees which should act as a knowledge base for the enterprise as a whole and access for the same should be given to all the employees which would enable the employees to access to this enterprise-wide knowledge server. These will help employees to gather more information on some specific details like customer details, and details related to products or services offered by the South African Bank.
- Knowledge management initiatives can be broadened only once the strategy is made and implemented. It should be broadened to cover more areas of knowledge covering all the business units of the bank, all the products and services details, the customer details of the bank, etc.
Comparison to similar studies:
When the study or details of methodologies is compared with similar studies below are the discussion points that can be seen:-
- The methodology used in the South African retail bank for conducting an audit was through a sample questionnaire sent to a handful of employees and a few of the senior management people were interviewed. In comparison to other audits various enterprises have used other methods of collecting data points like group discussion, online surveys, face to face meetings with each employee on a monthly or quarterly basis (GOUROVA, 2209).
- In similar case studies, a lot of other data are analyzed like the commercial procedure of the organization to better understand the knowledge requirement of the organization, and accordingly knowledge management strategies are decided (Lauer, 2001).
- Other studies have covered more stakeholders as a part of the knowledge management strategy and they have included a few of the stakeholders or parameters like suppliers, the atmosphere/ environment in which the enterprise operates. This gives more scope for covering all the areas of the organization and makes knowledge audit more exhaustive (Hylton, 2002).
- Many organization has done a benchmarking exercise wherein they have set standards for the knowledge audit procedures and knowledge management strategy which helps them compare at a periodic interval the performance of the organization. This helps to track the progress and improve the standards every year.
Debenham, J., 1994. The Knowledge Audit. The School of Computing Sciences, The University of Technology, Sydney, PO Box 123, Broadway 2007, Australia, 11(3), pp. 201-211.
GOUROVA, E., 2209. Knowledge audit concept, processes and practice. WSEAS TRANSACTIONS on BUSINESS and ECONOMICS , 6(12), pp. 1-1.
Hylton, D. A., 2002. Measuring & Assessing Knowledge-Value & the Pivotal Role of the Knowledge Audit. Hylton Associates, 1(1), pp. 1-1.
Lauer, T., 2001. Knowledge Management Audit - a methodology and case study. AUSTRALASIAN JOURNAL OF INFORMATION SYSTEMS, 9(1), pp. 1-1.
Perez-soltero, A., 2006. KNOWLEDGE AUDIT METHODOLOGY WITH EMPHASIS ON CORE PROCESSES. European and Mediterranean Conference on Information Systems (EMCIS), 1(1), pp. 6-7.