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Companies turn to knowledge management to solve information overloadCurrent IT systems deliver too much data and not enough insight, according to a new survey of global executives by the Economist Intelligence Unit. Knowledge management solutions are now the most important strategic technologies for large companies, according to a new report and survey of European executives by the Economist Intelligence Unit, sponsored by Tata Consultancy Services. In the survey, 67% of companies cite knowledge management/business intelligence solutions as important to achieving their strategic goals over the next three years. This compares with 63% that accord the same level of importance to new CRM solutions, and 35% that see mobile/wireless technology as vital. The findings, published today in a new report called “Know how: Managing knowledge for competitive advantage”, are based on a survey of 122 executives representing large companies in a cross-section of industries. The survey reveals that, despite huge investments in corporate IT, executives currently feel unable to exploit large amounts of corporate information. Two-thirds of companies in the survey complain that while their IT systems generate huge volumes of data, much of it is not actionable. According to the report, executives are now seeking smarter IT tools that enable them to filter, prioritise and analyse corporate data. The key findings of the report include the following: • Too much information impedes decision-making. Over half (55%) of executives say that IT’s failure to prioritise information is the main barrier to effective decision-making. Consolidating information and providing consistent performance indicators are regarded as the most important step firms can take to improve the speed and quality of decision-making. • Good customer information remains elusive. Knowledge about customers, their preferences and their behaviour is the overwhelming focus for improving the quality of information in large organisations over the next three years. The focus of CRM initiatives is now shifting from automating processes and collecting data to enabling more sophisticated analysis of customer requirements and buying habits. • For managers, relevant information is more important than “information anywhere”. When asked where IT needs to improve most to help managers make better decisions, the top two priorities are to make it easier to analyse and drill down into information (40%) and improve the quality of data (31%). Only 12% of executives see ensuring access to information anywhere as a priority for improvement. • Corporate culture is as important as IT for effective knowledge management. The biggest obstacles to knowledge sharing in large organisations are organisational, rather than IT-related. Half of executives say that internal barriers between departments hamper information sharing. Ignorance of what knowledge exists, or of where to find it, is another major barrier according to 41% of respondents. In some cases, a simple solution such as keeping a regularly updated record of who knows what can be more effective than throwing IT at the problem, according to the report. • Effective knowledge management pays. Executives increasingly see knowledge management as a vital tool for competitive advantage. One case study in the report shows how Schlumberger, an oil services company, achieved a return on investment of $200m in a single year from a recent knowledge management initiative. “Corporate knowledge is notoriously difficult to manage, but it is a problem worth solving, ” says Daniel Franklin, editorial director of the Economist Intelligence Unit. “As this research shows, a growing number of firms now believe there are tangible rewards to be gained from sharing knowledge effectively. ” “This research underlines our belief that knowledge management is about more than effective IT. It has three critical and complementary components: people and culture; infrastructure and technology; and processes and information flow,” said Mr S. Ramadorai, CEO and MD at Tata Consultancy Services. “Without addressing corporate culture as well as IT, or using technology to make information actionable, knowledge management projects are likely to fail. It is therefore imperative that businesses work to architect and implement effective and comprehensive knowledge management solutions that enable them to make high-impact decisions in a timely manner.” Know how: Managing knowledge for competitive advantage is available free of charge from the Economist Intelligence Unit’s Executive Briefing website (http://eb.eiu.com). About the survey The Economist Intelligence Unit conducted a survey of 122 senior executives in May and June 2005. Respondents were drawn from large companies with over $1bn in annual sales revenues. In total, 16 industries were represented, with the majority of respondents coming from the financial services, telecoms, healthcare and pharmaceuticals, professional services, consumer goods and manufacturing sectors. Over half (57%) of respondents came from the UK, with the rest coming from countries in west Europe. About the Economist Intelligence Unit The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of over 500 analysts, we continuously assess and forecast political, economic and business conditions in 195 countries. As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. About TCS’ Knowledge Management Practice TCS has developed a unique model that measures the maturity level of Knowledge Management in an enterprise. It has a dedicated practice to focus on such solutions, with 250+ multi-skilled consultants and a number of alliances with market-leading vendors in this area. To date, it has successfully managed over 40 global knowledge management implementations. |