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What Is Knowledge Management?

What is knowledge management (KM), and why is it essential for businesses? Learn what KM is, its benefits, and why organizations should prioritize it.

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Benjamin Franklin once said, “an investment in knowledge pays the best interest.” Today, his idea is still as powerful as it was centuries ago. 

Investing in knowledge isn’t just about collecting information. It’s mostly about putting it to work.

Enter knowledge management.

Knowledge management (KM) is a comprehensive approach to discovering, processing, handling, and retaining information within an organization. As the volume of information grows exponentially, leaving it unmanaged can lead to serious errors and revenue loss.

By developing an effective knowledge management strategy, a company makes the best use of its resources, streamlines day-to-day operations, increases employee satisfaction, cuts costs, and much more.

Since the volume and quality of knowledge continue to grow, having a clear knowledge management strategy is no longer optional. It’s an essential part of your company’s success. Let’s take a closer look at knowledge management types, benefits, and essential tools.

3 Primary Types of Knowledge

To take advantage of your company’s collective knowledge and information, you must design effective KM strategies. From changing organizational culture to implementing knowledge management software, KM is an ongoing process. With the right approach, you can reap significant benefits and an impressive ROI.  

Faster Retrieval of Information

The information you collect is only as good as its availability. An effective knowledge base provides fast access to the necessary information for all authorized users.

According to McKinsey, employees spend almost 20% of their workweek searching for information. High-quality KM practices address this problem, speed up the retrieval, and allow employees to focus on high-impact tasks.  

Improved Communication Within and Across Teams

Regardless of your company’s size, good communication between teams is a common challenge. According to a recent survey, companies cite an average loss of $62.4 million a year due to poor communication to and between employees.

Knowledge management gives your workforce new communication tools by:

  • Providing access to organizational knowledge in real time
  • Encouraging knowledge sharing
  • Organizing information and making it searchable
  • Simplifying onboarding

Streamlined communications have a direct effect on the company’s operational efficiency while boosting employee engagement.

Easier Document Management

KM allows you to organize documents according to your company’s needs. This results in fast retrieval, fewer errors, better document quality, and improved tracking. Even if you already have a document management system, KM strategies can help streamline it.

Enhanced Decision-Making

An effective decision depends on the information that supports it. Knowledge management allows you to provide the most relevant information to decision-makers in real-time. Managers and employees with quick access to digital assets are fully armed to make revenue-generating decisions.

Greater Organizational Efficiency

Knowledge management improves employee efficiency, which in turn has a direct impact on organizational efficiency. It provides easy access to data and information, improves collaboration, encourages innovation, and reduces errors.

Higher Engagement

Engagement is the driving force behind company success. Unfortunately, only about a third American workforce is engaged. By boosting employee engagement, KM improves the company’s bottom line. 

According to Gallup, improvements in employee engagement can lead to an 18% increase in productivity and a 23% increase in profitability.

Knowledge Management Process

Knowledge management is an ongoing process that has three main stages. It’s important to design KM strategies that allow these stages to coexist and work together in real-time.

Knowledge Creation

The ability to generate high-quality knowledge is what differentiates industry leaders from laggards. Knowledge creation is the process of gathering, generating, and recording all three types of information.

Subject matter experts and other employees should understand the importance of knowledge creation and have all the tools necessary to document their knowledge in the flow of work.

Knowledge Storage & Organization

Making sure that knowledge is organized simplifies access, retrieval, and implementation. You need to design knowledge management strategies with clear storage and organization guidelines.

High-quality knowledge management software can assist with storage and organization by helping you create a searchable and fully configurable knowledge base.

Knowledge Sharing

Knowledge sharing is the backbone of KM since it allows employees to benefit from their peers’ expertise and find the information they need, the moment they need it..  To ensure its success, it’s important to implement a knowledge-sharing culture. 

Giving employees the necessary tools for knowledge sharing and explaining the importance of the process is essential for successful knowledge management.

Types of Information Stored in Knowledge Management Software

Knowledge management software allows you to store, organize, and access knowledge in the most effective manner necessary for your company. The specific information you store in your KM platform will depend on your business, but common types include:

  • Technical specifications and manuals – you can store all relevant documentation for products, services, or processes in order to streamline sales and improve decision-making.
  • Employee training and onboarding materials – you can speed up and simplify onboarding by providing access to pertinent information, such as standard operating procedures and guidelines.
  • Corporate policies on employee conduct – you can provide this information to new employees to simplify and speed up onboarding while existing employees can have the relevant information at their fingertips.
  • Questions and answers – you can use a Q&A format to encourage knowledge sharing between employees.
  • Research reports and presentations – you can improve the navigation of such reports and presentations to make them more accessible.
  • Video walkthroughs or interviews – you can upload all types of content formats and make them searchable.

Types of Knowledge Management Tools

The choice of knowledge management tools is the main factor contributing to the success of your KM strategies. The type of software you choose depends on your business requirements. 

Knowledge Base

A knowledge base is a modern comprehensive knowledge management tool that allows you to store, organize, and access all organizational information in the most convenient way possible.

Essentially, it’s an accessible online library with features that encourage employees to share and engage with knowledge. A well-designed knowledge base contributes to successful decision-making, employee education, effective onboarding, improved productivity, and much more.

Unlike simpler knowledge management tools, a knowledge base doesn’t just focus on storing knowledge: it focuses on making it accessible and actionable for the people who need it.

Document Management Systems

Document management systems allow you to store, view, and organize documents on local or remote servers.

These systems can organize your documents according to file types, security levels, size, data type, and other parameters. Essentially, it’s a digital filing system.

Record Management Systems

Record management systems allow you to manage all company records throughout their lifecycle. In most cases, records are documents generated during a business transaction.

Unlike documents, records usually can’t be edited or adjusted. The management process is limited to storing and organizing them properly for easy access.

Today, companies develop electronic record management strategies to ensure safety and accessibility. To do that, they use record management software for storage and filing.

Content Management Systems

Content management systems (CMSs) allow you to create, edit, and organize content on your website. While CMSs are highly useful for website building, SEO, brand awareness, and other digital marketing strategies, they only focus on a specific type of information.

Usually, this is customer-facing content that doesn’t always help internal information accessibility and management.

Knowledge management is a comprehensive approach to handling information, tweaking its accessibility, and maximizing its efficiency. With the right KM system in place, it’s possible to achieve many business goals, including higher operation efficiency, greater employee engagement, and better decision-making.