Knowledge management is a new business strategy. The techniques of this strategy can be traced to the work in the early part of 20th century. In the recent time of 21st century, the base of economy has changed a lot. It has turned into information or knowledge based economy from the ancient industrially based economy at the present years. The recent source of wealth and development in the economic sectors is knowledge rather than the labor, land, property or even the financial capital as like they were in the old industrial based economy system.  And this shifting demands a high quality knowledge management system in any economic system. This will also help us to secure a scope of learning and thus get benefited.  Knowledge is an intangible and dynamic asset which needs to be managed as without such a precious asset no organizations will be able to survive.

What is Knowledge Management?

In the version of “Library Journal” of September 15, 1997 Susan DiMattia and Norman Oder gave a definition of Knowledge Management as a process is a process which helps to blend both the internal and external information of a company and thus helps to acquire an actionable knowledge using the different forms of technological platform. It may be known as the combination of the both explicit management and systematic management of the vital knowledge and also the process of organization, use, creation, diffusion and exploitation. Overall, the systematic process of actively managing and thus purchasing the stores of knowledge in a company or an organization may be termed as knowledge management.

Challenges of Knowledge Management

People mainly face the challenge of getting sufficient information while dealing with knowledge management process. It’s kind of a critical process to get informed about all the clients for a particular company. Social Computing tools encourage the people to interact with the other users and also influence to share their knowledge with them. Thus, Social Computing tools can be considered to be the solutions to overcome such challenge of getting information about the users and making a interconnection between them. Even Social Computing tools represent the third wave for the process of knowledge management as it has multiple range of benefits upon any business company.

Knowledge Management and Social Computing

As earlier said, Social Computing tools have become better solutions for overcoming the challenge of getting information in the process of knowledge management. In earlier days, social networking tools were mainly used by the consumers only. But in recent days these are also emerging in the corporate environments. IDC which is a sister company of CIO’s publisher launched a survey in the year of 2007 and they found an interesting analysis that about 40 percent of very reputed and large companies who have more than 10000 people as their employees use social networking tools as their business purpose. 30% of the companies use different online communities and about 20% of other companies use social bookmarking tools to get the business benefits and make the business more profitable. Relatively smaller companies are less involved in such strategies but they are also trying to adopt them in recent years.

Benefits of Social Computing on Knowledge Management

Different Social Computing tools for examples online social networks or tools used for group communications like blogs, wikis, social media, VOIP, instant messaging, screen sharing like video calling or voice messaging systems, social bookmarking or internet forums are perfect to adopt for the extended version of use of the knowledge management in the practical fields of real life and thus put them to work as important forms of knowledge management. One of the biggest benefits of using these social networks is they easy to use and also intuitive to practice. Moreover, these tools also help to accelerate the business by motivating them and connecting them with each other. It also helps to gather the knowledge from outside of the walls of the company. It is relatively a better way to collaborate the business. Thus using the tools may be a better solution on the field of the knowledge management. Read Benefits of Social Computing.

Significance of Knowledge Management

It has been seen in the experiments that the assets of knowledge have become more important and influencing terms for the companies in recent times than the financial assets and physical assets. Sometimes the knowledge assets are the only way that helps the company to distinguish the quality of the company from its competitor companies and thus also helps to gain some competitive advantages for the companies. The lack of these assets has crucial impacts on the companies’ economical states as the companies suffer financially and economically a lot due to the loss of knowledge. From the experiments of Beazley et al (2002), it has been seen that the loss of knowledge causes an enormous numbers of the employees to change their jobs or retire from the jobs as the productivity cost of the employees increases 85% of the base salary of them due to the mistakes of their replacements, loss of knowledge or lost skills. It is found from the concept of knowledge half cycle that on an average the knowledge reaches obsolescence normally in 500 days. But this time can be much quicker in some other different areas. We have also found from different analysis that there is an overall cost which sits idle due to the lost knowledge related to the production technology and this amount is estimated about $115 billion.  Another surprising example of this phenomenon is the loss of the original source code of computers which was written in the decades of 1950 and produced the Y2K software catastrophe had cost a worldwide business of around $1 trillion according to the research of Petch (1998).

Financial Impacts of Implementing Knowledge Management

If we analyze the business strategies and other criteria of different well reputed and worldwide successful business companies, we will be able to see the impact of implementing the knowledge management process as their business strategy. IBM, Oracle or Cisco measure the intranet value at over about $1 billion. Another example is for BT which is one of the leading telecommunications companies in the UK. Their employee ideas save a net amount of over £100 million. Sodexho’s SuperSleuth also makes a good amount of profit of over $90 million in sales volume by implementing this knowledge management process.