Managing Intellectual Capital.

The KM software market can be segmented into two major categories: KM access software and KM infrastructure tools and technologies. The tools that comprise the KM Infrastructure provide the foundation on which individual and group access to knowledge is built. The ultimate objective of managing knowledge is to capitalize on the intellectual capital, specifically to encourage knowledge transfer and support knowledge sharing and reuse.

The process that drives knowledge management is relatively uncomplicated: capture information, organize it, and distribute it (Martinez 2000). But, as Martinez points out, leveraging expertise requires more than technologies that collect and distribute information. Leveraging captured knowledge is dependent on its actually being used, which is dependent on its incorporation into business practices. The most successful implementations are those that focus on capturing and reusing knowledge associated with a specific business process. Intellectual capital management (ICM) software supports the integration of know-how into business processes and is one of three major categories of KM access software.

Intellectual capital management encompasses a wide range of activities, all of which are designed to help an organization gain maximum advantage from the knowledge that is continuously generated as a result of day-to-day business practices. Recognizing which knowledge is the most valuable is the relatively simple first step. It is more difficult to develop and perfect the ability to capture this "most valuable" knowledge and reuse it as it is being generated. Technology that supports knowledge harvesting in a continuous and somewhat unobtrusive way is now available. This suggests that an opportunity now exists to convert knowledge almost immediately into something that is reusable and sharable.

Repeatable business processes are an important component of an enterprise's structural capital and provide the foundation for developing core capabilities that are difficult for a competitor to replicate. If these processes are improved on an ongoing basis and readily adopted by employees, the value of the corporation's business structure -- and therefore its total value -- increases. ICM software is designed to extract and capture employee know-how related to the successful completion of a business process, thus providing the means to capitalize on practices that have proven efficient and effective.

The application monitors and "documents" process participant activity and then publishes the results, making them available across the enterprise for reuse by others. In this way, ICM software facilitates the transfer of invaluable know-how into corporate policy and procedure and encourages broad awareness and subsequent adherence to successful business practices. The result is increased reliability in the quality of work products. This type of consistency and reliability enhances an organization's relationship with its customers and therefore makes a significant contribution to total corporate value.

Research indicates that using ICM software to capture human capital is challenging but doable (McDonough 2000). Of particular value is the ability to capture know-how as it is being developed. For example, when someone works through a problem or process for the first time, the ICM application automatically populates the enterprise knowledge base with what is essentially knowledge that is available publicly for the first time. In this instance the result is a collection of unique core capabilities that can be shared across the enterprise. It is unlikely that a competitor will have the same combination of human talent and technology; therefore it is equally unlikely that a competitor will have the ability to replicate these unique core capabilities any time soon.

It is obvious that the ability to use technology to transfer expert knowledge across teams and across organizations offers significant benefits. Instead of repeatedly teaching others, experts are at liberty to spend more time pursuing the generation of new knowledge in their particular areas of expertise. Also, with ICM technology the expert's location becomes less critical, and the knowledge can be shared without concern for physical location. Experts or others with consistent or market-leading approaches and methodologies can share their know-how quickly and widely, providing an organization with an advantage that is difficult to imitate. This capability is particularly valuable in today's global marketplace because it allows an organization to capitalize on its "best brains," regardless of time and location.

McDonough suggests that ICM software can be used to support end-user-defined enhancements to nearly any business process, from procurement to sales and operations to new product development (McDonough 2000). This software can positively affect the organization by:

* transforming the contributions of human resources into repeatable processes and reusable content

* reducing the impact of time and resource constraints 

* improving consistency and quality of deliverables

* reducing time to deliver products/services to the market

* enabling resources across the organization to leverage expertise

* facilitating decision making

Because it is a relatively young marketplace, there are only a few ICM software applications available at the moment, but as the application of ICM to specific processes (e.g., marketing automation, professional service automation, product/service introduction, project administration) increases, new products will likely be developed. To help provide a practical understanding of ICM software and its application, following are descriptions of several products and information about how they are being used. These are not intended in any way to be endorsements of specific products or companies but are designed to provide insight into what is otherwise an abstract or intangible concept.

Cerebyte Inc.

A relatively small but significant player in the ICM software marketplace, Cerebyte's (www.cerebyte.com) flagship product Infinos System is designed specifically to enable an organization to harvest and share the best thoughts and ideas of its employees. Infinos acts like a coach, prompting employees to provide input by asking a series of leading questions as the employee works through a business process. The questions are designed to help employees clearly articulate best practices by encouraging them to think, clarify, and record their actions. Cerebyte refers to the resulting "document" as a "Roadmap for Reuse".

Once employee know-how has been harvested in this way, it is ready for reuse by other employees or, in some cases, it can be packaged, branded, and sold to clients. The Infinos System's primary function is to support a decision-making process requiring the expertise of knowledge workers. This application has met with some commercial success as a foundation for organizations that believe they have unique intellectual capital and process knowledge. As businesses recognize how much their intellectual capital is valued by customers, some are using applications such as Cerebyte to profit from their own know-how.

According to a recent article in Computerworld (Songini 2000), Cerebyte has partnered with eight professional services firms ranging from safety training to biosciences consulting that plan to customize Cerebyte's basic Infinos software with their best practices and resell it to customers under private labeling. Songini suggests that using the private-label software to share their expertise with clients, the companies hope to gain new revenue streams beyond the traditional billable hours they charge as consultants.

The Infinos application prompts users to answer questions during various steps in the decision-making process, resulting in a clear and reusable description of a policy or procedure. Resources are assigned to contribute to the procedure being defined or to execute on certain tasks once the definition has been completed. People who have participated in current processes identify bottlenecks in them. Solutions to the bottlenecks are then brainstormed, organized, and implemented when needed. Additionally, the application helps users identify risks and tradeoffs in speed, cost, and quality related to the business process outcome. Since the application can be used to support varied goals, it is useful to examine some of its possibilities (McDonough 2001).

Support of global product rollout, chip design, service practices, sales teams, and work safety practices are just some of the ways the software is applied. The system can capture successful practices by one team and share this procedure with other teams that need to replicate the practice or have a starting point from which they can customize their own solutions. The result is a reduction in repeated mistakes and improvement in productivity. Furthermore, the content generated can be used to support sales efforts as customer expectations are gathered or sold outright as self-service know-how.

Advantiv Inc.

IDC, a Canada-based consulting firm, recently formed a partnership with Advantiv (www.advantiv.com) with the objective of combining IDC's industry expertise and Advantiv's enabling technology in design and development of a tool that supports the decision-making process involved in acquiring and implementing complex technological solutions. Advantiv's Internet-based platform, DecisionDirector(tm), is a decision lifecycle management solution combining software, a proven methodology, and business content in a suite of best practices.

The application is prepopulated with extensive, carefully categorized functionality that specific business process technology (accounts receivable or inventory management, for example) might need. Anyone involved in the business process can participate in identifying the functions that are required, already supported (perhaps by another software application), or not needed. This is an excellent example of how specialized know-how (in this case in-depth knowledge about IT products and their capabilities, some of which was acquired through partnerships with industry analysts and other external sources of expertise) can be captured and reused, saving time and money for an organization and its employees.

Advantiv calls its prepackaged structured knowledge units KnowledgePacks, and they are organized around a four-step decision-making process. KnowledgePacks are essentially collections of best practices that can be used as a starting point in the decision-making process or as a basis for review, discussion, and analysis. When using Decision Director, all of the information, ideas, knowledge, know-how, and commentary that is generated, collected, and analyzed during the decision-making process is captured, cataloged, and stored in a repository. This provides a continuous source of knowledge that remains unaffected by employee turnover or corporate restructuring.

DecisionDirector was developed to support the acquisition of information technology; therefore its modules support needs assessment, requirements definition, RFP/RFI development, vendor RFP/RFI automated response, vendor evaluation, implementation planning, project remediation, and strategic planning. In its effort to acquire an academic information system (AIS), the University of California at Santa Cruz (UCSC) stated its intention to "conduct an investigation of AIS products and to produce a requirements definition that addresses not only product functionality but also the benefits of selecting a mature or an emerging product." To assist them with this complex analytical and decision-making process, UCSC contracted with Advantiv to "both facilitate the requirements definition process and to assist in the analysis of proposals submitted by various vendors."(UCSC 2001)

By working through the major steps in any decision-making process (assess, select, implement, and verify), the Advantiv product supports much broader decisions than those associated with information technology acquisition. Perhaps the biggest advantage is that the product provides an opportunity for subject-matter experts to collaborate on any decision-making process. Because decision process contributors are managed, content captured, and the customized process made available across the organization, valuable insights and knowledge are not wasted.

Kickfire

Kickfire (www.kickfire.com) is another example of how specialized know-how can be captured and reused, this time for the marketing department. KickFire is an online platform providing workflow, collaboration, and integration. Designed specifically to support the marketing professional by tracking, capturing, and reusing best practices, Kickfire provides the foundation for an efficient and effective marketing process.

A typical marketing initiative involves many participants from various disciplines and functional areas and across multiple organizations. It is an environment in which team members may be based in several countries or traveling through multiple time zones, making it difficult to accommodate rapid (instant) communication. Keeping team members focused on a project's goals and timeframes is difficult when all are in a single location and even more so when they are widespread. All in all, getting products to market faster than competitors is a major challenge. The process is collaborative and the activities often run concurrently; reaching a satisfactory conclusion may involve many iterations.

Kickfire is designed to support the marketing process by automating coordination of activities and individuals involved. The objective is to improve overall performance by maximizing contributions. KickFire supports collaboration among team members because it has a single, globally accessible source for messaging, schedules, expert resources, and best practices. This also provides the foundation needed for improved consistency and quality.

KickFire's core strength resides in five key areas of functionality:

* Effective project management -- KickFire allows tasks to be prioritized and delegated to any team member. Because it is a Web-based application, it is accessible to the entire team regardless of their located, and every team member can check project status at anytime from anywhere. "Best practices" can be stored for access and reuse, thereby minimizing lost time and repeated duplication of effort.

* Flexible collaboration -- KickFire's group contact manager provides instant access to contact information for all team members. The information contained in the contact database can be synchronized with PDAs and desktop applications. Real-time communication is supported through KickFire's secure chat room, which can also be used for group viewing or modification of documents and presentations, group meetings, product demonstrations, training programs, etc. All chat room communication can be saved for future reference or for team members who were unable to participate.

* Access to knowledge -- KickFire has a fully searchable online library and reference notes can be added to files. Because it continuously builds project records, KickFire helps to translate tacit knowledge into explicit knowledge, therefore making human capital a component of the organization's structural and relationship capital. If KickFire is integrated with other marketing management and customer relationship management applications, it can be used to leverage the knowledge developed and captured in a broad range of customer-, marketing-, and product-related processes.

* Efficient communication -- KickFire's built-in messaging service provides an environment wherein the entire team can brainstorm, strategize, and share information. Like most other e-mail systems, it provides public, private, or group discussions, but unlike e-mail, the ongoing electronic conversation is automatically "threaded" so every comment appears in the order it is posted.

The retention and reuse of intellectual capital in the marketing process could be the critical element needed to bring a product to market quickly and cost effectively.

Niku Corp.

Similar to the other vendors discussed herein, Niku (www.niku.com) chose to develop a product (or in Niku's case a suite of seven products) that uses ICM to support a specific type of business or process. This suite of products supports the professional services organization (i.e., consulting, legal, advertising/ public relations, architecture/engineering firms). A recent article in Computerworld reported that Shearman & Stirling, a New York law firm, expects eNiku to help it integrate its billing, marketing, contact management, and time and expense processes into one system (Songini 2000). This will help the firm manage and leverage its resources across 15 worldwide locations.

In addition to its established customer base of professional services firms, Niku is targeting its products to other industry sectors such as health care, government, and financial services. Niku provides an application that helps the user:

* capture intellectual capital as it is created

* share information with every individual across the enterprise

* retrieve any file, from documents to multimedia, via an easy-to-use search engine

* link files to projects, teams, partners, or customers

* access information anytime, anywhere, via a browser 

Niku products are available for enterprises, individuals, marketplaces, and extranets (extended enterprise) environments. There are four enterprise applications:

* eNiku streamlines and automates the core business processes associated with running any professional services organization: resource management, practice management, engagement or project management, time and expense management, business development, and intellectual capital management.

* xNiku uses extranet capabilities to extend an organization's reach to include partners, customers, and suppliers. It supports the development of online communities and virtual project teams. As professional services firms (and project-oriented groups in any organization) become increasingly global, applications like xNiku will aid in managing complex projects and processes across widely dispersed groups and geographies. From an intellectual capital management perspective, it is important to capture and leverage knowledge as it is generated regardless of geographical location. It is equally important for project teams to have access so that the best possible opportunity for reuse is created.

* Niku Portfolio Manager is a suite of project management tools designed to accelerate strategic decision making. Professional services organizations must plan ahead with full knowledge of current resource commitments, future requirements, and the capabilities needed to satisfy them.

* Niku Revenue Manager is a project accounting application that allows users to capture, manage, and report time spent on projects and ongoing expenses. It provides capabilities for project and practice accounting, as well as management reporting for project budgets, external contractors, cost estimates, departmental charges, and invoicing.

Conclusion

Knowledge management is increasing in scope. As we struggle to understand and implement basic KM systems, leading organizations have already moved ahead and are capitalizing on the enormous value created by employees. Although the functionality mentioned in the product snapshots in this column may not appear directly related to records and information management (RIM), further scrutiny reveals that such functionality is relevant.

Discussions about moving RIM into the business mainstream occur regularly at conferences, seminars, ARMA chapter meetings, and on other occasions. As RIM professionals become more involved in managing (i.e., leveraging, taking advantage of, organizing) an organization's intellectual capital, there will be little doubt as to ICM products' importance.

The New Economy has produced globally dispersed teams that need to collaborate, communicate, and cooperate on any given project at any given time. At the same time, schedules have become tighter, the need to add new team members on the fly has become commonplace, and the demand for innovation and quality is greater than ever before. Tools that can help to satisfy these demands are absolutely essential, as are the people who understand how to take advantage of the functionality those tools offer.

REFERENCES

Martinez, Nathaniel. "Opening the Doors to Corporate Knowledge: The Importance of Enterprise Portals in Knowledge Management" IDC Bulletin #LG10G (October 2000).

McDonough, Brian. "The Intellectual Capital Management Software Market" IDC Bulletin #22657 (July 2000).

--. "KickFire: Managing Intellectual Capital and Enhancing Collaboration for the Marketing Organization" IDC Bulletin #23365 (December 2000).

Songini, Marc L.. "Service Firms Track Staff, Projects Using Automation" Computerworld. 25 September 2000.

University of California at Santa Cruz. January 2001 Project Status. Available at http://oasas.ucsc.edu/ais/index.html (accessed 28 February 2001).

Editor's Note: The companies and products named in this article are provided as examples by the author. Their appearance here does not constitute endorsement by ARMA International.

Jan Duffy is vice president, solutions research with IDC Canada, an information technology research and publishing company. She is a business improvement professional with a special interest in designing total systems -- people, processes, and technology -- to support knowledge work and knowledge workers. Duffy is a frequently published author and presenter on the topic of knowledge management. The author may be contacted at [e-mail]