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 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, prioritize and analyze corporate data.
The key findings of the report include:
- Too much information impedes decision-making--over half (55%) of executives say that IT's failure to prioritize 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 behaviors are the overwhelming focus for improving the quality of information in large organizations 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 analyze 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 organizations are organizational, 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.