KNOWLEDGE MANAGEMENT: TAMING THE INFO MONSTER

Now, coping with data overload--both inside and outside the company--is a matter of survival

SURVIVING THE INTERNET Click for June 22, 1998 issue







In the Internet age, the world's great information storehouses--France's Bibliotheque Nationale, the U.S. Library of Congress, Taiwan's National Central Library--are just mouse clicks away. The patent describing the world's first portable computer, the original recipe for sugarless chewing gum, the formula for the vaccine against polio--are all quickly accessible in ways unimaginable just a few years ago.

But what of it? Search the World Wide Web using the AltaVista engine for information about DNA, and the first 10 of more than a million listings include a perfume, a testing service, and a chipmaker--in addition to documents on the genetic blueprint. Unvetted, this info-gusher can deliver too much information to be useful. Yet in the new Information Economy, where corporate survival requires faster and better thinking, companies can't afford to drown in data--either their own or what's available on the Internet.

Increasingly, profits will stem from how quickly--and well--companies can sort through and analyze what pours over their Net-streams. In the past, labor and capital determined profits. Now, knowhow is the profit engine--and the Internet sends it into overdrive.

To be sure, business has always been about acquiring and using information, all the way back to 1850 when Paul Julius Reuter, founder of Reuters News Service, started using pigeons to deliver information faster than competitors. But the difference today is the Net. Like never before, the Internet enables companies to harness information and capitalize on what they know to boost their corporate IQ and get a leg up on the competition. ''Getting a handle on information was always a challenge for companies,'' says Michael Sullivan-Trainor, vice-president of Internet research for International Data Corp. ''But with the Internet, companies now have a means by which to control this information and make it work for them.''

TRENDSPOTTING. Already, corporations from General Electric (GE) to Manpower Inc. (MAN) are looking at ways to channel the Internet's vast resources to cut costs, build profit, spot market trends early, swap manufacturing tips with customers and suppliers, and speed new products to market.

What's involved? For many companies, no less than a sweeping change in corporate culture. So-called knowledge management means tearing down walls between departments and individuals, inside and outside the company. For starters, that might mean something as simple as conducting in-house ''audits'' to pinpoint who knows what inside the company and posting it on the company's intranet.

But that's the easy stuff. The really hard part is convincing employees to share what they know rather than horde knowledge to protect their standing in the organization. Says Jack Welch, chairman of industrial giant General Electric Co.: ''An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive business advantage.''

Doing nothing, though, won't be an option. Stragglers won't just get overwhelmed. In the Net knowledge game, they will get overpowered by rivals who can more quickly turn what they know into profit.

For some companies, the exercise is already starting to pay off. At Texas Instruments Inc., managers around the world were asked to use the Net to devise, share, and apply new ways to boost efficiency. It became a wellspring of new ideas, enabling TI to hike output and avert the need to build two new chip plants--a move that would have cost more than $2 billion.

''UNNATURAL ACT.'' Meanwhile, Cadence Design Systems Inc. (CDN), a San Jose-based supplier of automated design software, was able to get new sales representatives up to speed and out into the field two to four months faster. How? By creating an in-house Web site that included a step-by-step guide through the sales process, product specs, and profiles of potential and existing customers. Market researcher International Data Corp. estimates the company could save up to $7.6 million over three years.

But knowledge management isn't just for high-tech companies.
Temporary employment agency Manpower currently makes free computer-based training courses available on its Web site. The agency will train potential recruits if they note those courses in resumes. The idea: Manpower cultivates talent, which can be called upon to fill client needs. Says Linda Muchisky, a senior consultant at American Productivity & Quality Center: ''The walls and fences restricting who can access corporate knowledge are coming down.''

In the Information Economy, such sharing is the new mantra. At GE, for instance, Welch says he had to quash the notion of a ''GE way'' as the best way to tackle a problem. Now, GE emphasizes a ''boundaryless learning culture'' that takes good ideas from anyone, regardless of their position or standing, inside and outside the company. Similarly, TI awards the Not-Invented-Here-But-I-Did-It-Anyway prize to encourage out-of-the-box thinking and information-sharing inside the company. And, to ensure that plant managers chip in, TI ties part of its performance bonus to overall manufacturing improvements. ''Knowledge-sharing is an unnatural act in most organizations,'' says Andrew L. Michuda Jr., CEO of Teltech Resource Network Corp., a consulting firm. ''Changing employee behavior is 90% of the challenge.''

Some might even say it's 99%. At AT&T (T), for example, middle management at first felt threatened by the move to put a lot more information online. So Patrice Hatley, who directs the company's knowledge-management initiative, set up training sessions with managers to stress how the Net would not become a ''tool that would replace them.'' In the past, all customer information was handled by supervisors. Now, AT&T puts some of that customer information online, freeing up supervisors to help solve tougher problems. ''Putting information in more people's hands is a scary thought to some folks and incredibly exciting to others,'' she says. Hatley also sought to build teamwork and Net proficiency by staging ''scavenger hunts'' for customer service data, awarding a free movie ticket or a free dinner at a local restaurant to workers who found needed information the fastest.

How to do more? Some firms are turning to new software for help. Mining information about customers on the Net is becoming the hottest trend in E-commerce. But now, the same kind of technology that Amazon.com uses to keep track of its customers' tastes in books is being developed for applications inside companies such as the Baan Co. (BAANF) and Dell Computer (DELL). Such software, experts say, can be used to organize business information according to the needs of individual workers, clients, and outside suppliers.

Don't have time to click through dozens of Web pages to find the straight dope? One-To-One Knowledge from BroadVision Inc. in Redwood City, Calif., and Smart DNA from Smart Technologies Inc. in Austin, Tex., is software that can create profiles of customers, suppliers, and business partners by analyzing their movements on a Web site. Companies such as Internet Auction, Baan, Compaq, and Motorola already are using such products to get a better handle on their customers.

The lesson: Companies shouldn't wait too long to dive in. In an era where information is a commodity, the companies that prosper will be those that can use the Net to harness their know-how to competitive advantage. For them, today's Information Glut will become tomorrow's most valuable resource.

By Gary McWilliams in Houston, with Marcia Stepanek in New York



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