Knowledge Management (KM) and Process Performance Implications for Action

Fred Nickols 2000

“How does Knowledge Management (KM) improve performance? In particular, how does it improve financial and operational (process) performance? This is the question that matters most to many senior managers and executives. They need answers — and more than one — that will justify and reinforce the importance of integrating and institutionalizing KM in their organizations.

To be of practical value, KM must affect what is done, how it is done, and how well it is done. Clearly, then, one critical link between KM and business results is through business processes. The impact of KM on key business results might well be the greatest through its potential for improving the performance of business processes. This suggests that the design or redesign of business processes should factor in an understanding of where and how knowledge plays a role in the performance of the process. In turn, this is accomplished by identifying the knowledge needed to make the decisions or take the actions that make up the process, as well as addressing considerations related to the knowledge generated by those decisions and actions (e.g., capture and distribution to name but two).

This paper outlines some of what I see as the basic fit between KM and business processes. It begins with a framework for thinking about processes and then considers how KM initiatives might connect with a company’s processes. It ends with a review of some basic implications for action.

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