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Knowledge Management System

Muhammad Nouman Virk (Date: 08.05.2013)

The role of knowledge management systems is very important in meeting organizational goals, as it involves advance computerized technologies, provides innovativeness, competitiveness and effective decision making to a company. The effectiveness of decisions increases through using knowledge management systems. The further benefits of knowledge management systems are; adding value, innovativeness, problem solving, and competitiveness and managing dynamic uncertainty of the business environment. Last, the knowledge management systems also help in improving organizational processes that overall helps in achieving goals of the organization.

In today’s business world, the knowledge is considered as “resource” into the organization and considered as an important resource that leads the organization towards success. The knowledge management is a concept in which organization consciously and comprehensively gathers, organizes shares and analyses its knowledge in terms of resources, people’s skills and documents (Rouse, 2006) (Appendix 2).  In an organization, the knowledge can be several forms such as, explicit knowledge, tactical knowledge, technological knowledge and market knowledge (Krstić and Petrovic, 2012, p93). The success of knowledge is mainly hidden into best creation, management and usage of information that is now handled by the computerized knowledge management system.

A knowledge management system is a computerized system of managing information. A knowledge management system consists of a complex combination of software and hardware. The development of knowledge management system is based upon system development life cycle, IT infrastructure and knowledge management infrastructure in order to meet the requirement of the organization. The components of knowledge management system are; (a) repositories (databases), (b) collaborative platforms (collaboration agents), (c) Networks (communication networks) and culture (sharing and collaboration) (C.S. and P.A., 2011, p7). A knowledge management system is used into business softwares such as, inventory management, business administration, accounting information system, marketing information system human resource information system and management information system (, 2010). The role of knowledge management system is very important for meeting organizational goals and achieving organizational success.

In practices, the knowledge management systems consolidates the information and knowledge, held by every employee implicitly and explicitly and utilizes it for decision making that improves the effectiveness of decision making (Shannak, 2010). The role of knowledge management system is also vital in enterprises innovativeness and achieving competitive advantage. One research by Krstić and Petrovic (2012, p93) states that an ogrnaiztaion’s competitiveness depends upon how much faster it introduces new and innovative products or services for its customers, while the innovativeness of an organization depends upon how the company innovates the new procedures and tactics, different from its competitors. The role of  knowledge management system can be described as important for organizational success because it provides innovativness and competitiveness to the organization, because the knowledge management system is based upon the knowledge management of the company, as meta resource, that increases the innovatviness capacity of an organization that also provides competitiveness and ultimate success (Krstić and Petrovic, 2012).

The role of knowledge management system is very important for making strategic business decisions. General purpose of knowledge management system is to assist the managers in decision making through providing valuable information as per requirement. Before the introduction of knowledge management systems, the decision making is regular in organizations, but after the knowledge management systems has increased the effectiveness of decisions. The Shannak (2010) presents the role of knowledge management systems in increasing effectiveness of strategic decisions in Jordanian organizations. There are five important factors, improves the effectiveness of decisions during use of knowledge management system. (a) capability of individuals, (b) trust of decision maker, (c) acceptance of decision maker, (d) availability of required technologies and (e) coordination between departments of organization. These factors help in improving the effectiveness of decisions of organization.

In large organizations, the importance of knowledge management system is strategic, because the knowledge, as a resource, is considered as tool of growth, adding value, innovativeness, problem solving, and competitiveness and managing dynamic uncertainty of the business environment (Krstić and Petrovic, 2012, p95). The Leung et al., (2012, p302) describes the example of the Food Assesstance Project for assessing the effectiveness of knowledge management systems in social services. The results of research have confirmed that using well developed knowledge management system generates productivity at all hierarchal levels of organization.

According to Thomas (2011), the knowledge management systems helps in improving performance of business processes. The major support department of an organization such as, information technology, human resource management and business strategy can be benefited from the effectiveness of good knowledge management systems. The Watson and Hewett (2006, p141) and also confirms the impact of knowledge management systems on the competitiveness of organization through knowledge creation, knowledge transfer and resource of knowledge about customers, employees and markets. In short, the knowledge management system is quite helpful for organizations in meeting their goals.

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