Driving Forces of Knowledge Management

Knowledge management is important for organizations because they must effectively respond to multiple challenges originating from both outside and inside the organization. These challenges include: increasing domain complexity, accelerating market volatility, intensified speed of responsiveness, diminishing individual experience, convergence of product and service, and the ubiquitous connectivity.

Effective management of valuable knowledge enables continuous value innovation. Innovative products and services come from innovative people working together in a knowlege-friendly environment. Such an environment involves visionary leadership, proactive and sensitive management, and powerful tools. The famous 80/20 principle works here: 80% of the efforts in knowledge management is organizational and people-related measures and 20% is technology. The significance of technology is determined by the size factors such as numbers of collaborating locations and people and other knowledge components. The larger the organization, the higher the importance of the technology.