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Knowledge Management is the wave of the future. Know how knowledge management can impact your business performance
The combined knowledge of an organization’s employees is one of the most valuable assets and effective management of this asset can be a crucial factor for success.
Nearly 75% of companies estimate that knowledge management can increase productivity by up to 40% and yet, in many cases, company leaders tend to overlook it, a mistake that causes businesses to lose more than $31 billion annually.
Knowledge management is the procedure of capturing and managing the information and knowledge of an organization, and benefiting from it through sharing, innovating, reusing, collaborating, and learning.
Below, we’re discussing 9 ways in which knowledge management and the use of effective knowledge management software can impact your business and improve your business performance.
Recommended: 8 Ways Organisations Can Share Information Better
1. Easy Access to Information
Knowledge management makes it easier to find the information you need or to locate the people who hold that information. This, in turn, increases productivity and reduces the tendency to reinvent the wheel.
By capturing knowledge in a knowledge management software, you allow easy accessibility to knowledge information for your current and future staff members, even if some of them decide to leave your organization at some point. This is especially valuable in high-turnover departments, such as sales and customer service.
With the right technology, knowledge can also be made easily accessible on mobile devices, making it possible for your employees to utilize it from wherever they are and at any time. By giving all employees access to relevant knowledge, you can serve the entire company’s needs, even if your team members work from multiple locations.
Image source: Pixabay
2. Better Communication
Nowadays, we all need information in order to do our jobs effectively, but at the same time, information overload from a variety of sources can easily overwhelm us and decrease our productivity.
Knowledge management allows you to get information that’s timely, targeted, and useful without having to dig through hundreds of emails, reading through dozens of pages of printed material, or going through your Slack messages.
By creating more opportunities for employees to communicate, teams can remain up-to-date on the latest plans, tasks, and projects. A knowledge management system allows them to share information about what they are working on, how they are doing it, and whether there are opportunities for collaboration.
Information sharing, networking, and cooperation help generate strong and healthy relationships and improve communication amongst different teams and departments.
3. Improved Decision-Making
By conveying relevant and applicable information through search, subscription, support, structure, and syndication, a knowledge management system provides a foundation for making better business decisions.
The above-mentioned practices and cooperation carry the power of varied experience and diverse opinions, which can contribute different perspectives, and the reuse of knowledge allows decisions to be based on large sample sizes, practical skills, and past experience.
4. Preservation of Valuable Knowledge
Even though the stats cited in this article’s intro confirmed the importance of knowledge for the success of a company, knowledge is frequently difficult to access or undocumented, which means that it can be easily lost.
Employees retire, quit, or take sick leaves, taking with them valuable knowledge. In one survey, over 50% of executive-level respondents said that losing valuable knowledge as a result of losing employees can cost from $50k to almost $300k per employee.
Even if these employees take some time to train their successors before leaving, they’re never able to pass on everything they know because there isn’t enough time or simply because some knowledge is tacit and can be difficult to communicate. Furthermore, about 45% of employees are poor at transferring knowledge.
On the other hand, computer hard drives can easily fail, get stolen, or lost, wiping out any locally stored knowledge. What’s more, this locally stored knowledge isn’t available to others who might need it.
A good knowledge management system makes the company's knowledge accurate and more accessible. This is especially important for businesses nowadays because teams are much more dispersed. When you work with remote employees or have multiple branches, the need for a knowledge distribution system increases exponentially.
Image source: Pixabay
5. Easy to Scale and Update
Unlike traditional ways for training employees, such as classroom training sessions or one-on-one mentoring, knowledge management systems enable businesses to coach a large number of employees at the same time.
By providing team members with online access to the knowledge they need, you can serve the needs of the entire organization, even if employees work remotely from several varied locations.
In addition, knowledge management offers companies a competitive benefit. Because knowledge originates from your employees, it’s in touch with the actual conditions on the market. This knowledge can also be updated as the conditions alter, which means it’s much more responsive and agile than conservative training methods, which might take weeks or even months to update.
6. Benefiting From Past Experience and Continuous Learning
Having an effective knowledge management system allows you to spend less time recreating existing knowledge and instead, benefit from the individual knowledge and skills of each team member.
Currently, employees are spending 30% of their time looking for or recreating knowledge that already exists. When information is accurate and easy to access, the need to interrupt coworkers with support tickets, chats, and emails is significantly reduced. Employees will spend less time answering repetitive questions and be able to focus on more important tasks.
Knowledge management also allows every employee to benefit from the expertise of other employees. When team members are not sharing information, they are sure to repeat the same mistakes over and over again. This can be easily avoided when the lessons learned from past failures and mistakes are accessible to everyone.
This is especially important in large companies. As the number of employees increases, it becomes more complicated for each employee to know about everyone else or take advantage of their experience. Knowing what others know can be helpful since you can apply their past experience to your current requirements.
Finally, a good knowledge management system guides employees to find answers and solutions to issues on their own rather than bring the problem up to a help desk or supervisor. This helps form a continuous learning environment and boost analytical and creative thinking in your workforce.
7. Lowered Costs
Companies can save money when they allow their employees to produce and share knowledge through efficient knowledge management software. These systems can help you reduce the costs of centralized learning and development and diminish your reliance on third-party training providers.
Onboarding a new employee can be quite expensive. In order to train the new members of the team, your existing employees will need to temporarily abandon their regular tasks and spend some time with the newbie.
According to a 2014 study, the training expenditure for a small or medium-sized business is from $819 to $1,238 per employee.
If your company has high churn rates, this can mean you’ll be losing huge amounts of money. By having knowledge management software, you empower new employees to learn at their own pace and save money.
8. Standardized Procedures
Knowledge management prevents the information from getting distorted as a result of communication in silos or word-of-mouth. When processes are well-documented and shared, it is easy to ensure that everyone is following standardized procedures.
This allows employees to learn how things are done, leads to predictable and high-quality results, and enables big companies to be consistent in how work is performed. By providing a process for storing, creating, sharing, and using standardized procedures and processes employees will be able to use them routinely.
9. Improved Customer Satisfaction
Your employees need to be able to provide fast and efficient customer service that the customers expect. An effective knowledge management system is a valuable tool that empowers employees to find the answers to a wide range of customer queries, even on matters that they might not have encountered before.
Why is this so important? The ability to provide timely and efficient customer service is the best way to distinguish yourself from the competition. A study conducted by Salesforce found that more than 75% of millennial customers are prepared to move their business somewhere else after one poor customer service experience.
Your best bet for keeping customers is to allow them to help themselves with a knowledge management system. And it’s not just millennials; according to Forbes, 40% of customers would rather skip human contact altogether in favor of self-service.
Every company depends on effective information and knowledge sharing. Sharing best practices and past experiences, communicating rules and procedures, and onboarding employees are all vital for any business that wants to increase its productivity and keep growing.
Your company needs to make sure that information is flowing smoothly across the organization and that it is easy to access by everyone, while at the same time capturing shared knowledge in one central location.
Hopefully, this article helped you to better understand the importance of knowledge management and how it affects your business, so now you can make a more informed decision on which knowledge management system is the best for your organization.
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