First Evidence: Knowledge Management Systems Pay Off

US companies spend almost $3 billion a year on knowledge management systems, which is an astounding number given there has been little proof in academic research that such systems actually pay off. Until now, that is.

KM is used by organizations to capture the knowledge of its workers, everything from the steps needed to recreate a manufacturing process to how often the corporate parking lot should be repaved. The idea is to build a database of information that is readily accessible to all decision makers that builds on the work (and mistakes) of the past.

It is said, for example, that NASA has lost much of the individual know-how of the original moon landing program, because the people who worked on it are long gone and their expertise was not captured.

So, yes, KMS should be beneficial to organizations, but where is the proof? There hasn't been much until a Harvard Business School research team looked to India. Reviewing large-scale, objective data from Indian software developer Wipro, researchers Bradley R. Staats, Melissa A. Valentine, and Amy C. Edmondson found that an organization's captured knowledge can enhance productivity in teams, especially for those that were geographically diverse, relatively low in experience, or performing complex work.

Interestingly, the Harvard Business School researchers did not find that the quality of the team's work was improved (except for dispersed teams). Here are some other takeaways, as reported by HBS Working Knowledge:

• When use of knowledge was concentrated in a small number of team members, efficiency improved but quality declined.
• For more dispersed teams, knowledge use was related to improved quality but not efficiency.
• Team knowledge use was related to improved efficiency and quality for teams completing more complex work.