First Evidence: Knowledge Management Systems Pay Off

Last Updated Oct 28, 2010 2:27 PM EDT

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.
(Image courtesy Flickr user epublicist, CC 2.0)
  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.