The Growing Importance of KM and BI - David Goldstein

KMA has been in the business of building knowledge management (KM) and business intelligence (BI) solutions for over ten years. In the past few months, we have seen even more IT executives putting knowledge management and business intelligence solutions at the top of their lists of business-critical technologies. This view is reinforced in a June 2005 research report from The Economist.

The survey of 122 European senior executives reinforces the priority that strategic firms are placing on KM solutions. Here are some highlights:

You can then assess your situation using the following diagram:

• Global executives ranked BI/KM solutions higher in strategic importance over the next three years than any other IT initiative including CRM, ERP and supply chain integration. In fact, the failure of firms to find effective ways to prioritize information is cited as the biggest impediment to good decision-making by 55% of executives.
  
  
• The two most important benefits for KM/BI solutions are improved customer relationships and better visibility into internal processes.

These findings reinforce my own observations from meetings with IT and line managers. I have observed a strong need for dashboards and other reporting systems that extract customer data, and process performance data to improve management decision-making. Additionally, a notable improvement in client relationships and more precise insight into client’s needs have proven to be a natural by-product of effective knowledge management.

Of course, this need has existed for at least 50 years. Two technological changes have taken place over the past few years that make it more likely that organizations will move forward with dashboards and other BI systems:

1. The data to feed these systems are readily available, in the CRM and ERP that are deployed in most organizations.
   
   
2. The tools to extract and display data are easier to use and less expensive. These include OLAP cubes, reporting engines, corporate portals and custom dashboard web parts.

The report also highlights the demand for more traditional KM systems that track competitive intelligence and employee's experiential knowledge. At the same time, it highlights some of the organizational barriers to the successful implementation of KM and BI systems.

This well-written article continues to reinforce and support the fact that knowledge management and business intelligence technology is critical to and lies at the heart of the successful achievement of firms’ strategic goals.