Stage 1: Building the Business Case for “push-pull KMS”
I started writing this article – now a Blog Post – series in fall 2000 taking issue with what I had been reading about KMS in journals and popular magazines and hearing about at conferences. The nature of some of the KMS efforts worried me in that it seems out of control. It feels like TQM all over again, where we went prematurely after continuous improvements everywhere, without regard to return on investment (ROI).
Note: This Post is almost the same as the 2000 article. Some language and graphics have been updated.
See Part 1 from last Sunday – here.
Knowledge Management Systems
KMS is typically defined as something along the lines of knowledge objects captured/maintained/ administered to leverage the enterprise’s explicit and tacit knowledge. One scary thing is that there is a lot of press about how to better enable subject matter experts (SMEs) to create these knowledge objects that will be stored in a knowledge repository (an “e” warehouse of sorts).
My view of KMS is that the only content to be placed in any knowledge repository should be deliberately aimed at key target audiences, but then stored in such a manner to enable other target audiences to access and utilize it.
I label this push-pull KMS.
Push-KMS is when enterprise leaders deliberately target certain processes and target audiences for KMS treatment. Then their needs are addressed, and knowledge products are produced (using good ISD methods) and deployed (pushed) to them. These knowledge products can include
- Best practices
- Lessons learned
- Job aids/EPSS
- Example plans
- Example documents
The goal for providing the knowledge products is to help performers avoid/eliminate/reduce “reinventing the wheel” or “starting from ground zero” for each new performance effort. That makes business sense to us!
Pull-KMS is when other, nonkey target audiences tap into the knowledge repository and pull the content to meet their needs. Note that not all of their needs will be met, because they weren’t “targeted” by the enterprise leadership.
KMS should ultimately serve the shareholders, or why bother? If it doesn’t positively affect ROI, economic value-added (EVA), and the bottom line, then don’t do it.
One way to positively affect the ROI and EVA equations is to better target the KMS efforts to ensure an ROI for every component resourced, developed or acquired and then administrated and deployed, and then maintained, in a forever cycle, until someone pulls the plug—on the one piece of knowledge or on the whole system.
And that might happen if and when it is determined that the KMS doesn’t have a sufficient return or enough economic value-added to warrant continuing. It either pays its way, or it’s stopped.
Overview of “Building the Business Case”
The business case is a sales document. Depending on the ultimate reviewers’ propensity for reading deep narratives, or tables of data, or looking at pretty charts and diagrams, you need to get across a credible story about how KMS can return more than it takes and that the costs for not doing anything/something are also significant.
The goal of KMS has to be to protect and improve the enterprise, or why bother? Why should the enterprise leadership want to bother? If you can’t answer that, you won’t get anywhere . . . hopefully, for the sake of the shareholders.
We’ll start with a review of the bottom-line considerations for KMS: financial returns on investments and economic value-added.
Financial Returns on Investments and Economic Value-Added
After all, you wouldn’t spend your own money on a bad investment, one with little or no return. Nor would you spend it for “reasonable returns” forecasted that just require way too many stars to align perfectly, or that have too many uncontrollable facets that could end up being quite problematic.
So how do you talk to the people who represent the owners whose money we are talking about? You talk to them in the common language of business. How to “spend a buck and make 12 back.” That’s what they want to hear. If you don’t tell them that, then you must expect that they’ll just have to trust you.
If you can, talk first about the costs of nonconformance (CONC). These are the costs for being screwed up, or for not being as perfect as your competitors are currently or will be in the future. What kinds of costs could be saved? What kinds of revenues would be enhanced? How much for each?
Then present the costs of conformance (COC). These are the costs to get straightened up, or more perfect (in a world statistically devoid of zero-defects) than your competitors—either now or later.
If you gave them the COC first, that would probably scare them! But then if you can show them an even scarier CONC, they’ll have no choice but to protect the business. They’ll have to go for the gold ring. But you don’t get gold by chasing every KMS topic, template, and performance aid possible. You get the ROI by targeting short- and long-term ROI and EVA where you consider both first costs and life-cycle costs.
Enterprise Politics and the KMS Governance Board
The old saw is “if you can’t beat ’em, join ’em.”
Like many TQM efforts, we suppose many KMS efforts won’t get too far off the drawing board before being quashed by reasonable people protecting themselves and their organizations from runaway programs that have much promise but little punch. Wise business people have reason for hesitancy, even fear. Promising programs have turned well-operating functions into poor performers due to distraction from the real goal.
Getting all of your key decision-makers and stakeholders (enterprise executives and other leaders from IT/HR/Operations/etc.) into one forum to get them to consensus is necessary. If you don’t get them to consensus early enough, you’ll live in ReWork City with your KMS plans. Or you’ll be run out of town on a rail when they discover what’s really involved and what the costs will be/are.
Round ’em up and head off their issues at the pass.
The KMS Governance Board
This group of executives and leaders of the enterprise need to take charge of KMS to protect and improve the enterprise, on behalf of the owners (the shareholders). They should target mission-critical and strategic endeavors for KMS treatment and not let the KMS effort run amuck or run aground. They should keep the IT and HR leaders from subscribing to the notion of “build it and they will come.” That might be true, but who then will keep it all up-to-date, or doesn’t that matter? What happens when best practices no longer are? Who pays for the administration and the maintenance/clean-up? The shareholders do.
If you don’t get consensus on the needs and returns for KMS, you’ll battle this issue forever. Getting everyone on the same page is important (or in this case, on the same pages as your business case).
A business case is necessary to document all the words/thoughts/numbers that are easily misconstrued if left to verbal discussions. Documenting the KMS plan and rationalizing it all in a business case makes for fact-based decision-making versus opinion-based decision-making.
Gathering Inputs for the Business Case
The data you need to gather includes the following:
- The forecasted “returns” to be gained from the KMS effort in terms of financial gains and strategic gains
- The probable costs for infrastructure implementation
- The probable first costs for content capture (analysis, design, and development in ISD terms)
- The life-cycle costs for both content and infrastructure
- The risks and potential costs of not doing anything at all
The KMS Business Case Outline
There are many structures and depths for business cases. The trick is finding one that will work for you in your situation.
The best one for you would be one that resembles any formerly acceptable, pre-existing, previously used “structure and depth” at your enterprise. Get a copy of recent business plans and business cases and try to mimic the format, content flow, and level of depth that works where you work.
Stage 1 Gate Review/Kick-off Meeting
After the business case has been finished, you need to review it with your Governing Board. One suggestion is to preview the case with each member (or at least the key decision-makers and influencers on your board) prior to the formal review. Allow no surprises, for yourself or others.
See Brian Blecke’s article “Selecting and Managing a Project Steering Team” on page 22 regarding the Project Steering Team – based on my PACT Processes – which Brian learned from me when he was a subcontractor to my client at General Motors – where I trained and certified several hundred ISD practitioners between 1996-2000 in MC/MI – what GM rebranded my PACT Processes to for their internal uses.
Next Post in This Series
In our next Post, Part 3, we’ll look at Stage 2.
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