Review: Measuring the Impact of Knowledge Management
Review: Measuring the Impact of Knowledge Management
Jong-Ae Kim, PhD
IFLA Journal, Sage Publications, 2006, 32, 362-367
Reviewed by Bambang Fahruddin Syahrir English Teacher of SMA 1 Ambalawi-Bima-NTB
This paper is an overview of the approaches to evaluate the impacts of knowledge management implementations to organizational performance. It is considered to be very critical mainly because of the increasing implementation of knowledge management as a new management technique within organizations in which it is believed to be capable of contributing to business benefits. The writer addresses her views that demonstrating the direct correlation between KM and organizational performance is quite complicated to be evaluated since KM may not be the only factor affecting the organization’s performance. However, several academics and practitioners such as Grooijer (2000); Del-Rey- Chamorro, et al. (2003); Darroch (2003), Teruya (2004), and Bose (2004) are reported to have made examinations on their interrelationships.
Referring to several studies above, Kim recommends four methods to support practitioners to identify and develop the evaluation frameworks such as return on investment (ROI), balanced scorecard (BSC) approach, qualitative case studies (QCS) and success case method (SCM). In conjunction to these, by applying ROI can help justifying the resources invested in KM initiatives and assesses financial performance of the initiatives. Nevertheless, ROI is not the only one used in financial measure but several other alternatives can be reliable such as the payback period, the net present value (NPV), and the return of knowledge (ROK) as addressed by Chen & Chen (2005, p. 382).
Furthermore, two academics, Haugh and McDermott as cited in Kim (2006) put forward two different methods of ROI calculation to come up with value and benefits that KM activities have created. The writer, Kim then recommends four perspectives of performance measures: financial, customer, internal business, as well as innovation and learning perspective. If a company develops BSC, it should establish general goals and specific goals for each perspective on the BSC and identify appropriate measures based on the goals by establishing and employing a KM index based on the BSC. Conversely, it is not recommended to apply the same KM index to two different organizations in the same industry. However, since organization has four major elements such as vision, strategy, objectives, and performance measures, the explanations of the BSC application should be related to these variables (Chen and Chen, 2005). But, these are not touched clearly because the writer perhaps intends to keep her writing simple and easily understandable since she is merely to put a basic concept of KM performance measurement.
What is more, QCS approach is also valuable to evaluate KM performance using variety of methods such as interviews, focus groups, observations, and analyses of existing paper or electronic documents. The writer puts most emphasis on employing qualitative approach as the method to measure KM performance and neglects most at using quantitative with the reason that some types of benefits are quantifiable. Nonetheless, I partially disagree with this since Chen & Chen (2005, p. 382) say that a quantitative approach is used to represent a tangible, visible and comparable ratio in which qualitative can not be reliable. Last but not least is the SCM consists of two parts: locating likely success cases and identifying and documenting the success cases in which survey, records analysis, performance data are used to unlock the two cases.
In conjunction with KM performance measurement, however, Chen & Chen (2005, p. 382) propose slightly different types of KM evaluation methods: qualitative and quantitative, financial and non-financial, as well as internal and external performance approaches. Although these evaluation methods are largely adopted within Kim’s writing, the phases (preparation phase, general KM evaluation phase, and option model phase) of how to implement the methods are not explained so this might arouse a lot of questions from the readers’ standpoint.
Then, several essential missing points in Kim’s writing in which are considered making her writing become less informative and vague is the unavailability of definitions of several key terminologies used such as ROI, BSC, QCS, and SCM. Subsequently, the strengths as well as the weaknesses or limitations of applying each method are not explicitly explained in depth. What is more, the way of applying these evaluation approaches are absolutely not commented as stated previously. Even so, her writing has successfully given theoretical or conceptual sights to readers about KM, its roles toward organization, the leader and the people as well as proposed frameworks for evaluating KM performance whereby academics and practitioners can make use of this overview as the foundation for further research and development.
All in all, I would recommend this journal to any student, academic, and practitioner who particularly concerns with KM in order to know the importance of adopting KM for their organization benefits. Furthermore, they might adopt and apply several approaches to evaluate the contributions of KM implementations to organizational performance.
References:Chen, M. Y. & Chen, A. P. 2005. Integrating option model and knowledge management performance measures: an empirical study. Sage Publications: Journal of Information Science, 31 (5), 381-393. Retrieved on March 26, 2008 from http://jis.sagepub.com/cgi/content/abstract/31/5/381
Kim, J. A. 2006. Measuring the impact of knowledge management. Sage Publications, IFLA Journal, 32, 4, 362-367. Retrieved on March 26, 2008 from