Jane, an associate sales manager at O'Brien Auto Sales, has a customer who is looking for a vintage T-Bird convertible with low mileage. Dick, a sales representative at the company's downtown dealership, is talking on the phone with his customer who happens to have a friend looking to sell guessed it. If only Dick and Jane knew what they didn't know.

It's likely that this lack of communication could affect the business mission of O'Brien Auto Sales, and on an even grander scale, management of a company's internal information network can be critical to business failure or success.

That's why knowledge management (KM)-the harnessing and organisation of information assets that reside in the databases of a company or in its employees' collective brainpower-has become such a critical part of doing business in today's economy.

What makes a company knowledge-based? A company that is knowledge-based builds its competitive strategy on intangible, often invisible nuggets of information that cannot always be quantified or recorded. Such knowledge may include numbers and financial information about the company itself, information about competitors or knowledge of specific parts of the marketplace. It also includes the expertise of individual employees that, when mined, can increase a company's competitive advantage.

Where does knowledge in my company reside? That's part of what makes knowledge management such a difficult concept to grasp and put into practice. Knowledge is ubiquitous. It can live inside myriad databases, which explains why data warehousing-extracting customer patterns and other critical information from databases is such a crucial component of businesses today. Some knowledge is difficult to draw out; it often lies hidden and undervalued in the minds of individual employees. And it may dwell in the relationships your colleagues have with people at other companies.

Can I measure the ROI of knowledge management at my company? Quantifying a return on KM is hard to do definitively. Though a slew of companies are coming to market with software to help you try, it's still hard to put exact numbers on information organisation. If careful attention to your intellectual assets has allowed you to abort a costly project before it failed, for example, you can count what you saved by not pursuing the project as KM ROI. And if there were a way to measure what you're losing by not undertaking knowledge management, then that would count as ROI, too.

Companies that fail to exploit their knowledge tend to come upon ideas and decisions with a you-put-your-chocolate-in-my-peanut-butter approach rather than through a carefully organised method that takes full advantage of all available information. But in the knowledge-based world of today and tomorrow,happenstance is no longer enough: It's not what you have that's important; it's whether you can find it and then what you do with it.

Sidebar: Buzzwords

Knowledge workers: Employees in a knowledge-based society whose job it is to produce and consume knowledge and information.

Intellectual capital: The knowledge assets that a company owns, including information in company databases as well as what individual employees know.

Chief Knowledge Officer (CKO): The person in charge of organising a company's knowledge and information and ensuring it reaches the appropriate people.

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