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HOW KNOWLEDGE MANAGEMENT CAN IMPROVE SALES AND MARKETING
PRODUCTIVITY CBS.022/04/99/F A presentation at Cambashi's tenth annual seminar Most managers will know how irritating it is to see a sales rep, half an hour before meeting a prospective customer, searching frantically for an up-to-date price list, the customer's address and the request for proposal, without a proper presentation or any idea what he or she is going to say. Knowledge management is growing in importance as a means of solving this kind of problem and improving overall organisational efficiency. "If HP knew what only HP knows, we would be three times as profitable," said Lew Platt, CEO of Hewlett-Packard in what is probably the most famous statement ever made about knowledge management. Every aspect of business can benefit from knowledge management, and its effect on sales and marketing is well proven. Effective knowledge management helped Dow Chemical to increase its annual licensing revenues by $100 million, Steelcase to increase productivity threefold and Texas Instruments to avoid unnecessary costs of $500 million. But while more than 1800 different software products carry the label, most are not real Knowledge Management products: all they do is provide technology to help organisations manage their knowledge more effectively. Knowledge can be explicit (such as that found in books and journals) or tacit - personal knowledge and knowhow. Knowledge management is the means of finding, capturing and organising both kinds of knowledge, making it available across an organisation and using it efficiently. In order to do this, knowledge must be converted from tacit knowledge to explicit knowledge that is accessible to people throughout the organisation. Procedures must be established to ensure that explicit knowledge is recorded and presented in an understandable and immediately useable format. There is also a need for a change in personal and corporate culture - all too often, people guard their knowledge closely on the grounds that "knowledge is power". There are several problems facing effective knowledge management. First, information diminishes in value over time. Second, whilst repositories such as file servers and databases hold huge amounts of information, this is usually not in a form that is easily accessible to the whole organisation. And tools such as Internet search engines tend to produce far too much data, the majority of which is almost entirely irrelevant. Email systems provide a useful mode of communication but tend to come up with too much "just in case" information. A good knowledge management system addresses all these problems, providing the right information at the right moment. Information and knowledge are currently held in people's heads and personal databases, libraries and paper documents, electronic publications, corporate intranets and on the Internet. There are systems for harnessing this information, but many produce too much, unfiltered information which is neither presented in an easily understood format, nor is easily useable. For example, there are three kinds of Internet search engine: keyword based, concept based and "Intelligent tools". Keyword based tools are the most common, but often come up with non-relevant information whilst omitting other, more important knowledge. Concept based tools include web directories such as Yahoo, which searches on the basis of information type rather than on a simple keyword, but is therefore extremely labour intensive at the input end. Another concept-based tool is XML tagging, a new standard that has evolved from HTML. However, this is most useful on an internal Intranet - no knowledge based standards have so far been adopted across the Internet. Intelligent methods have been applied with varying degrees of success. Some, notably agent technology, carry out intelligent searches based on instructions from the user, forwarding their finds by email. Others build up a profile of the type of information that the user generally looks for and feed this back into future searches, which reject anything likely to be irrelevant before presenting it to the user. AIMIT, being developed by Cambashi for use in its own projects, is a concept based Internet search system that combines profiling with trees of knowledge to cut through the information glut and locate the information needed by the user. Profiling allows the search to focus on specific competitors and market sectors, while trees of knowledge provide a context for this search. Knowledge management can make a huge difference to the efficiency of a company's sales and marketing activities. For sales, it provides a well maintained customer database, competitive information and pricing details, together with effective contact, bid and risk management, and prospect qualification. Much of this information is supplied by Marketing, which provides the organisation's "information funnel". The role of Marketing is to create an environment in which sales can be made. This means identifying and ensuring that the organisation has the right products for the market, the right pricing policies, the appropriate geographical and vertical markets together with likely competition, and then promoting the products effectively. Effective knowledge management is as much about people and processes as it is about technology. On its own, technology will not provide the solution; nor can an intranet be relied upon to supply all the knowledge needed by individuals within a company. However, most relevant information is already held somewhere in the company, in a tacit if not explicit form. By harnessing this and combining it with the right external search tool, organisations can make huge improvements in their productivity, efficiency and profitability.
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