Wednesday, 4 April 2012

Show me the money! Demonstrating KM value

Show Me the Money! "How do you show the value of Knowledge Management?"

Yet another client was asking me the same question - how can you demonstrate the value?

I had just quoted to him Shell's claim that they deliver £200m per year though their knowledge-sharing communities, and he just could not see how that value could be measured.

The answer is quite simple.

Shell's CoPs are based on Pull - on Problem Solving. People in the Shell business units have a problem, and they got to the Communities of Practice to find a solution. When they have found a solution, they estimate how much time, money or risk that solution offered them.
Here's an example
You can see clearly how access to Community Knowledge allowed this guy to obtain a better price from a vendor. Demonstrable value added. Here's another example
One man-month of effort avoided. Demonstrable value.

It is by adding up examples like this, that Shell come to the figure of $200m annual savings that they claim for knowledge management.

Part of the challenge for the customer, was that until that point, he had not made the link between Knowledge Management and Problem Solving. To him, KM was all about blogs and case studies  - about Knowledge Push, and not Pull.

Once he could see the problem-solving link, he could more clearly see how KM could deliver value.

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