ISO 55000 defines Asset management as the "coordinated activity of an organisation to realize value from assets". In turn, Assets are defined as follows: "An asset is an item, thing or entity that has potential or actual value to an organisation".
Knowledge is one of those items.
Asset management, in historical terms, originally focused on physical assets. Land was recognised as an asset, and land management was introduced, through practices such as rotation of crops, drainage, and letting land lie fallow in order to recover. Then money was recognised as an asset and managed as such, then people, then plant and machinery, and so on.
More recently, attention has moved to the intangible assets. Customers, and the relationship with customers, are seen as an asset, managed through CRM. Brand is seen as an asset; hence Brand Management. Reputation is seen as an asset, as are intellectual property, information, data, and an organisation's safety record. The value of all of these is realised through independent management disciplines.
Knowledge is one of the last unmanaged assets for many organisations.
Knowledge is an intangible asset, but one that is worth a huge amount to many organisations; for a large multinational the unrealised value of knowledge may run into billions of dollars. Knowledge Management represents an approach to realising the value of that huge asset.
Knowledge Management as Asset Management
So if we see knowledge management is seen as asset management, what conclusions do we draw? How can Knowledge Management learn from other areas of Asset Management?
Asset Management involves the balancing of costs, opportunities and risks against the desired performance of assets, to achieve the organizational objectives. So one of the early steps in Knowledge Management is to look at the current performance of Knowledge versus the desired performance. This requires running a Knowledge Management assessment and a Knowledge scan across your organisation as an initial survey. Much as an initial step towards managing a physical or financial asset is to survey the current state, so your first step in KM is to see what you already have, and find out how well it is operating.
Asset management enables an organisation to examine the need for, and performance of, assets and asset systems at different levels.What is important is not the asset itself, but the business need for the asset. Knowledge Management, just like any other asset management discipline, needs to focus on the business-critical knowledge. Your knowledge management strategy should start with the business strategy, and the business drivers that KM needs to support.
Asset management enables the application of analytical approaches towards managing an asset over the different stages of its life cycle. The Australian Government recognises four stages in asset life cycle management, which can be applied to knowledge as follows (and as shown in the picture below);
- Planning: determination of asset requirements. In KM terms, this is dealt with in the KM strategy, and includes a review of knowledge needs across the organisation.
- Acquisition: procurement of assets to meet an identified service need. In KM terms this represents Knowledge Acquisition; from in-sourcing of knowledge, creation of new knowledge through innovation processes, and acquisition of knowledge from first-time activity.
- Operation and maintenance: management and use of an asset to deliver services, including maintenance. In KM terms, this represents management of the knowledge you already have, including the creation of communities of practice and knowledge bases, the assignment of practice owners, and the creation of what we call "knowledge assets". It also involves attention to the risks that face the asset, such as the loss of knowledgeable staff.
- Disposal: treatment of an asset that has either reached the end of its useful life, is considered surplus, or is under-performing. In KM terms, this represent a core activity in the management of knowledge assets, namely the removal of the old knowledge, the out-of-date knowledge, and the just plain wrong knowledge.
When you begin to treat your knowledge as an asset, there is much you can learn from the well-studied world of asset management, and much value you can add to the organisation from the largely untapped asset that is organisational Knowledge.