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Investing in Technology to Build Knowledge-Based Companies

information technology

Investing in Technology to Build Knowledge-Based Companies

Executives understand how knowledge management as facilitating organizational processes and activities uses information technology to organize existing information. Information technology plays a crucial role in creating, retrieving, storing and applying organizational knowledge stated by Maryam Alavi and Dorothy Leidner’s MIS Quarterly review.

Executives focus on individuals as the major source of knowledge and show how followers tie together so that they can affect the sharing, storage, transfer, and apply knowledge within organizations. Executives, therefore, see these connections, and the related shared knowledge and memory, as central to the effectiveness of knowledge management.

How Technology Matters?

Executives are well versed today on information technology and usually have a fleet of followers in this department that they can depend on. Sandy Weil, a financial executive, wanted one number when he left the office that determined his value at risk. His technology team delivered and came up with one number called VAR (Value At Risk). Wiel slept much better knowing what risk he faced while running one of the largest financial organizations in the world. He was controlling operational risk and inspiring employees to follow where he leads.

Technology, as one would imagine, is often associated with information and communication dispersed within companies. Considerable alignment between information technology and the knowledge-based view connects the two to develop and disseminate knowledge throughout the organization which, in turn, is an important factor of sustainable competitive advantage.

Executives agree with Robert Grant, who states that knowledge integration is one of the main reasons for the existence of companies. Furthermore, Andrew Gold, Arvind Malhotra, and Albert Segars suggest information technology as an important resource for strategic planning for knowledge integration. Olivier Caya posits that information technology enables knowledge integration by using three possible mechanisms:

1. Impersonal

2. Personal

3. Collective

Executives can use the impersonal mechanism to enact regulations, procedures, and rules aimed at coordinating intellectual capital within organizations. Information technology disseminates protocols among members and allows them to be knowledgeable of their progress toward meeting determined milestones stated in the strategic plans.

The personal mechanism is used by executives to vertically and horizontally exchange knowledge between employees and collective mechanism is used when information technology manifests itself as a synthesizer of ideas and knowledge acquired from multiple organizational members. Thus, information technology encourages people to embark on technological facilities, such as shared electronic workspaces, to provide new ideas and possible solutions for solving organizational problems. As a result, it is viewed that information technology plays a critical role in integrating knowledge and is therefore aligned with the knowledge-based view.

Executives can use information technology as a communication mechanism manifestation and deployment and decision-aid technology. For example, Hsin-Jung Hsieh argues that communication technology provides ways to enhance interactions among members and departments within organizations. This type of technology eliminates the barriers of organizational communications while improving the extent of knowledge sharing and access for all followers at various levels of the organization.

Thus, there is a strong correlation between communication technology and social capital view that sheds light on the development of relationships within organizations to aggregate human capital into social capital so as to provide further information and opportunities for all members. This subsequently creates valuable resources for an organization as a whole.

Furthermore, decision-aid technology develops cohesive infrastructures to store and retrieve the knowledge to enable followers in creating more innovative solutions to problems and managing operational risks. Ergo, information technology supports knowledge by enabling interactions and providing more comprehensive and effective solutions to solve organizational problems.

Unleashing the Power of Knowledge in Companies

Today, technology has changed the business world ten-fold. Every day there is an easier way to process, access, and disseminate information. Technology – now referred to as Information technology – is an internal resource that increasingly facilitates organizational communication and improves the search for knowledge. When executives have people in place to manage information technology, the organization can see increased revenues, better satisfaction by employees and customers, and most importantly enhance their own effectiveness as leaders.

The social capital view supports the idea that knowledge creation is highly dependent on developing organizational communications and interactions. Information technology enables organizations to overcome space constraints in communication, and promotes the depth and range of knowledge access and sharing within companies.  More specifically, communication technologies can be employed to enhance the conversations and knowledge exchanges between organizational members. Scholars such as Andrew Gold, Arvind Malhotra and Albert Segars argue that this knowledge shared through information technology could positively contribute to knowledge integration.

I also introduced executives to what the scholar Robert Grant describes using the knowledge-based view. Highlighting knowledge integration as a major reason for the existence of a company. Knowledge sharing itself can develop more innovative climates and facilitate knowledge creation in organizations. Thus, communication technologies can play a crucial role in improving knowledge creation.

Communication technology is an internal resource that develops and integrates organizational knowledge as the most strategic factor of competitiveness. As executives use expert systems for decision-making, technology becomes a decision-aid. As mentioned earlier, decision-aid technology can be also considered as a facilitator of the knowledge creation process by providing the essential infrastructures to store and retrieve organizational knowledge.

Executives agree with Shahnawaz Muhammed who highlights major functions for information technology and explains that information technology enhances learning and sharing knowledge by providing access to knowledge, and stimulates new ideas and knowledge generation, transfers an individual’s knowledge to other members and departments, and improves knowledge capturing, storing, and accumulating, aiming at achieving organizational goals. Bringing us to the conclusion that information tech has a positive association with knowledge management performance in companies.

In Conclusion

Standing on the shoulders of scholars before us, I indicate that information technology is a major factor for knowledge management success and supports the positive impact of information technology on knowledge management performance.

For executives, this article can portray a more detailed picture of the effects of information technology on knowledge management. Many organizations still implement knowledge management initiatives without sufficient consideration of their technological infrastructures.

When executives ensure the effectiveness of knowledge management projects they increase control and lesson operational risk. I also suggest that a firm’s ability to enhance knowledge management can be highly affected when executives implement information technology. Furthermore, I suggest that scholars take these ideas and continue to conduct research using executives as the focal point so that academic scholarship can meet the needs of managerial implications at the higher echelons of organizations worldwide.

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Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to business publications and his work has been featured in top-flight business publications.

5 Outdated IT Practices That Companies Need To Eliminate

Technology changes nearly as quickly as the calendar flips. A new device or upgrade that was trending not long ago may become antiquated or obsolete before you know it.

Information technology is integral to most businesses today, but keeping up with the interrelated parts of IT and the advancements – from software to cyber security to social media platforms – isn’t always prioritized. IT experts say companies falling behind in that category could see their business slip as a result. 

“Over the last several years, many IT practices have become fixed and inflexible,” says Chris Hoose (www.choosenetworks.com), an IT consultant who works with small businesses. “While older concepts are a good springboard, some have become ineffective. There are many you can reconsider and/or eliminate.”

Hoose looks at five IT practices he thinks businesses should stop using:

Outdated software. One of the biggest security vulnerabilities a company can face is one of the simplest to address: outdated software. “There are many risks associated with using unsupported or outdated software, and hackers love to exploit these gaps,” Hoose says. “Then there are the inevitable problems of a system failure or antiquated workflows that slow a company’s productivity. Although upgrading software – including your operating systems – can be time-consuming and expensive, doing so can safeguard your organization and create more room for innovations.”

In-house server hosting. Much of today’s modern software is hosted in the cloud. “Most cloud vendors are able to provide public, private or hybrid cloud hosting based on your requirements,” Hoose says. “With such extensive cloud capability, there is no reason anymore to rely on in-house server hosting. Migrating to these versions can not only help save your business the costs of purchasing and maintaining software, but also the costs of maintenance and upkeep on servers.” Another plus of cloud computing is the added security of cloud disaster recovery, a backup and restore capability that enables companies to recover data and switch to a secondary operational mode.

Inflexible work environment. The new wave of the workforce is an IT strategy that includes video cameras and laptops for team members to facilitate remote work and remote communications. “If your firm doesn’t have that flexibility, they risk being left behind,” Hoose says. “Flexible work arrangements improve a company’s effectiveness and morale. It’s one of the best uses of today’s IT.”

Newsgroups and discussion forums. These popular mediums once served as portals where questions were raised from the team and answers were provided in a question-and-answer format. Better alternatives, Hoose says, are options like Facebook, Hangouts or Slack. “The format is far more intuitive and user-friendly with social media pages than with conventional discussion forums,” he says. “Also, multiple answers can be handled easily with social-media pages.”

Unnecessary complexity. Hoose says an overly complex structure is the core failing of legacy systems. “Rethink your architecture and prioritize for simplicity,” he says. “When modernizing your systems, less is more in terms of both architecture and functionality. You can start by implementing only the most important features. Make sure the new application will worrk well with the rest of the tools used in your business by default. Whatever applications you choose, make sure you use a solid and future-ready technology stack to deliver optimal performance.”

“Many executives are unsure, or even unaware, of the risk that obsolescence presents to their technology portfolios,” Hoose says. “Their uncertainty stems from not having the right data and dealing with conflicting points of view on priority, value, and risk.”

About Chris Hoose

Chris Hoose (www.choosenetworks.com) is the president of Choose Networks, an IT consulting firm for small businesses. Hoose started the company in 2001 to give large-scale solutions and support to businesses that can’t afford their own in-house IT department. He earned a Master of Information Systems Management from Friends University.