Every knowledge management (KM) initiative needs to showcase results and business impact. Unfortunately, many organizations have no agreed business measures for their KM programs, and focus on metrics reporting without actually understanding whether value is being realized. Getting it right demands linking programs and investments directly to business outcomes, and reporting to leadership in terms they can comprehend.
The Role of Metrics
Because knowledge is an intrinsic asset to organizations, it is difficult to put a value on it, or the impact of KM efforts. This is critical because KM efforts represent a real investment, spending money and/or resources on technologies, dedicated staff, and changes to business process.
It is not always clear how to show a linkage between these investments to business value, and it is often tricky. For example, a common-use case in consulting firms is improving the quality of the proposal process through knowledge and collaboration, with the goal of improving win rates on new bids. The question is how to isolate and understand the impact of KM initiatives on the win rate, given that there are so many variables (people, geography, training, competition) influencing this critical business measure. But business leaders want and need to know the impact nonetheless.