On a global basis, organizations are recognizing the importance of knowledge as a means to gain or sustain competitive advantage. Researchers have concluded that the only thing that is sustainable, for successful businesses, in the New Millennium – is what it knows, how it uses what it knows, and how fast it can know something new. In the past, the dilemma was finding enough information, but now the problem has shifted to identifying and managing the nuggets of mission-critical knowledge amongst the mountains of meaningless noise.
Many organizations are primarily knowledge-focused. They obtain data and information and produce either a product or service. In this production process they use their own, and other's, knowledge and information. Much of the knowledge in an enterprise is grounded in the minds of employees. Past experience and internal learning create processes, insights, methodologies, know-how and understanding that represent what the business is and how it adds value. Since knowledge is the most basic of all competencies, its recognition, creation, application, and management should be a critical success factor for attainment of a competitive advantage.
Since information builds on data and knowledge builds on both data and information, knowledge management includes all three elements. It does not focus on databases or information technology, although it may use both. Its concern is with managing its knowledge assets: creating, storing, and protecting, disseminating and using mission-critical knowledge. When people need knowledge, is it the right knowledge and is it timely and easy to locate and access? Is this precious commodity updated as learning occurs and better ways of doing things are discovered? The awareness of the value of knowledge to a business, coupled with its management, acts as an integrator that improves cross-functional communication and cooperation. Shared knowledge not only makes for a more effective, efficient and agile organization, but creates a common perspective and culture that produces a natural consistency of successful decisions and actions