Thought for the quarter - Punjab National Bank Institute of ...
Thought for the quarter - Punjab National Bank Institute of ... Thought for the quarter - Punjab National Bank Institute of ...
e-trackCASE FOR KNOWLEDGE MANAGEMENT IN BANKS-Dr. Sada Bihari SahuAdvent of information and Communication organization's objectives.Technology, Cybernetics, and Internet have led to a Further, it can be definedknowledge revolution that needs to be tamed and as 'the systematic management ofdirected towards attainment of board objectives of vital knowledge and itscivilization and development in general. In associated processes of creation,particular, an efficient management of unlimited organization, diffusion, use andknowledge strewn around can be a differentiating exploitation.feature for an organization that may be singled out as To put it more succinctly, KM addressesa distinctly superior entity in comparison to its business issues in the respect of products andcompetitors. This on-going knowledge revolution services, enhancing customer relationship andhas given unprecedented scope, growth and improving work processes.competition to the banking and financial sector also.Further, the universalisation of banking operation Objectives of Knowledge Management:driven by BASEL Committee has reduced banking While the objectives of KM differ fromboundaries. Today the challenge before the banks is organization to organization, the following basichow to develop and share the organizational points emerge:knowledge on continuous basis for the business How an organization will manage itsdevelopment. Here, knowledge has emerged as the knowledge better for the benefit of themost important ingredient for success of any organization and its stakeholder. It must consistorganization or individual and continuous learning of a goal and purposes, guiding principles, andhas become an imperative for any organization or proposed action plans and monitoringindividual to survive and prosper.mechanism.It should assimilate and disseminate relevantWhat is Knowledge Management?and high-quality knowledge by organization toKnowledge Management (KM) simply stakeholders and to other users.means management of knowledge. Different It should enhance learning process: knowledgeorganizations have defined KM in a different capture and sharing within the organization.manner. It may be defined as “the process of To enable adoption of new technology forincreasing organizational intelligence through diversification and growth.involvement and participation in the organization's To achieve service excellence.knowledge capital, for creating business value andgenerating a competitive advantage.According to Jennifer Rowley “ KnowledgeFunctions of KM:While every organization's objectives andmanagement is concerned with the exploitation and requirements are different, basic KM functionsdevelopment of the knowledge assets of an includes- abstracting, making meaning to explicitorganization with a view to furthering the knowledge/information and deconstructingJanuary-March20114
information into nodes and relationship to representknowledge etc- are common to all businessenvironments. These functions can be categorized asfollows:Finding, mapping, gathering and filteringinformation.Creating and developing new knowledge.Converting personal knowledge into sharedknowledge resources.Understanding, learning, acquiring orextracting knowledge value.Adding value to information to createknowledgeEnhancing performance and management.Consistent improvement in knowledgesharing mechanisms and processing of thesame.Delivering (Transferring) knowledgeTo develop a sound and well-integratedtechnical architecture which is appropriate tothe processing needs of the organization.Why we need KM in Banks?Knowledge management solutions are now themost important strategic technologies for largecompanies, according to a new report and survey ofEuropean executives by the Economist IntelligenceUnit (EIU.com, 2003), sponsored by TataConsultancy Services. In the survey, 67% ofcompanies cite knowledge management/businessintelligence solutions as important to achieving theirstrategic goals over the next three years. To servecustomers well and remain in business companiesmust: reduce their cycle times, operate withminimum fixed assets and overhead (people,inventory and facilities), shorten productdevelopment time, improve customer service,empower employees, innovate and deliver highquality products, enhance flexibility and adoption,e-trackcapture information, create knowledge, share andlearn. None of this is possible without a continualfocus on the creation, updating, availability, qualityand use of knowledge by all employees and teams, atwork and in the marketplace. Similarly, due toglobalization, liberalization, and deregulation, theface of financial markets is changing very fast andbanking is no exception to it. In such a turbulentenvironment, Banks have a unique opportunity andthe need to succeed in this market place by doingthings better than others. Therefore, some of theneed of KM in Banks is as follows:For Better customer knowledgeFor Better knowledge of products and servicesFor Better knowledge of processesFor Skill developmentFor better knowledge of peopleFor better market intelligenceFor Sharing of best practicesFor Better customer servicePrevention of knowledge walkoutsComponents of KM:Based on actual experiences of the leadingglobal KM case studies, the components for KM canbe broadly categorized into three classes - People,Processes, and Technology (Figure 1). While allthree are critical to build a learning organization andget business results from KM, a majority oforganizations worldwide implementing KM havefound it relatively easier to put technology andprocesses in place, whereas the "people" componenthas posed greater challenges. The biggest challengein KM is to ensure participation by the people oremployees in the knowledge sharing, collaborationand re-use to achieve business results. In manyorganizations, this requires changing traditionalmindsets and organizational culture from"knowledge-hoarding" (to keep hidden or private) to5January-March2011
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in<strong>for</strong>mation into nodes and relationship to representknowledge etc- are common to all businessenvironments. These functions can be categorized asfollows:Finding, mapping, ga<strong>the</strong>ring and filteringin<strong>for</strong>mation.Creating and developing new knowledge.Converting personal knowledge into sharedknowledge resources.Understanding, learning, acquiring orextracting knowledge value.Adding value to in<strong>for</strong>mation to createknowledgeEnhancing per<strong>for</strong>mance and management.Consistent improvement in knowledgesharing mechanisms and processing <strong>of</strong> <strong>the</strong>same.Delivering (Transferring) knowledgeTo develop a sound and well-integratedtechnical architecture which is appropriate to<strong>the</strong> processing needs <strong>of</strong> <strong>the</strong> organization.Why we need KM in <strong>Bank</strong>s?Knowledge management solutions are now <strong>the</strong>most important strategic technologies <strong>for</strong> largecompanies, according to a new report and survey <strong>of</strong>European executives by <strong>the</strong> Economist IntelligenceUnit (EIU.com, 2003), sponsored by TataConsultancy Services. In <strong>the</strong> survey, 67% <strong>of</strong>companies cite knowledge management/businessintelligence solutions as important to achieving <strong>the</strong>irstrategic goals over <strong>the</strong> next three years. To servecustomers well and remain in business companiesmust: reduce <strong>the</strong>ir cycle times, operate withminimum fixed assets and overhead (people,inventory and facilities), shorten productdevelopment time, improve customer service,empower employees, innovate and deliver highquality products, enhance flexibility and adoption,e-trackcapture in<strong>for</strong>mation, create knowledge, share andlearn. None <strong>of</strong> this is possible without a continualfocus on <strong>the</strong> creation, updating, availability, qualityand use <strong>of</strong> knowledge by all employees and teams, atwork and in <strong>the</strong> marketplace. Similarly, due toglobalization, liberalization, and deregulation, <strong>the</strong>face <strong>of</strong> financial markets is changing very fast andbanking is no exception to it. In such a turbulentenvironment, <strong>Bank</strong>s have a unique opportunity and<strong>the</strong> need to succeed in this market place by doingthings better than o<strong>the</strong>rs. There<strong>for</strong>e, some <strong>of</strong> <strong>the</strong>need <strong>of</strong> KM in <strong>Bank</strong>s is as follows:For Better customer knowledgeFor Better knowledge <strong>of</strong> products and servicesFor Better knowledge <strong>of</strong> processesFor Skill developmentFor better knowledge <strong>of</strong> peopleFor better market intelligenceFor Sharing <strong>of</strong> best practicesFor Better customer servicePrevention <strong>of</strong> knowledge walkoutsComponents <strong>of</strong> KM:Based on actual experiences <strong>of</strong> <strong>the</strong> leadingglobal KM case studies, <strong>the</strong> components <strong>for</strong> KM canbe broadly categorized into three classes - People,Processes, and Technology (Figure 1). While allthree are critical to build a learning organization andget business results from KM, a majority o<strong>for</strong>ganizations worldwide implementing KM havefound it relatively easier to put technology andprocesses in place, whereas <strong>the</strong> "people" componenthas posed greater challenges. The biggest challengein KM is to ensure participation by <strong>the</strong> people oremployees in <strong>the</strong> knowledge sharing, collaborationand re-use to achieve business results. In manyorganizations, this requires changing traditionalmindsets and organizational culture from"knowledge-hoarding" (to keep hidden or private) to5January-March2011
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