KNOWLEDGE Management in SMES By Assoc. Dr. Susanne DursT South Ural State

University 15 December 2016

management in SMEs
Case studies

improved performance: “knowledge as a strategic asset”. This can express

itself in the areas of competency, efficiency, productivity, decision-making, learning behaviour, also increased motivation
This is critical, especially for SMEs, as they experience considerable pressure from large companies and customers
External considerations (push)
Global competition is on a constant rise, intensive competitive pressure
In some fields, SMES are in direct competition with large companies
Large companies expect certain KM systems from their suppliers
Creditworthiness (Basel III)

replacement
To secure skills and competences of experienced employees
To retain employees
Operation

management
To control the handover of duties and tasks
Preservation of experience/lessons learned, avoidance of errors and duplication
To structure operational data needs-based
Sustainability of organization
Location of valuable knowledge sources
To better evaluate customer and market potential
To strengthen customer loyalty

Business Challenges ahead

of SMEs
Due to limited resources SMEs cannot compete with large

companies in the areas of physical and financial resources
Knowledge plays a key role, in particular when change (renewal), innovation and growth has occured or is to be achieved

KM on an operational level
Most knowledge is being kept in

the minds of the owner and some key employees
Knowledge sharing may happen in corridor conversations or at organization members´ events (e.g. birthday party)
Weaker than larger firms on formal and systematic discussion in order to share tacit knowledge
Most SMEs adopt short-term unstructured ways towards organisational learning
They rely on external knowledge creation sources (e.g. secondary data and personal contacts (network))

personal relationships
Simple organizational structures
Flat hierarchies
(Often) dominant managing director/owner-manager
Distinctive personal communication

flow to all stakeholders
Slow staff turnover (at least in some parts of the world)

of awareness regarding the strategic meaning of KM in organizations
Dependence

on owner-manager and (if relevant) a problematic company succession
Dependence on a few number of key organization members
Short-term orientation
Day-to-day business operations require close attention

KM in SMEs: Opportunities and Challenges Ii

integration of employees
Imprecise information needs
Lack of willingness to share knowledge
Unclear

business strategies
Weaknesses in the information and communication structures
Targeted use of organizational knowledge
Transfer of project/order experience

General Challenges regarding KM implementation

of SMEs
Entrepreneurial personality and generalist knowledge
Corporate culture and communication, strong

personal connection to all stakeholders

Disadvantages of SMEs
Lack of transparency and missing awareness for functions
Accumulation of functions and generalist orientation complicate a clear identification and categorization of knowledge
Missing link between knowledge and the different stakeholders
Lower degree of professionalization: skill gaps remain undetected
Psychological factors: Knowledge means power
Greater dependence on the knowledge of individual employees/managing director/owner

A holistic approach to KM is needed I

Bundling of general knowledge among a few persons
Shorter and

more direct communication
Intensive personal flow of communication with all stakeholders

Disadvantages of SMEs
Accumulation of functions hampers knowledge creation and reflection
Lack of a designated person for KM
Missing employee acceptance towards IT-based KM systems

A holistic approach to KM is needed II

designed for large companies, SME specific characteristics are considered to

a limited extent only

A holistic approach to KM is needed III

pneumatics, optics and computer
The firm develops and manufactures high tech

products. It operates in a rapidly changing market with highest requirements. In order to compete with their competitors, two KM initiatives were started:
Development of a knowledge database. By making use of already existing solutions costs related to production delays were expected to be reduced;
competence mapping, in order to optimise decision making processes in the firm
Lessons learned
The crucial point is not the extent of the database but rather the actual utilisation. As not all knowledge can be stored, competence mapping is of major significance.

provider of collaborative software solutions for CRM. In a period

of growth the aim was to preserve and protect the knowledge of its staff effectively. The long-term goal was to build a central knowledge base that meets the needs in all areas of operation.
The decision was taken to focus on one area at the beginning. This area was communications and the exchange of knowledge between the product design team and a group of persons from sales and consulting.
Informal communication was the practice and diffusion of knowledge happened through internet, intranet, email and telephone conferences.

Case Studies (based on CEN, 2004) II

made possible access to past and current projects, sales initiatives,

marketing campaigns and administrative procedures.
The company-owned software involves a knowledge base module which served for the storage of software development information. A critical aim of the KM strategy was to integrate this module in the KM initiative.
Lessons learned
The broadening of knowledge concerning KM via specific seminars and workshops helped to overcome initial oppositions to the changes. KM was considered as an opportunity of keeping the standing as a leading CRM software provider. In order to defend this position also in the future, the communications‘ efficiency and effectiveness was to enhance. The installation of the central knowledge memory formed the necessary condition.

Case Studies (based on CEN, 2004) III

KM implementation:
an expert system for recording departing experts;
a

motivation system for those employees willing to develop their career in the firm
In one department a KM project was implemented which was accompanied by four main processes: a pilot study identified knowledge gaps and knowledge needs; areas were selected in which more in depth analyses of staff competences should be conducted; a competence supporting tool was developed and later implemented. After having evaluated a number of existing solutions an IT system was selected and implemented. At the same time a number of benchmark aims were specified.

Case Studies (based on CEN, 2004) IV

knowledge will always lead to a loss of information. Therefore,

it is important to ensure that a high degree of engagement is given through the active assumption of procedure and practices.
Additionally, it is important that those employees who create and share knowledge are recognised. Questions such as How does it affect me? and What do I get out of it? require clear answers. A further critical aim was to produce much support from the project area as a necessary basis for the KM initiative‘s extension to the overall organisation.

Case Studies (based on CEN, 2004) V

are required, among other things for microchip production.
The company is

based in Strausberg near Berlin; in this region also the majority of customers are located. The company distributes its products nationally as well as to Asia, Italy, France and Switzerland.

Challenge: To hand over knowledge and to continuously develop it
ALLRESIST is successful in a market niche which is characterized by specialized and knowledge-intensive products. Because of this the employees are highly skilled professionals who have extensive specific expertise.

Questions posed:
What happens with the knowledge when an employee leaves the company?
What can the company do to keep as much knowledge as possible, and to make sure that it continues to be available?
How can the company in general ensure that employees have the (relevant) latest know-how?

Case study: ALLRESIST GMBH I

transfer of the special expertise of the employees concerned. This

involved the systematic review of the extensive literature collections of the former Photochemical Works: Books were cataloged and archived, outdated literature was sorted out. The result was an electronic bibliographic database, which provides initial access to a new topic.

In addition, transfer training took place. The knowledge of retiring individuals was structured in topics to which two categories were assigned: 1. Technology and Maintenance of measuring instruments and 2. resist training. In the course of the training, participants also developed question-answer combinations along the line "What if ...?", which completed the transfer of factual knowledge.

Case study: ALLRESIST GMBH II