Knowledge Management Definition and Importance

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Tasks at work can help employees enhance their knowledge and abilities with or without them realizing it. This is where a knowledge management system comes in handy.

The process of learning that employees do can be more effective and efficient if there’s a certain system that manages the knowledge. Without one, it can lead a company to budget overruns. So, what is actually management of knowledge?

What is Knowledge Management?

Management of knowledge is a system to create, share, and manage the information inside of a company. It is used to ensure that all employees are on the same page.

This kind of approach is highly recommended to be implemented in a new company. It will help the employees to develop their skills and knowledge. So, the company can grow as well.

Importance of Knowledge Management

Undoubtedly, management of knowledge is critical for all businesses to employ. Following are some reasons why.

Ease of Access to Information and Knowledge

It is easier for employees to get the information and knowledge they need. For example, if an employee wants to acquire a certain skill, he or she will quickly discover where that information may be obtained, whether through books or by consultation with professionals. That way, employees can get the information they need faster. So, activities in the company can run efficiently.

Efficient Decision Making

This intellectual skill plays an important role in the process of decision making. It is still related with the previous explanation about ease of access to information and knowledge. By having records of it, a company can make the right decision making based on a variety of viewpoints.

Operational Efficiency

Implementing this is critical to increase operational efficiency. Once again, the ease of access to information will impact the productivity of both the employee and the company itself.

Encourage Innovation

Information and knowledge are required in order to create innovation or change. In other words, a good management of information will encourage both the employees and company to be more innovative.

Improve Customer Satisfaction

If all employees have access to the company’s information and knowledge, they can provide better services to consumers because they know what they should do. So, if you want to improve customer satisfaction, a management system of knowledge is one of the ways to do it.

Advantages and Disadvantages of Knowledge Management

There are always advantages and disadvantages in every thing, this concept is not exempt.


  1. Improves the effectiveness of a company’s operational plan
  2. Improves market assessment capabilities
  3. Optimizes internal’s knowledge and capabilities
  4. Improve product and service quality
  5. Increases productivity and operational efficiency
  6. Increases a company’s profit


  1. It takes time to be able to integrate the management of knowledge systems into operational processes and business strategies that have been running
  2. Difficulty in finding efficient ways to record business knowledge
  3. Difficulty in applying the management of knowledge system technology
  4. Difficulty in encouraging each employee to share knowledge and skills within the company
  5. Risk of information leakage to parties outside the company

Also read: Problem Solving Is Easy, Follow These Steps!

Knowledge Management Cycle

Below is the cycle of the management system of knowledge.


This cycle includes data inputting, scanning, interviewing and brainstorming.


This cycle includes categorizing, indexing, sorting, attributing, and coding.


This cycle includes contextualization, cooperation, compression, and projection.


This cycle includes knowledge distribution.

Types of Knowledge

Knowledge is the most crucial part in a management system of knowledge. There are two types of knowledge: tacit and explicit.

1. Tacit/Know-How

Tacit knowledge comes from experience or intuition. This type of knowledge is often difficult to convey in a systematic way.

2. Explicit/Know-What

Explicit knowledge is documented in specific media as a resource for others. Explicit knowledge may be handled in the system since it is easier to transfer.

That is all about the knowledge management system that you should be aware of. Don’t forget to check out the Clockster blog for more fascinating and informative articles!

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