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Measuring the Success of KM Digital Transformation

Over the past decade, digital transformation has been a key focus for many organizations. Yet, it wasn’t until the recent months when many have been forced to become fully digital that we’ve seen how critical knowledge management is to an organization’s ability to adapt to unexpected circumstances. Most executives see the value in knowledge management, especially those who lead knowledge organizations such as strategic consulting firms or financial advisory businesses, yet other operational investments continue to be prioritized over fundamental knowledge management programs that are critical in ensuring that an organization is not only efficient and effective, but resilient to the rapidly changing environment in which it does business.

If you’re struggling to present a strong business case for your KM digital transformation effort, I’d like to share some basic success metrics that will help you to articulate the value of your knowledge management projects. There are, of course, much more complex and sophisticated means to calculate a Return on Investment (ROI) for KM efforts, but my experience has shown that many organizations need to first focus on simple, foundational KM elements before overcomplicating and potentially overpromising the value that will be gained from their KM initiatives. In terms of KM digital transformation, I’ll focus on a three-part approach: 

  1. Technological Strategy: Ensuring you have the right technology in place to support your digital transformation effort;
  2. Content Strategy: Having a clear content strategy and plan that focuses on making high-quality, relevant knowledge and information available to your workforce; and
  3. People Strategy: Making sure that your digital transformation solutions are designed with your people in mind, then involving them throughout the strategy, implementation, and rollout phase to ensure maximum adoption of the new technology and ways of working.

KM Technical Strategy

From an enterprise perspective, many organizations struggle with having too many KM systems, many of which house similar types of information, and not enough governance. I often hear the complaint that people have no idea where to look for the information that they need to do their jobs. Beyond that, when they do come across information that might be helpful, they question whether it is reliable and up-to-date. This frustration typically results in abandoning their search altogether and seeking out the human search engines in the office. Now that we’re no longer all in the same office, this becomes much more difficult which further necessitates the need for digital solutions to this day-old problem. 

Organizations that have invested in KM technology that centralizes or streamlines access to the critical knowledge and information people need to be productive have been much more successful in adapting to our new digital way of working than those who have deprioritized the need for well-designed intranets, knowledge bases, enterprise-search tools, and metadata management systems. Here are a few metrics you can use to guide your case for why you either need to improve your existing KM systems or look into purchasing new ones:

  • Search Effectiveness: How quickly can people find the information they need?
  • Search Efficiency: How many systems do they need to access to get to what they’re looking for?
  • Advanced Search: To what degree does search leverage more sophisticated semantic technology so that people can search for knowledge using the natural way they ask questions? Just like Google!

Think about the number of hours people spend looking for information multiplied by their hourly rates. You can take an aggregate of this by calculating 4 hours per day times the 262 work days times an hourly rate of $40 to arrive at about $42K per person spent just looking for information. Now multiply that by the number of employees you have and you arrive at a significant cost that could be saved by investing in KM technology.

A recent example of when we’ve supported the business case for KM technology is when we calculated the amount of cost savings that a large, global consulting firm could save by investing in semantic technology with auto-tagging capabilities. They were investing hundreds of thousands of dollars outsourcing resources to manually tag their content. By calculating the amount of money that would be saved by automating this necessary task, it not only increased the accuracy of tagging content which improved how quickly consultants could find the information they needed such as past deliverables, presentations, proposals, and templates, but it also reduced the reliance of external support needed for this mundane yet critical task. 

KM Content Strategy

There’s the old adage that says, “Garbage In, Garbage Out.” This is absolutely the case for KM digital transformation. Organizations struggle with having way too much content due to the fact that everyone nowadays is not only a content consumer but a content creator. It is far too easy to produce a Standard Operating Procedure that isn’t very helpful because either it’s not clearly formatted, written, or governed to ensure it is up-to-date. Beyond this simple example, think about the struggles an organization faces when every department or business unit is responsible for coming up with their own standards and processes for how they capture, manage, store, and present institutional knowledge in the form of content. What I’ve seen in many organizations is a lack of consistency and focused effort towards ensuring the appropriate level of centralization or decentralization of content governance. This results in a mess of content that no technology in the market can fix. 

Ask yourself these questions that will guide you towards the most relevant metrics when evaluating your content strategy:

  • Content Governance: Is there a clear governance process in place to standardize the way content is created and published? How many people does that involve, how long does it take, and how often does it produce quality content in comparison to the demand for it?
  • Content Standards: To what degree are you standardizing the templates used to produce the same type of content?
  • Content Tagging: How consistently are you tagging that content with metadata that can be used to improve its findability and discoverability?

To measure the value of a content strategy effort, you can use a similar calculation as the one above related to finding the content. Beyond that I would suggest measuring the effectiveness of the content in serving its purpose. For example, EK does a lot of work with service centers and help desks that require knowledge articles to support their internal and external customers. The quality of that content is directly related to the speed in which customer service agents can resolve issues, respond to customer questions, and ultimately deflect the need for additional touch points. Further, if customers can find their own content in self-service knowledge bases, that significantly decreases the number of service desk agents needed to address simple, routine questions and issues. To uncover the cost savings here, you can calculate a baseline of the number of issues addressed by your Tier 1, Tier 2, and Tier 3 support agents which all have increasingly higher hour rates. When you decrease the number of escalated issues or on a very basic level, calls altogether, you can multiply the cost of each individual needed for support and see that number decrease as you improve the quality and findability of content.

People

Last and most importantly, yet often forgotten, are the people who are impacted by your digital transformation. Your organization will consist of groups with varying levels of familiarity and comfort with a digital workspace. Make sure to meet people where they are by truly understanding their goals, incentives, and frustrations as it relates to the digital solutions you are rolling out. This level of analysis is necessary to adapt your implementation plans, which should include a change and communications strategy, to the different personas affected by your digital transformation efforts. Ultimately, whether you are focusing on a technical or non-technical solution, it should make your knowledge workers more productive, efficient, and engaged. A knowledge organization’s talent and human capital is its key differentiator so a digital transformation initiative that doesn’t invest in a concerted effort towards addressing people’s needs will almost always fall short of being successful. 

These are the questions you should be asking when considering your people:

  • People Readiness: How ready is your workforce for a digital transformation? Do they have access to resources and communication channels to help them adapt to a digital ecosystem?
  • People Engagement and Satisfaction: How engaged and satisfied is your workforce and what percentage of that has to do with their frustrations related to access to the right knowledge and information in the form of experts or resources?
  • People Resources: To what degree do you have the right knowledge, skills, and abilities to support a digital transformation effort?

These people-related success metrics point you in the right direction when starting to think about what to track overtime throughout the lifecycle of your KM digital transformation. To calculate the impact from a people-perspective, you would want to look at your workforce’s time-to-proficiency rate (the amount of time it takes a new hire or someone recently promoted to be productive in their role), your employee retention rate (the percentage in reduction of attrition each year that your digital transformation is in place), and the costs related to retraining individuals due to lack of easy access to the knowledge and information they need to be able to do their job the first time around.

A graphic showing each of the calculations you can make for people, technology, and content when proving the value of a KM initiative

Your KM digital transformation will require investment in technology and resources in and outside of your organization. When you compare that with the benefits and value you receive not only in terms of cost reduction and avoidance but also direct impacts to your bottom line, you can justify the business case for your KM efforts. Doing these simple calculations makes it clear that knowledge management efforts focused on digitizing a workplace is worth the investment. The question then becomes, how do you manage these efforts in a way that will yield the maximum results? Contact us at EK to learn more about how we support organizations with the KM digital transformation efforts. 

Mary Little Mary Little Mary Little is an expert advisor and management consultant in the area of knowledge management strategy and implementation. She ardently believes in the value of servant leadership, effective communication, human-centered design, and maximized talent potential as means to organizational change and success. More from Mary Little »