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The concept of knowledge management is relatively new. The shift from a post-industrial to a knowledge-based economy has altered the way organisations conduct business. Over the last few decades, discussions around the significance of data, information and knowledge have led to the realisation that formal knowledge management must take place within organisations. Although there is no fixed definition, knowledge management can be described as an effort to capture and facilitate the transfer of knowledge within an organisation. Whilst this is relevant to most industries, it is particularly crucial to the legal industry. Law is a practice of knowledge and skill that requires the accurate and effective use of data. So, what is the difference between knowledge, data and information? What constitutes knowledge management? This article, which is part one in a series on knowledge management, will explain the key components of knowledge management and provide examples of applications of knowledge management.

Knowledge, Data and Information

Data represents a set of facts and figures, which are out of context and unorganised. Data is objective and not meaningful until somebody processes it. Once data is processed, it becomes information. Information is an organised set of facts and data, contextualised and categorised for specific uses. There is often confusion between data and information because information is made out of data. The key difference is that information is organised and data is not. Knowledge constitutes what we know. This is a simple but effective definition. Knowledge is constantly changing: we learn new things and we forget things all the time. Knowledge is more than a compilation of facts. The human processes involved assimilate, understand and experience knowledge. Knowledge is what enables lawyers to give advice and solve legal problems. In other words, it is our understanding of legal information.
An example of data in the legal context is ‘341bii’. This sequence of numbers does not tell us much until we have information to connect it to a context, allowing us to decrypt and represent the information as a section of an Act: section 34(1)(b)(ii). Knowing this still has little value, unless we know to which Act the section belongs and what it does. Linking more information around this sequence of numbers creates knowledge about that Act, by converting data into information.

Two Pillars of Knowledge Management: Infrastructure and Processes

Knowledge management consists of two components: infrastructure and processes. Infrastructure relies on:
  • technology (whether the organisation has the appropriate software and competencies to build a knowledge management system); and
  • the organisation’s structure and culture (whether the organisation has the appropriate structure and culture to foster knowledge sharing. For example, how organisations implement knowledge management, whether organisations reward it and whether the culture is supportive of knowledge sharing).
The other pillar of knowledge management is process. Knowledge management includes four different processes:
  • acquisition (the collection of information);
  • conversion (the transformation of such information into effective knowledge);
  • application (where knowledge is applied to a specific purpose, such as improving efficiency); and
  • protection (the protection of knowledge from outsiders).
Infrastructure and processes go hand in hand. Effective processes are not possible without the right infrastructure, and the right infrastructure without processes has no purpose.

Applications of Knowledge Management

The most straightforward application of knowledge management is the development of capabilities. Knowledge management increases employees’ competencies and skills by facilitating access to and sharing of knowledge. 
For example, teaching and training programs develop capabilities through knowledge management.
Organisations can also use knowledge management for the purposes of asset management, as it enables the management of intellectual property
A document management system, for example, is a combination of infrastructure (IT software) and processes (collecting documents, labelling them to make them usable, password protecting the platform) that an organisation can use for knowledge management in that sense.
Trend forecast is another application of knowledge management. A customer relationship management system is an example of knowledge management that helps an organisation to discover trends and patterns within its customer base.

Key Takeaways

The key difference between data, information and knowledge is the degree to which basic facts have been processed. This process of interpretation is what knowledge management is trying to capture. In order to do so, knowledge management relies on two components:
  • infrastructure (including culture); and
  • processes.
A knowledge management initiative, such as a document management system or a relationship management system, typically comprises: 
  • an IT infrastructure supported by management; and
  • processes that help capture and distribute information effectively.

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