Measuring the benefits of knowledge management at the Financial Services Authority: a case study

Abstract

While many knowledge management case studies and theoretical texts list benefits to an organization of the implementation of a knowledge management strategy, the literature provides little evidence that systems have been devised to measure those benefits. This paper presents a case study that attempted to demonstrate the benefits of knowledge management by measuring its impact. This work was carried out in the in-house legal division of the UK’s Financial Services Authority over a period of 18 months. A measurement model was devised based on concepts adapted from the Balanced Scorecard. This was the knowledge management benefits scorecard. The scorecard took each objective of the division’s knowledge management strategy and listed knowledge management activities necessary to achieve each objective. Next, likely benefits to individuals and the division arising from each knowledge management activity were listed. Methods of collecting qualitative and quantitative measurements data were then devised. Results obtained showed that benefits arising from some knowledge management activities could be clearly demonstrated. However, activities that required individuals to change their behaviour or take time to learn new skills were more problematical. More time would be necessary to demonstrate the benefits of knowledge management conclusively.

Get full access to this article

View all access options for this article.

References

[1] T. Davenport and L. Prusak, Working Knowledge: how Organizations Manage what they Know ( Harvard Business School, Boston, MA , 1997).

[2] E. Orna, Practical Information Policies ( Gower , 1999).

[3] Financial Services and Markets Act 2000 s 2(2).

[4] Financial Services and Markets Act 2000 s 2(3).

[5] Measurement for Knowledge Management ( APQC , 2001).

[6] D.T. Skyrme, Knowledge Networking–Creating the Collaborative Enterprise ( Butterworth-Heinemann, Oxford , 1999).

[7] J MacDonald, It is advisable from the outset to set up a valuation team to establish standards and measurements for the valuation of the knowledge database, in Understanding Knowledge Management in a Week ( Hodder & Stoughton, London , 1999).

[8] R.S. Kaplan and D.P. Norton, Translating Strategy into Action: the Balanced Scorecard ( Harvard University Press, Boston, MA , 1996).

[9] T. Davenport, Process Innovation ( HarperCollins, London , 1993).

10.

[10] H.V. Andersen, G. Lawrie and M. Shulver, The Balanced Scorecard vs the EFQM Business Excellence Model–which is the Better Strategic Management Tool? ( 2GC Limited , 2000).

11.

[11] J. de Gooijer, Designing a knowledge management performance framework , Journal of Knowledge Management 4(4) (2000) 303–310 .

12.

[12] D. Nicholas, Assessing Information Needs: Tools, Techniques and Concepts for the Internet Age, 2nd edn ( Aslib, London , 2000).

13.

[13] M.K. Sparrow, The Regulatory Craft ( Brookings/CEG, London , 2000).