Is the Knowledge Management System Truly Cost Effective? Case Study of KM-Enabled Engineering Problem Solving

Abstract

Managers of construction organizations have long been faced with the essential question of whether the knowledge management system (KMS) is truly cost effective. Very few empirical studies have been conducted to measure the effective benefits of implementing knowledge management initiatives. A lack of quantitative measurement models, the difficulty of differentiating knowledge management (KM) from non-KM activities, the difficulty of evaluating the resultant KM activity values, and an unwillingness of organizations to reveal insights (aimed at shielding these insights from their competitors) are critical reasons for their absence from empirical reports. This paper reveals a five-year comprehensive benefit survey on the implementation of a specialized KMS, KM-enabled problem solver, at a major engineering consulting firm. In total, 868 emergency problem-solving scenarios recorded in the KMS were analyzed. Three that were most concerned with benefit indexes (time, cost, and staff hours) selected by the KM managers were measured. Results showed timeliness to be the most remarkable tangible benefit. Both staff hours and cost benefits were negative. Qualitative benefits were identified and addressed through focus group meetings with the KM managers. The KM approach was not suited to solving all types of engineering problems. Strategies should be taken to facilitate engineering problem solving, including development of a more proactive approach.