Knowledge Management Strategy for Virtual Organizations to Gain Competitive Advantage.

to Gain Competitive Advantage

Sar on K. Yef t a1, Indr a Gamayant o2

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St af Pengaj ar Jur usan S1 Si st em Inf or masi Fakul t as Teknol ogi Inf or masi

Uni ver si t as Kr i st en Mar anat ha

Jl . Pr of . Dr g. Sur i a Sumant r i No. 65, Bandung 40164 Emai l : sar on. ky@eng. mar anat ha. edu

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St af Pengaj ar Pr ogr am St udi S1 Si st em Inf or masi Inst i t ut Teknol ogi Har apan Bangsa

Jl . Di pat i Ukur 80-84 Bandung 40132 Emai l : gama@i t hb. ac. i d

Abst rak

E-busi ness bukanl ah i su yang bar u. Keber adaannya t el ah mendor ong or gani sasi t r adi si onal ber ubah menj adi or gani sasi vi r t ual . Wal aupun demi ki an, menur ut penul i s, t opi k i ni masi h memi l i ki i su pent i ng yang har us di ekspl or asi kar ena car a pandang yang ber beda mengenai t opi k i ni akan member i kan hasi l yang ber beda pul a. Hasi l yang ber beda t er sebut dapat di i mpl ement asi kan unt uk ber bagai si t uasi yang ber beda, sesuai hasi l peni l ai an t i m manaj emen. Or gani sasi har us memi ki r kan pemahaman pembuat an dan ut i l i t as knowl edge ser t a memper t i mbangkan kedua f akt or yang t ak dapat di pi sahkan t er sebut sebagai i nf r ast r ukt ur or gani sasi unt uk memaksi mal kan unj uk ker j a or gani sasi . Knowl edge management adal ah sebuah car a unt uk meni ngkat kan kapabi l i t as or gani sasi dal am mendayagunakan i nf or masi unt uk meni ngkat kan ef i si ensi dan pr odukt i vi t as. Agar dapat memahami dan mengekspl or asi l ebi h j auh car a knowl edge management membant u or gani sasi vi r t ual , penul i s mengumpul kan ber bagai i nf or masi dar i per pust akaan, dat abase onl i ne, buku-buku, dan hal aman web. Sel anj ut nya, unt uk dapat l ebi h menggambar kan keunt ungan-keunt ungan yang dapat di capai , ancaman, dan t ant angan yang di hadapi or gani sasi , penul i s menggunakan sebuah st udi kasus. Kasus t er sebut akan di gunakan sebagai pembandi ng dan pendukung t eor i , j uga unt uk menggambar kan si t uasi yang sesungguhnya dal am duni a nyat a.

Kat a kunci: Or gani sasi vi r t ual , Inf r ast r ukt ur or gani sasi , Ef i si ensi

1. Introduction

Int ernet has made product s (goods and services) int o l arger virt ual organizat ions t o be market ed by sel l ers and buyers. The product s can be easil y t raded worl dwide wit h no boundary or l imit at ion of geographical area. The t rading process is what Power (2001, p. 189) cal l s as sel l ing

mechanism. Buyers and sel l ers communicat e via Int ernet al l owing t he product s t o be bought and sol d over comput er net works. The principl e concept is t hat t he product s are purchased and paid f or over t he Int ernet and dist ribut ed by l ogist ics carriers t o t he buyers’ addresses. That onl ine buying, sel l ing, and paying is an int egral part of e-business.

The evol ut ion of Int ernet is growing rapidl y because more peopl e use Int ernet t o seek inf ormat ion (see Figure 1). From Turner’ s (2000, p. 8)

point of view, t he driving f act ors of t he rise of t he Int ernet are: reduced cost of t he t el ephone cal l s; t he spread of PC; t he spread of open st andard; and t he devel opment of onl ine services. Because of t he swif t dif f usion of t he Int ernet t echnol ogy, Int ernet has made a big change in t he business environment gl obal l y creat ing a new market f orm t o t rade f rom t radit ional business int o e-business t rade or virt ual organizat ions (see Figure 2a and Figure 2b). According t o McKie (2001, p. 69), Int ernet al so pl ays a

signif icant rol e as an int ermediary f or B2B (business t o business) and B2C (business t o consumer) in a way t hat Int ernet disint er mediat es t radit ional B2B and B2C rel at ionships t hen t he suppl y chains are reint ermediat ed by promot ing new t ypes of virt ual int ermediaries t hat rel y on it . Int ernet is connect ing businesses t o t he cust omers, part ners, suppl iers, and al so compet it ors.

Figure. 1. Int ernet Growt h Worldwide

Figure. 2a T radit ional Business

Figure. 2b. E-Business

Sour ce: Far r el l , et al . , 2001, ‘ E-busi ness@wor k’ , p. 3-4

2. The Advantages of E-business

According t o Amor (2000, p. 13), t he st rengt hs of e-business depend on t he st rengt hs on t he Int ernet , which are t he inf rast ruct ure can be expanded in t he f ut ure, t he avail abil it y of access f or 24 hours everyday and l ow cost as wel l . However what Amor want s t o show is t hat how Int ernet can change t he t opol ogy of business. Amor (2000, p. 14) reckons t hat t here are seven advant ages t hat can be obt ained by t he e-business organizat ions (see

Figure 3).

Delivery/Shipping

Customer sales support

Customer

Clicks and mortar vendor

Banking/Shopping /Cart/Validation

Supplier or Service Partner

Warehouse delivery agent

Web Shop E-Business

Sales agent or vendor

Bank, outsourcers

Customer Warehouse or

delivery agent Supplier or service

Figure. 3. Advant ages of E-Business

Sour ce: Amor , D. , 2000, ‘ The E-busi ness Revol ut i on’ , p. 14

3. Knowledge Management Implementation

Organizat ions shoul d be concerned in underst anding of knowl edge ut il izat ion and creat ion and consider t he t wo inseparabl e f act ors as an organizat ional inf rast ruct ure t o maximize t he organizat ional perf ormance. According t o Dut rénit (2000, p. 35), t he process of knowl edge creat ion is:

‘…t he cent er of at t ent i on and i ssues about t he management of knowl edge ar e pl ayi ng an i ncr easi ngl y i mpor t ant r ol e i n t he expl anat i on of t he ef f ect i veness of t hi s pr ocess’

Furt hermore, t he use of knowl edge management f acil it at es t he process of creat ion and enhancement of knowl edge f or t he devel opment of st rat egic t echnol ogical capabil it ies.

According t o t he American Product ivit y and Qual it y Cent er (1996, avail abl e at : ht t p: / / www. st ore. apqc. org/ report s/ Summary/ know-mng. pdf), knowl edge management is a set of st rat egy t o acquire t he right knowl edge t o t he right peopl e at t he right t ime and hel p t he individual s or groups t o share and use t he inf ormat ion int o act ion in a way t o enhance organizat ional achievement . Moreover, knowl edge management is a compl icat ed process t hat shoul d be reinf orced by a robust f oundat ion of enabl ers – st rat egy and l eadership, cul t ure, measurement , and t echnol ogy. Each enabl er shoul d be al igned t o generat e t he knowl edge process – procurement , present at ion, t ransf er, ut il izat ion, and removal (see Figure 4). To obt ain knowl edge, organizat ions shoul d be agil e in bal ancing t he

knowl edge management el ement s – peopl e (cul t ure), processes (cont ent ), and t echnol ogy. Abel l and Oxbrow (2001, p. 37) reckon t hat t hose el ement s have f ormed a knowl edge management phil osophy – t o manage t he knowl edge bal ance which f urt her det ermines an organizat ion and it s rel at ionship in t he market (see Figure 5).

Advantages of e-business

1. Gl obal accessi bi l i t y and sal es r each. Businesses can expand t heir cust omer base gl obal l y and even t heir product l ine.

2. Cl oser r el at i onshi ps. B2B sel lers shoul d be abl e t o const ruct cl ose rel at ionship.

3. Fr ee sampl er s. Product s can be sampl ed via t he Web quickly, easil y, and f ree of charge. 4. Reduced cost s. Businesses can minimize t he cost l y product ion by dynamical l y adj ust ing

prices.

5. Medi a br eaks. The Int ernet reduces t he number of media breaks which are needed t o t ransf er inf ormat ion.

6. Ti me t o mar ket . Short er t ime t o market and f ast er response t ime t o changing and compet it ive market demands.

7. Cust omer l oyal t y. Improved cust omer l oyal t y and service t hrough easier access t o t he newest inf ormat ion and a never cl osing sit e.

Knowledge Removal

„Identification of Old and Irrelevant Knowledge

„Removal of Knowledge from Active Repository

„Archiving of Knowledge

Knowledge Transfer

„Transmission of Knowledge

„Provision of Knowledge

„Searching and Finding of Knowledge

„Searching and Finding of Knowledge Owners

„Face-to-Face Knowledge Exchange

Knowledge Presentation

„Documentation of Knowledge

„Editing of Knowledge

„Structuring of Knowledge

„Linking of Knowledge

„Documentation of Knowledge Meta-Structures Knowledge Procurement

„External Procurement of Knowledge

„Creation of Knowledge

„Development and Improve-ment of Knowledge

„Updating of Knowledge

Knowledge Utilisation

„Application of Knowledge in Business Processes

Knowledge

Processing

Figure. 4. Knowledge Processing

Sour ce: Al l weyer , T. , 1997, A Fr amewor k f or Re-desi gni ng and Managi ng Knowl edge Pr ocesses, p. 5

Figure. 5 T he Knowledge Balance

4. The Advantages of Knowledge Management

The rol e of knowl edge management of f ers a number of benef it s f or organizat ions in devel oped or devel oping count ries. Radding (1998, p. 61) ident if ies many subst ant ial benef it s t hat knowl edge management of f ers, incl uding: prevent ion of knowl edge l oss; st rong decision-making; adapt abil it y and f l exibil it y; compet it ive advant age; asset devel opment ; product devel opment ; cust omer orient ed and; l everages invest ment s in human resource/ capit al (see Figure 6).

The Knowledge Balance

People/Culture

Technology Knowledge

Management Process/Content

Figure 6 Knowledge Management Advant ages

Sour ce: Raddi ng, 1998, Knowl edge Management , p. 60-61

5. Knowledge Management Benefits Tree

According t o Skyrme (2002, p. 1), t he use of t he benef it s t ree is t o show int er-correl at ions bet ween dif f erent t ypes of benef it . The use of t he benef it s t ree is import ant f or senior execut ives bef ore t hey invest because t he benef it s t ree wil l apparent l y describe an expl anat ion of t he bot t om l ine benef it s of knowl edge management . Commonl y, a knowl edge init iat ive is a base pl an where t he cost is obvious, but t he benef it s are dispersed int o t he organizat ion. A benef it s t ree connect s t he immediat el y obvious benef it s, t hrough a series of ways t o t hose underst ood by senior execut ives (see Figure 7).

Knowledge management advantages

1. Prevent ion of knowl edge l oss – enabl es an organizat ion t o ret ain crit ical expert ise and prevent crit ical knowl edge l oss resul t ing f rom ret irement , downsizing, empl oyee depart ures, et c.

2. Improved decision making – decisions are made f ast er wit h great er qual it y and al so can be made at a l ower l evel in t he organizat ion.

3. Adapt abil it y and f l exibil it y – st af f s can work in cross-f unct i onal sit uat ions and t he organizat ion i mproves empl oyee moral e.

4. Compet it ive advant age – enabl es t he organi zat ions t o f ul l y underst and it s cust omers, prospect s, market , and t he compet it ion, t hereby enabl ing t he ident if icat ion of compet it ive gaps and opport unit ies.

5. Asset devel opment – improves t he organizat ion’ s abil it y t o capit al ize on l egal prot ect ion f or int el l ect ual propert y.

6. Product improvement – val ue of product s is increased in direct proport ion t o t he degree and qual it y of knowl edge in t he product .

7. Cust omer management – enabl es organizat ions t o sharpen cust omer f ocus and service. Increased cust omer knowl edge expedit es response t o cust omer queries, suggest ions, & compl aint s. It al so ensures t he consist ency and qual it y when servicing cust omers.

8. Leverages invest ment s in human capit al – organi zat ions can bet t er l everage t heir invest ment in hiring and t raining workers such as t he abil it y t o share l essons l earned, document

Figure. 7 Benef it s T ree

Sour ce: Skyr me, 2002, KM Benef i t s Tr ee

6. Information and Communications Technology (ICT)

The devel opment of ICT has produced opport unit ies and chal l enges. According t o Abel l and Oxbrow (2001, p. 52):

‘…t he use of ICT enabl es vi r t ual wor ki ng t hat i s al most aki n t o si t t i ng ar ound t he t abl e t oget her . But onl i ne wor ki ng needs car ef ul f aci l i t at i ng and l eader shi p. It r equi r es new ski l l s and mi ndset s, and whi l e i t al l ows mor e i ncl usi on f or some i t pr esent s bar r i er s f or ot her s. Par adoxi cal l y, col l abor at i ve sof t war e enabl es peopl e i n one r oom t o wor k cr eat i vel y t oget her by chal l enge i deas, and vot e f or out comes, anonymousl y, t hus al l owi ng t he gr oup t o have a f r ank di scussi on wi t hout i ndi vi dual s f eel i ng i nhi bi t ed by t hei r l ack of conf i dence or st at us. ’

Earl y appl icat ions of t echnol ogy of f ered t he prospect of increased product ion and l ess rel iance on human. The int egrat ion of communicat ions and inf ormat ion t echnol ogy int roduces opport unit ies t o operat e in new market s, change ways of working, del iver dif f erent product s, and maybe t o devel op business rel at ionships wit h a variet y of suppl iers. ICT enabl es f l exibil it y, al l owing inf ormat ion t o be exchanged across geographical and t ime barriers. Virt ual organizat ions, mobil e work f orces, and innovat ive part nerships have al l been dif f used by ICT. ICT al so brings new probl ems, f or exampl e, t echnical direct ors and t echnical st af f argue t o ut il ize a compat ibl e IT pl at f orms and sof t ware appl icat ions t o enhance f ast er and cheaper communicat ion.

7. Virtual Organizations

ICT has made a new f orm of business named virt ual organizat ions. Skyrme (1999, p. 1) has def ined t he virt ual organizat ion as t he organizat ion dif f used geographical l y and organizat ional work is dist ribut ed t hroughout el ect ronic communicat ions. Many smal l er organizat ions or even st art -up companies are now concerning about t he advant ages of becoming or maybe as a part of a virt ual organizat ion, which can give t hem t he benef it s of t he dif f erent resources of a l arge organizat ions whil e f ocusing on t he st rengt h and agil it y of t he smal l one. Furt hermore, Skyrme al so specif ies t he advant ages t hat virt ual organizat ions of f er. The advant ages of virt ual organizat ions are: [ 1] provide access t o a wide a range of specif ic resources, [ 2] shoul d enabl e t o present a unit ed f ace t o big corporat e cust omers, [ 3] t he organizat ions can keep concent rat ed t o operat e on t he niche skil l s, and [ 4] easiness t o reshape and change personnel based on t he proposed t ask or proj ect .

8. People, Process, and Technology

The t hree inseparabl e el ement s of knowl edge management – t echnol ogy, peopl e, and process – are pl aying an import ant rol e f or t he success of t he virt ual organizat ions. First , t he knowl edge in t echnol ogy shoul d be abl e t o produce many benef it s t o users (easiness, pract ical it y, f unct ional it y) and dif f erent iat e wit h ot her current product s compet it ivel y. Second, t he knowl edge in peopl e, peopl e in an organizat ion is considered as t he most val uabl e asset because peopl e act as t he mot ivat or t o invent innovat ive ideas and generat e t he work process. Third, t he knowl edge in process can be il l ust rat ed as t he st ruct ure – vert ical or horizont al – of t he organizat ion, t he way t he empl oyees work t oget her in an compl ex sit uat ion, and if t he organizat ion has a f l exibl e management t hen can be wel l adapt ed t o t he dynamic of changes, because no mat t er what changes wil l appl y.

9. The Success of Virtual Organizations

Today's business environment demands a new phil osophy f or accompl ishing t asks. The success of virt ual organizat ions principal l y is in t he hand of t he st af f (t eams) t hat run t he j ob. Managers shoul d heavil y mot ivat e t he t eams t o produce new ideas or process t o f ast en t he work. As t echnol ogy workers

cont inue t o become un-t et hered, of t en wit hout warning t o t he ent erprise and it s IT inf rast ruct ure, it is increasingl y t he responsibil it y of t he ent erprise t o provide t he educat ion and change management necessary f or t he empl oyee's success in a virt ual environment . IT execut ives shoul d ensure t hat t he appropriat e educat ion and compet encies are devel oped among it s core st af f t o l everage t he f ul l pot ent ial of a successf ul virt ual t eam (Ader, M. , 2003).

Successf ul virt ual t eams invol ve a st rong combinat ion of peopl e, process, and t echnol ogy. For peopl e t o work seaml essl y across boundaries, dist ance, and t ime, col l aborat ion t ool s and services t o cat al yze product ivit y must be readil y avail abl e. IT execut ives shoul d eval uat e t ool s f rom emerging prof essional services aut omat ion (PSA) vendors, proj ect management and col l aborat ion pl ayers, as wel l as l eading audio and video st reaming t echnol ogy t hat can support t he act ivit ies of a virt ual t eam (Hasel korn, M. , 1998).

10. Challenge and Solution in Knowledge Management

Al t hough knowl edge Management can become a good st rat egy in many organizat ions t o achieve compet it ive advant age in compet ing wit h ot hers, it al so present s signif icant chal l enges t o t he organizat ions especial l y t o managers and IT prof essional s. The compl exit y in def ining t he most suit abl e knowl edge management model , ref ining inf ormat ion, choosing t he most appropriat e t echnol ogy are t he exampl es of issues t hat f ace by organizat ions. However t hough t he probl ems are a l ot , it doesn’ t mean al l t he organizat ions f ace t he same issues. The issue wil l depend on t he organizat ions t hemsel ves, what is t he core business and how t he organizat ion runs t he act ivit ies (KMWorl d, 2002).

11. Distributing Information

How t o dist ribut e and del iver t he inf ormat ion is one of t he issues which have impact organizat ion great l y. Spreading t he inf ormat ion among workers in organizat ion, t o ot her branches of organizat ions and col l aborat ed organizat ions can det ermine t he f ait h of organizat ion it sel f . Speed of dist ribut ion and avail abil it y of inf ormat ion are t he t hings t hat organizat ions t ry t o sust ain and achi eve. Bef ore considering a way of dist ribut ing t he inf ormat ion, organizat ions have t o underst and cl earl y f irst , what kind of inf ormat ion t hose organizat ions have. According t o Vice President of Hummingbird Lt d. , Pet er Audit ore (KMWorl d, 2002), t here are t hree t ypes of inf ormat ion in an organizat ion, which are;

ƒ Expl i ci t Knowl edge, knowl edge t hat can be ext ract ed f rom books,

document s, email s and dat abases. This is t he easiest way t o get and gat her knowl edge in an organizat ion.

ƒ Embedded Knowl edge, knowl edge t hat f ound during running

ƒ Taci t Knowl edge, undocument ed knowl edge. This kind of

knowl edge is avail abl e inside t he head of workers and can be spread among t hem via mout h t o mout h.

Af t er underst anding what kind of knowl edge an organizat ion has, t hen managers and IT prof essional have t o t hink t he scope of inf ormat ion dist ribut ion. There are t wo scope of inf ormat ion dist ribut ion, which are

di st r i but i on of i nf or mat i on among wor ker s i n an or gani zat i on and di st r i but i on of i nf or mat i on t o t he vi r t ual or gani zat i on wor l dwi de (Int ranet

Journal , 2003).

12. Distribution of Informat ion among Workers in an Organization(focus

on people)

Sharing inf ormat ion among workers in an organizat ion isn’ t a new probl em in knowl edge management issue however it is st il l exist . One of t he ways t hat used nowadays is Int r anet t echnol ogy. Research has al ready

demonst rat ed t hat Int ranet t echnol ogy has showed signif icant increase in ef f iciency and product ivit y of an organizat ion. And al so t here is signif icant correl at ion bet ween int ranet and j ob sat isf act ion (Int ranet Journal , 2003). Int ranet t echnol ogy can bring a l ot of benef it in dist ribut ing knowl edge management . Of course cost of t he t echnol ogy is one of t he benef it s however it ’ s not t he onl y advant age t hat organizat ion seeks. Int ranet can al so benef it worker in many ways such as a t ool of communicat ion not onl y bet ween workers and organizat ion but al so among t he workers. Int ranet t echnol ogy al l ows workers t o access knowl edge f rom organizat ion nevert hel ess, not onl y has t hat Int ranet st il l had ot her advant ages (see

Figure 8) but al so hel p workers t o communicat e each ot her especial l y in

dist ribut ing t acit knowl edge which is very hard t o be document ed by organizat ion (Int ranet Journal , 2003).

Intranet Features/ Advantages

• Focuses on user needs — not t echnology promises

• Direct l y support s t he organizat ion's goal s and processes

• Enabl es col l aborat ion and communit ies

• Inspires l earning, innovat ion and new t hinking t hrough sharing best pract ices

• Promot es and del ivers bot t om-l ine result s

Figure. 8. Int ranet Feat ures/ Advant ages

Source: Int ranet Journal (2003), ‘ Knowl edge Management and Int ranet s: Put t ing Peopl e’ , avail abl e at :

13. Distribution of Informat ion to the Virtual Organization Worldwide (focus on technology)

The power of Int ernet and web t echnol ogies has become a new paradigm of inf ormat ion sharing. By using Int ernet , an organizat ion can share t he inf ormat ion t o al l corners of t he worl d. It means t hat t he act of sharing inf ormat ion t o virt ual organizat ion emphasizes t he use of t echnol ogy. Unconsciousl y, organizat ions wil l f ocus more on t echnol ogy t han t he inf ormat ion it sel f (Int ranet Journal , 2003).

Ent erprise inf ormat ion port al is t he f orm of f ut ure knowl edge management t hat want s t o be achieved by many organizat ions. Al l t he inf ormat ion and business int el l igence around t he worl d wil l be brought t oget her and become a key rol e in empowering virt ual ent erprise. By providing an easy and personal ized access, rel evant inf ormat ion can be shared t o al l peopl e who can enabl e peopl e t o make a f ast er and bet t er decision. Not onl y has t hat , Ent erprise inf ormat ion port al (EIP) can incorporat ed st reaming audio and video t o enhance t he capabil it y of e-l earning and e-t raining el ement s t hereby pot ent ial l y reducing overal l organizat ion cost (KMWorl d, 2002). There are several t echnol ogies t hat can be used t o enhance t he dist ribut ion of inf ormat ion around t he worl d via Int ernet (see Figure 9 f or

Figure 9 T echnologies t hat can be used t o enhance t he dist ribut ion of inf ormat ion around t he world via Int ernet

Sour ce: KMWor l d (2002), ‘ Enabl i ng Knowl edge Management i n Today’ s Knowl edge Economy’ , Januar y 2002, avai l abl e at :

ht t p: / / www. kmwor l d. com/ publ i cat i ons/ whi t epaper s/ BCI/ audi t or e. pdf

14. Classifying and Indexing Explicit Information

As ment ioned bef ore, in an organizat ion, t here are t hree t ypes of inf ormat ion; which are expl icit knowl edge, embedded knowl edge and t acit knowl edge. Though al l t he inf ormat ion can be ident if ied at t his t ime, it doesn’ t mean t here wil l be no more inf ormat ion. Inf ormat ion in an organizat ion wil l increase by t he t ime goes. The bigger an organizat ion t he more inf ormat ion it needs and t here is a habit f or l arge organizat ions t o document al l t he inf ormat ion f or ref erences and ot her needs.

B2E Enterprise Information Portal

Provides a singl e point of access t o al l rel evant inf ormat i on and appl icat ions, whil e al so f unct ioning as a gat eway t o communit ies of int erest , best pract ice et c. EIPs can al so f unct ion as a pl at f orm f or knowl edge net wor ks.

Federated Search

The abil it y t o search across al l or ganizat ional st ruct ured (dat abases) and unst ruct ured (document s, records, emai l s, video & audio f il es, et c) inf ormat i on sources.

Taxonomy, Classification and Indexing of Information Sources

Indexing of inf or mat ion resources and est abl ishment and/ or aut omat ion of an inf ormat i on t axonomy f or indust ry-specif ic or organizat ional l y specif ic inf or mat ion.

Document/ Information Management Systems

Organizat ion and archiving of document s, emai l s, f il es, il l ust rat ions, pol icies, pr ocedures, records, audio f i l es, video f il es et c.

Collaborative eCommerce Application Environments and/ or Workspaces Enabl e organizat ions t o easil y creat e virt ual proj ect t eam rooms, and/ or communit ies of best pract ice by al l owi ng t eam members t o col l aborat ivel y devel op and st ore document s, t asks and schedul es in a secure virt ual environment .

Simultaneous Collaboration

Al l ow workgroups and proj ect t eam member t o share inf ormat ion in real -t ime. Business Process Mgt. and Community of Interest Building

Facil it at es best pract ices and communit y of int erest buil ding by l everaging an EIP f ront end wit h t hreaded discussion groups and col l abor at ive t echnol ogi es t hrough an EIP. Intelligent Agents—web crawlers, “ knowbots”

Enabl e rel evant i nf ormat i on derived f rom aut omat ed searching t o be pushed t o t he deskt op or added t o a reposit ory.

Network News & Threaded Discussion Groups

One of t he f irst t echnol ogies of t he web t o be empl oyed as a KM syst em f or sharing inf ormat i on on proj ect s and t opics. Can al so serve as a key t echnol ogy f or f acil it at i ng e-ment oring.

Chat/ Instant Messaging

A t echnol ogy t hat evol ved f rom Int ernet Rel ay chat , enabl es real -t ime person-t operson int eract ion.

Automated Community-building Software

A new cl ass of sof t ware t hat aut omat ical l y buil ds communit ies of i nt erest by prof il ing email and document s.

Visualization Software for Information Systems

A new cl ass of sof t ware t hat provides more int uit ive and easier int erf ace f or navigat ing inf ormat i on syst ems incl uding web sit es. This new way of viewing inf ormat i on

can signif icant l y enhance inf ormat ion discovery and access. Expert Systems

Anot her new cl ass of sof t ware t hat connect s organizat ional expert s wit h ot her members of t he communit y by asking quest ions l ike who knows about t his?

The probl em wil l occur when an organizat ion got a l ot of inf ormat ion. Bef ore an organizat ion can share t he inf ormat ion, al l t he inf ormat ion has t o be sel ect ed and cl assif ied t o ease workers t o f ind inf ormat ion. To sel ect and cl assif y usef ul inf ormat ion isn’ t an easy j ob t o do. However t here are several t echnol ogies can be used t o hel p manage t he inf ormat ion, which are (KMWorl d, 2002);

• Inf or mat i on Management Syst em, a syst em which f acil it at es t he

organizat ion, indexing, cl assif icat ion of document s, cont ent and digit al asset s such as audio and video f il es, il l ust rat ions, records et c.

• Busi ness Int el l i gence, Formerl y used as decision support by many

organizat ions t o manage dat a warehousing, f inancial inf ormat ion f or rout ine dat a anal ysis, st andard report writ ing and dat a mining. However, now, it is al so used t o cl assif y and arrange inf ormat ion.

15. Over promising Myths about Knowledge Management

Knowl edge management can hel p an organizat ion t o gain more benef it such as increase ef f iciency and product ivit y however it doesn’ t mean t hat knowl edge management can do everyt hing. There is a misunderst anding misguided by over promising of advant ages of knowl edge management . According t o Hil debrand (Knowl edge Management Forum, 2002), t here are t hree dominant myt hs in using knowl edge management . There are:

ƒ Knowl edge management t echnol ogi es can del i ver t he r i ght i nf or mat i on t o t he r i ght per son at t he r i ght t i me. In real it y,

t echnol ogy is a t ool t o del iver t he inf ormat ion however it cannot ensure t hat t he right peopl e wil l get t hat inf ormat ion. Though it ’ s a f act t hat t echnol ogy can increase t he possibil it y t hat right peopl e can receive right inf ormat ion however Peopl e t end t o t hink t hat by adopt ing t he most updat ed t echnol ogy can ensure right peopl e t o receive t he rel evant inf ormat ion.

ƒ Knowl edge management can st or e human i nt el l i gence and exper i ence. Technol ogies such as dat abase can st ore inf ormat ion

in f orm of bit s and pixel s but it cannot st ore t he rich schemas t hat peopl e possess f or making sense of dat a bit s. The dat a ret rieved by dif f erent person can resul t dif f erent scenarios in handl ing an event .

ƒ Knowl edge management can di st r i but e human i nt el l i gence.

Again, organizat ion t ends t o t hink by document ing al l t he inf ormat ion, it supposes t o document t he int el l igence of a person. And by passing t he inf ormat ion, it means t hat ot her peopl e can def init el y sol ve same probl em. It ’ s a wrong percept ion. Document ed inf ormat ion onl y can be used as comparison bef ore execut ing a pl an.

Bef ore embarking t o use knowl edge management , an organizat ion has t o check t he purpose t hat want s t o be achieved by using knowl edge management and not t o bel ieve on t he percept ion of what knowl edge management of f ers (Knowl edge Management Forum, 2002).

16. Case Study: Caterpillar Inc. Fends off Competit ion

Cat erpil l ar Inc. (CAT) of Peoria, Il l inois, is a worl d l eader in manuf act uring heavy machinery. In 1982, t he company ent ered a dif f icul t period. Komat su of Japan, a maj or compet it or, was of f ering bul l dozers in t he Unit ed St at es at prices 40 percent l ower t han CAT’ s. Cat erpil l ar was f orced t o cut prices. A poor economy and a l engt hy l abor st rike worsened t he sit uat ion. By 1985, t he accumul at ed l osses amount ed t o $953 mil l ion. Cat erpil l ar, which sel l s it s product s al l over t he worl d, responded t o t he downt urn in al l t he usual ways: it cl osed pl ant s, l aid of f workers, and sl ashes expense. But t he usual did not work: market share decl ined and l oses increased.

The manager of CAT decided t hat t he have t o impl ement ed a st at e-of -t he-art inf ormat ion t echnol ogy. CAT woul d not be gl obal l y compet it ive wit hout it . The f irst phase of t he inf ormat ion t echnol ogy proj ect l ast ed eight years and cost $2 bil l ion. What did it accompl ish? Comput er-int egrat ed manuf act uring (CIM), a dream at many companies, is a real it y at CAT. Robot s, comput er-aided design, and comput er-aided manuf act uring are f unct ioning t hroughout t he various pl ant s. These and ot her comput erize syst ems resul t ed in in-process invent ory reduct ions of 60 percent and savings of several mil l ion dol l ars. Nonessent ial l abor was el iminat ed, product ion processes were simpl if ied, cost l y pl ant s and warehouses were cl osed, l ead t ime t o buil d a product was reduced f rom 45 days t o 10, and on-t ime del iveries t o cust omers increased by 70 percent . Modern management t echniques, such as a comput erized Mat erial s Requirement Pl anning II, were inst al l ed, and comput erized purchasing and l ogist ics syst ems were put int o operat ion. A sophist icat ed syst em f or managing repairs and providing repl acement part s t o deal ers and cust omers was inst al l ed. This syst em enabl ed deal ers t o provide part s t o t heir cl ient s quickl y yet maint ain l ow invent ories.

Some ot her import ant IT appl icat ions at CAT are t hese:

ƒ A gl obal net work wit h 7, 000 t erminal s connect s 50, 000 empl oyees and 180 deal ers in 1, 000 l ocat ions (Cat erpil l ar uses bot h it s f iber opt ic net work and a l eased sat el l it e services). This net work is used f or an EDI, f or t he Int ernet , f or ot her t el ecommunicat ions appl icat ions, and int ranet act ivit ies.

ƒ An execut ive inf ormat ion syst em enabl es business unit s t o anal yze dat a, ident if y t rends, and eval uat e each deal er’ s perf ormance.

ƒ CAT’ s deal ers and suppl iers are on an EDI syst em.

ƒ The t el ecommunicat ion syst em incl udes a “ CAT TV” l ink t o deal ers, as wel l as audio and video t el econf erencing capabil it ies.

ƒ Ninet y-f ive percent of t he company’ s empl oyees can access dat a on t he company’ s ent erprisewide syst em (an int ranet ).

ƒ A worl d-cl ass repair and part invent ory syst em was devel oped.

The IT proj ect support ed a massive reengineering of t he company. By 1993, Cat erpil l ar had become st ronger t han it s compet it ors, cont rol l ing more t han 30 percent of t he U. S. const ruct ion equipment market . The f irm was abl e t o export more t han hal f it s sal es t o f oreign buyers yet keep it s manuf act uring pl ant s and t he j obs in t he Unit ed St at es. For it s ef f ort s, CAT was a winner of Inf ormat ion Week’ s 1991 “ Excel l ence in IS” award. And what about CAT’ s chief rival : Komat su of Japan? Komat su shif t ed it s const ruct ion-equipment st rat egy away f rom bul l dozers in order t o avoid head-t o-head compet it ion wit h CAT.

Source: Turban, E. , Mcl ean, E. and Wet herbe, J. 2001, Inf or mat i on Technol ogy f or Management , John Wil ey & Sons, Inc. , USA.

16. 1.The Impact of Informat ion and the New Economy

Cat erpil l ar (CAT) is f acing t he compet it or f rom t he ot her part of t he worl d because of t he gl obal izat ion. They compet ed in t he same market t hat is become t he gl obal market . Komat su of Japan is t he main compet it or who ent ers t o US market t o compet e wit h CAT and of f er t he bul l dozers wit h f ort y percent l ower t he price t han CAT of f ered. CAT must cut down t heir product s price t o be abl e t o compet e wit h Komat su but it is not a good st rat egy. They al so f acing a poor economy and at t he same t ime, t he l abor st rike make t he sit uat ion even more worst . The Cat erpil l ar l ost amount of $953 mil l ion by 1985 and t hey have t o l ay of f t heir empl oyees and al so cut down t he expense as t hey next st rat egy. However, t his st rat egy does not respond in posit ive t o t he company, market share st il l pl unge whil e t he l osses are increasing. It can be seen t hat t he CAT who normal l y in t he l eader posit ion are f acing t he probl em of new economy in t heir home count ry t hat is impossibl e in t he past . Komat su got t he benef it of cheaper raw mat erial s and l ow l abor cost of manuf act ure is Asia become t he main compet it or when t hey ent er t o t he gl obal market and can of f er t he cheaper product t o t heir cust omers. Cat erpil l ar need t o change t heir st rat egy t o be abl e t o compet e wit h it s compet it or and sol ve al l t he probl em t hat occur due t o t he gl obal izat ion and t he new economy t hat t he ot her int ernat ional or virt ual f irm become t he maj or compet it or in t heir own home count ry.

16. 2.The Challenge

The chal l enge is, t o impl ement t he new inf ormat ion t echnol ogy t o enabl e knowl edge management , company have t o spend a huge amount of money f or t he t echnol ogy t hat is very expensive especial l y when t he company are

be sure t hat when wil l t he company can get t he ret urn f rom t hose invest ment and t he sit uat ion wil l not even worsen. However, t he manager of t he Cat erpil l ar decided t he st rat egy t o impl ement t he inf ormat ion t echnol ogy as t he enabl er of t he inf ormat ion management t o sol ve t hose probl ems. They al so agree t hat CAT is impossibl e t o compet e wit h gl obal compet it or wit hout using t he inf ormat ion t echnol ogy. The IT woul d be a great t ool t o gat her t he inf ormat ion t hat necessary t o improve t heir product s, services, enabl e knowl edge sharing and a t ool f or making connect ions wit h it s suppl iers and cust omers and t hey can al so gain t he inf ormat ion about t heir compet it or as wel l . So, t hey set up t he inf ormat ion t echnol ogy proj ect wit h eight years period and it cost about $2 bil l ion dol l ars.

16. 3.The Solution

Cat erpil l ar impl ement ed t he comput er-int egrat ed manuf act uring (CIM) t hat is t he concept of impl ement at ion of various int egrat ed comput er syst em in f act ory aut omat ion and it consist s of t hree basic goal s t hat are simpl if icat ion, aut omat ion and, int egrat ion and coordinat ion (Turban & Mcl ean & Wet herbe, 2001 pp. 346-347). They al so impl ement t he robot ics, and many kind of comput er based appl icat ions. The resul t of t his impl ement at ion has shown in decrease about 60 percent of t he in-process invent ory and it hel p cat erpil l ar save several mil l ions of dol l ar. The number of worker t hat not necessary was el iminat ed t o reduce t he expendit ure as same as t hat t he cost l y pl ant s and warehouses were cl osed. The product ion processes were simpl if ied so t hat t he t ime in buil d up a product was decrease f rom about one and a hal f mont h f rom t he previous t o nearl y j ust one week and in t his way, it hel ps cat erpil l ar del iver it s product t o t he cust omer more rapidl y. The on-t ime del iveries t o cust omers improved about 70 percent . The Cat erpil l ar al so used new management t echniques such as a Comput erized Mat erial s Requirement Pl anning II and comput erized purchasing and l ogist ics syst ems were put int o operat ion. Cat erpil l ar al so set up t he syst em t o manage t he repairs and provide t he spare part f or repl acement t o it s deal ers and cust omers. This syst em hel p support t he deal er in providing part s t o t heir cust omers more rapidl y and al so sust ains l ow invent ories.

Cat erpil l ar al so gain t he benef it of t he Int ernet by connect ed al l of t heir branches t oget her as a gl obal net work. They connect ed t housands of t erminal s and al l of t heir empl oyees and more t han hundreds of t heir deal ers f rom t housands of l ocat ions t oget her. This net work is used f or an EDI (el ect ronic dat a int erchange), f or t he Int ernet , f or ot her t el ecommunicat ions appl icat ions and int ranet act ivit ies. This is a great t ool t o enabl e knowl edge sharing by connect one of f ice t o anot her in dif f erent pl aces around t he worl d t o share t he inf ormat ion t oget her and t he empl oyees can al so share t he usef ul inf ormat ion and t he experience t o ot her col l eagues. The manager f rom dif f erent part of t he worl d can provide t he usef ul inf ormat ion of t he sit uat ion and t he market change

environment t o t he head quart er t o decide and adapt t heir st rat egy more rapidl y and al so more ef f ect ivel y t o mat ch wit h t he sit uat ion and respond t o t he new environment quickl y. In t his way, CAT wil l be more f l exibl e t o adapt it sel ves t o t he ext ernal environment .

Cat erpil l ar al so used t he execut ive inf ormat ion syst em t hat hel ps t he manager t o anal yze t he inf ormat ion and al so eval uat e t he deal er’ s perf ormance. The execut ive inf ormat ion syst em hel ps t he manager t o make more ef f ect ive decision. It has great l y increased t he avail abil it y and appl icabil it y of inf ormat ion and ought t o provide a maj or cont ribut ion t o t he sense of great er conf idence, cert aint y, and reduce risk in making t he decision (Rit chie & Brindl ey, 2001). The execut ive inf ormat ion syst em can hel p manager of CAT anal yze t he inf ormat ion and f ind t he rel evant sol ut ion f or t he probl em.

The Cat erpil l ar is now using t he EDI syst em wit h it s suppl iers and deal ers. There are several of benef it s t hat CAT can gain f rom t his syst em. The EDI enabl e t hem t o send and receive l arge amount s of rout ine t ransact ion inf ormat ion rapidl y around t he worl d (Ward & Peppard, 2002 p. 270). In t his way, t he EDI syst ems hel p CAT t o t rade wit h ot hers deal er and cust omers around t he worl d wit hout boundaries, it is not t ime consuming and it is very f ew errors in t he t ransf ormed dat a as a resul t of comput er t o comput er dat a t ransf er. EDI can al so hel ps CAT t o access t he deal ers and cust omers dat abase t o see t he needs of product and spare part s if t here are l ow st ock so t hat t he Cat erpil l ar can provide t he product on t ime f or t he cust omers and deal ers. In t he same way, it can hel p creat e t he sense of part nership rel at ionship since it invol ves a commit ment t o a l ong-t erm invest ment and t he ref inement of t he syst em over t ime. As a resul t , it wil l hel p make t he barrier t o ot her compet it or t o gain access t o t he dist ribut ion channel and prevent t hem f rom ent ering t he market (Thompson 1998, p. 78).

So, it can be seen t hat in t his inf ormat ion age, t he gl obal izat ion makes change of l ocal l y t radit ional l y business t o become t he e-business worl dwide. An int ernat ional f irm can do t he business across t he boundaries. The Int ernet hel ps t he f irm t o gain t he inf ormat ion about t he market of t he ot her part of t he worl d t o invest . Komat su of Japan sees t his opport unit y t o l aunch t heir product s in US market and t hey have t he advant age of t he cheaper product because of cheaper mat erial s and l ower l abor cost t han Cat erpil l ar. The Cat erpil l ar Inc. real izes t he probl em and t hey had impl ement ed t he inf ormat ion t echnol ogy (IT) as an inf rast ruct ure t o support t he dat a gat hering and al so manage t heir inf ormat ion. Many inf rast ruct ures had been set up t o make t he benef it t o t he f irm and t o gain compet it ive advant age over it s compet it or. To acquire t he t echnol ogy, CAT are f aced wit h t he chal l enge t hat is t o purchase t he IT inf rast ruct ure,

not exact l y know t hat when wil l t hey get t he ret urn and benef it f rom t he invest ment . However, CAT manager underst and t he need f or inf rast ruct ure t hat wil l enabl e t he knowl edge management t hat is very vit al l y t o compet e wit h gl obal compet it or.

Cat erpil l ar had impl ement ed t he inf rast r uct ure such as CIM syst em and so f ort h. A gl obal net work has been creat ed t o t ransf er t he import ant inf ormat ion bet ween t he company, deal ers and cust omers al l around t he worl d. In t his way, t he net work generat ed t he share of import ant inf ormat ion such as t he quant it y of product in st ock t o hel p CAT del iver t he product on t ime. Cat erpil l ar can al so know t he need of spare part s and t he l ead t ime t o produce t he goods wil l be reduced. The net work can be use as a t ool t o share t he knowl edge bet ween col l eague eit her in t he same of f ice or t he ot her count ries. It is al l ow t he co-worker t o communicat e wit h each ot her f or sharing t he inf ormat ion t o sol ve t he probl em, share experience, ask f or an advice, share t he inf ormat ion about t he market environment so t hat t he company can handl e t he change rapidl y and so f ort h. Cat erpil l ar can benef it f rom t his knowl edge sharing and it wil l provide t he compet it ive advant age t o t he organizat ion. Cat erpil l ar al so used t he execut ive inf ormat ion syst em t o anal yze t he inf ormat ion t hat has been col l ect ed t o make t he f urt her decision t o expand t heir operat ion or t o sol ve t he specif ic probl em and al so predict t he f ut ure environment . This syst em can reduce t he risk and reduce t he uncert aint y of t he sit uat ion and it can al so hel p CAT t o gain t he compet it ive advant age as wel l .

Anot her import ant syst em is EDI syst ems. Cat erpil l ar can gain l ot s of benef it s of manage t heir inf ormat ion by using t his syst ems. They can send and received a huge amount of rout ine dat a especial l y t he t ransact ion t o al l over t he worl d and it is very f ast , l ess error and it can al so hel p t he company t o access t he dat abase of it s business part ners t o make an appropriat e support t o t hem. In t his way, it can hel p creat e t he commit ment and t he part nership t o t he cat erpil l ar and prevent ot her compet it or t o gain access t o t he dist ribut ion channel . Thus, al l of t he benef it above can prove t hat t he Cat erpil l ar gain t he compet it ive advant age over it s compet it or by using t he inf ormat ion t echnol ogy t o enabl e t he knowl edge management t o t he f irm and t o be abl e t o compet e wit h t he dynamic change of business environment in t he new int ernet base economy of t he worl d t oday.

Conclusion

E-business is an int erest ing way f or business t o earn more prof it and ef f iciency. Though t here are a l ot of benef it t hat can be gained f rom e-business, it ’ s a wise decision t o l ook at t he negat ive sides such as t hreat s, obst acl es et c. In order t o gain t he benef it s, companies or organizat ions t hat wish t o impl ement Int ernet as part of t heir businesses act ivit ies have t o l ook bot h t he advant ages and t hreat s or obst acl es t hat have t o be f aced.

Knowl edge management is a met hod of t he creat ion, capt ure, organizat ion, access and use of organizat ions int el l ect ual capit al on consumers, market s, goods (product & services), and int ernal processes (Abel l and Oxbrow, 2001, p. 33). It is a powerf ul way t o hel p an organizat ion or company t o at t ain compet it ive advant ages in compet ing wit h ot her companies. The impl ement at ion of knowl edge management has successf ul l y encouraged t he cont inuance of many organizat ions t o achieve goal s. The charact erist ics of successf ul organizat ions t hat impl ement knowl edge management are conservat ism in f inancing, sensit ivit y t o t he environment , sense of cohesion and company ident it y among st af f s and, t ol erance of new ideas, circumst ances, and changes.

Though knowl edge management can bring a l ot of benef it , at t he same t ime, it al so brings probl ems. The probl ems depend on t he organizat ions t hemsel ves, what is t he core business and how t he organizat ion runs t he act ivit ies. Basical l y, t he probl ems of using knowl edge management t hat occur in an organizat ion are dist ribut ing inf ormat ion; cl assif y inf ormat ion and wrong percept ions of knowl edge management .

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invest ment and t he sit uat ion wil l not even worsen. However, t he manager of t he Cat erpil l ar decided t he st rat egy t o impl ement t he inf ormat ion t echnol ogy as t he enabl er of t he inf ormat ion management t o sol ve t hose probl ems. They al so agree t hat CAT is impossibl e t o compet e wit h gl obal compet it or wit hout using t he inf ormat ion t echnol ogy. The IT woul d be a great t ool t o gat her t he inf ormat ion t hat necessary t o improve t heir product s, services, enabl e knowl edge sharing and a t ool f or making connect ions wit h it s suppl iers and cust omers and t hey can al so gain t he inf ormat ion about t heir compet it or as wel l . So, t hey set up t he inf ormat ion t echnol ogy proj ect wit h eight years period and it cost about $2 bil l ion dol l ars.

16. 3.The Solution

Cat erpil l ar impl ement ed t he comput er-int egrat ed manuf act uring (CIM) t hat is t he concept of impl ement at ion of various int egrat ed comput er syst em in f act ory aut omat ion and it consist s of t hree basic goal s t hat are simpl if icat ion, aut omat ion and, int egrat ion and coordinat ion (Turban & Mcl ean & Wet herbe, 2001 pp. 346-347). They al so impl ement t he robot ics, and many kind of comput er based appl icat ions. The resul t of t his impl ement at ion has shown in decrease about 60 percent of t he in-process invent ory and it hel p cat erpil l ar save several mil l ions of dol l ar. The number of worker t hat not necessary was el iminat ed t o reduce t he expendit ure as same as t hat t he cost l y pl ant s and warehouses were cl osed. The product ion processes were simpl if ied so t hat t he t ime in buil d up a product was decrease f rom about one and a hal f mont h f rom t he previous t o nearl y j ust one week and in t his way, it hel ps cat erpil l ar del iver it s product t o t he cust omer more rapidl y. The on-t ime del iveries t o cust omers improved about 70 percent . The Cat erpil l ar al so used new management t echniques such as a Comput erized Mat erial s Requirement Pl anning II and comput erized purchasing and l ogist ics syst ems were put int o operat ion. Cat erpil l ar al so set up t he syst em t o manage t he repairs and provide t he spare part f or repl acement t o it s deal ers and cust omers. This syst em hel p support t he deal er in providing part s t o t heir cust omers more rapidl y and al so sust ains l ow invent ories.

Cat erpil l ar al so gain t he benef it of t he Int ernet by connect ed al l of t heir branches t oget her as a gl obal net work. They connect ed t housands of t erminal s and al l of t heir empl oyees and more t han hundreds of t heir deal ers f rom t housands of l ocat ions t oget her. This net work is used f or an EDI (el ect ronic dat a int erchange), f or t he Int ernet , f or ot her t el ecommunicat ions appl icat ions and int ranet act ivit ies. This is a great t ool t o enabl e knowl edge sharing by connect one of f ice t o anot her in dif f erent pl aces around t he worl d t o share t he inf ormat ion t oget her and t he empl oyees can al so share t he usef ul inf ormat ion and t he experience t o ot her col l eagues. The manager f rom dif f erent part of t he worl d can provide t he usef ul inf ormat ion of t he sit uat ion and t he market change

t o Gain Compet it ive Advant age (Saron K. Yef t a, Indra Gamayant o) environment t o t he head quart er t o decide and adapt t heir st rat egy more rapidl y and al so more ef f ect ivel y t o mat ch wit h t he sit uat ion and respond t o t he new environment quickl y. In t his way, CAT wil l be more f l exibl e t o adapt it sel ves t o t he ext ernal environment .

Cat erpil l ar al so used t he execut ive inf ormat ion syst em t hat hel ps t he manager t o anal yze t he inf ormat ion and al so eval uat e t he deal er’ s perf ormance. The execut ive inf ormat ion syst em hel ps t he manager t o make more ef f ect ive decision. It has great l y increased t he avail abil it y and appl icabil it y of inf ormat ion and ought t o provide a maj or cont ribut ion t o t he sense of great er conf idence, cert aint y, and reduce risk in making t he decision (Rit chie & Brindl ey, 2001). The execut ive inf ormat ion syst em can hel p manager of CAT anal yze t he inf ormat ion and f ind t he rel evant sol ut ion f or t he probl em.

The Cat erpil l ar is now using t he EDI syst em wit h it s suppl iers and deal ers. There are several of benef it s t hat CAT can gain f rom t his syst em. The EDI enabl e t hem t o send and receive l arge amount s of rout ine t ransact ion inf ormat ion rapidl y around t he worl d (Ward & Peppard, 2002 p. 270). In t his way, t he EDI syst ems hel p CAT t o t rade wit h ot hers deal er and cust omers around t he worl d wit hout boundaries, it is not t ime consuming and it is very f ew errors in t he t ransf ormed dat a as a resul t of comput er t o comput er dat a t ransf er. EDI can al so hel ps CAT t o access t he deal ers and cust omers dat abase t o see t he needs of product and spare part s if t here are l ow st ock so t hat t he Cat erpil l ar can provide t he product on t ime f or t he cust omers and deal ers. In t he same way, it can hel p creat e t he sense of part nership rel at ionship since it invol ves a commit ment t o a l ong-t erm invest ment and t he ref inement of t he syst em over t ime. As a resul t , it wil l hel p make t he barrier t o ot her compet it or t o gain access t o t he dist ribut ion channel and prevent t hem f rom ent ering t he market (Thompson 1998, p. 78).

So, it can be seen t hat in t his inf ormat ion age, t he gl obal izat ion makes change of l ocal l y t radit ional l y business t o become t he e-business worl dwide. An int ernat ional f irm can do t he business across t he boundaries. The Int ernet hel ps t he f irm t o gain t he inf ormat ion about t he market of t he ot her part of t he worl d t o invest . Komat su of Japan sees t his opport unit y t o l aunch t heir product s in US market and t hey have t he advant age of t he cheaper product because of cheaper mat erial s and l ower l abor cost t han Cat erpil l ar. The Cat erpil l ar Inc. real izes t he probl em and t hey had impl ement ed t he inf ormat ion t echnol ogy (IT) as an inf rast ruct ure t o support t he dat a gat hering and al so manage t heir inf ormat ion. Many inf rast ruct ures had been set up t o make t he benef it t o t he f irm and t o gain compet it ive advant age over it s compet it or. To acquire t he t echnol ogy, CAT are f aced wit h t he chal l enge t hat is t o purchase t he IT inf rast ruct ure, it is very cost l y especial l y when t he f irm are in suf f ering sit uat ion and t hey

invest ment . However, CAT manager underst and t he need f or inf rast ruct ure t hat wil l enabl e t he knowl edge management t hat is very vit al l y t o compet e wit h gl obal compet it or.

Cat erpil l ar had impl ement ed t he inf rast r uct ure such as CIM syst em and so f ort h. A gl obal net work has been creat ed t o t ransf er t he import ant inf ormat ion bet ween t he company, deal ers and cust omers al l around t he worl d. In t his way, t he net work generat ed t he share of import ant inf ormat ion such as t he quant it y of product in st ock t o hel p CAT del iver t he product on t ime. Cat erpil l ar can al so know t he need of spare part s and t he l ead t ime t o produce t he goods wil l be reduced. The net work can be use as a t ool t o share t he knowl edge bet ween col l eague eit her in t he same of f ice or t he ot her count ries. It is al l ow t he co-worker t o communicat e wit h each ot her f or sharing t he inf ormat ion t o sol ve t he probl em, share experience, ask f or an advice, share t he inf ormat ion about t he market environment so t hat t he company can handl e t he change rapidl y and so f ort h. Cat erpil l ar can benef it f rom t his knowl edge sharing and it wil l provide t he compet it ive advant age t o t he organizat ion. Cat erpil l ar al so used t he execut ive inf ormat ion syst em t o anal yze t he inf ormat ion t hat has been col l ect ed t o make t he f urt her decision t o expand t heir operat ion or t o sol ve t he specif ic probl em and al so predict t he f ut ure environment . This syst em can reduce t he risk and reduce t he uncert aint y of t he sit uat ion and it can al so hel p CAT t o gain t he compet it ive advant age as wel l .

Anot her import ant syst em is EDI syst ems. Cat erpil l ar can gain l ot s of benef it s of manage t heir inf ormat ion by using t his syst ems. They can send and received a huge amount of rout ine dat a especial l y t he t ransact ion t o al l over t he worl d and it is very f ast , l ess error and it can al so hel p t he company t o access t he dat abase of it s business part ners t o make an appropriat e support t o t hem. In t his way, it can hel p creat e t he commit ment and t he part nership t o t he cat erpil l ar and prevent ot her compet it or t o gain access t o t he dist ribut ion channel . Thus, al l of t he benef it above can prove t hat t he Cat erpil l ar gain t he compet it ive advant age over it s compet it or by using t he inf ormat ion t echnol ogy t o enabl e t he knowl edge management t o t he f irm and t o be abl e t o compet e wit h t he dynamic change of business environment in t he new int ernet base economy of t he worl d t oday.

t o Gain Compet it ive Advant age (Saron K. Yef t a, Indra Gamayant o)

Conclusion

E-business is an int erest ing way f or business t o earn more prof it and ef f iciency. Though t here are a l ot of benef it t hat can be gained f rom e-business, it ’ s a wise decision t o l ook at t he negat ive sides such as t hreat s, obst acl es et c. In order t o gain t he benef it s, companies or organizat ions t hat wish t o impl ement Int ernet as part of t heir businesses act ivit ies have t o l ook bot h t he advant ages and t hreat s or obst acl es t hat have t o be f aced.

Knowl edge management is a met hod of t he creat ion, capt ure, organizat ion, access and use of organizat ions int el l ect ual capit al on consumers, market s, goods (product & services), and int ernal processes (Abel l and Oxbrow, 2001, p. 33). It is a powerf ul way t o hel p an organizat ion or company t o at t ain compet it ive advant ages in compet ing wit h ot her companies. The impl ement at ion of knowl edge management has successf ul l y encouraged t he cont inuance of many organizat ions t o achieve goal s. The charact erist ics of successf ul organizat ions t hat impl ement knowl edge management are conservat ism in f inancing, sensit ivit y t o t he environment , sense of cohesion and company ident it y among st af f s and, t ol erance of new ideas, circumst ances, and changes.

Though knowl edge management can bring a l ot of benef it , at t he same t ime, it al so brings probl ems. The probl ems depend on t he organizat ions t hemsel ves, what is t he core business and how t he organizat ion runs t he act ivit ies. Basical l y, t he probl ems of using knowl edge management t hat occur in an organizat ion are dist ribut ing inf ormat ion; cl assif y inf ormat ion and wrong percept ions of knowl edge management .

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