The Business Culture Issue
Business processes and business process re-engineering gained much prominence and some notoriety in the early 1990s as companies were challenged to break out of their traditional indoctrinated ways of doing business. A typical re-engineering process would start with a 'mapping' of current business processes and then an intense assessment of which non-value adding processes could be 'obliterated'. With the increased challenges of globalization, and commoditization, it has now become necessary to incorporate both codified and uncodified business cultural practices into any successfull knowledge management system.
Generally, basic business practices are a combination of commercial codes and a variety of cultural factors, such as regulations and region-specific habits. Inappropriate business practices are potentially risk-positive for business operations. When problems related to business culture appear, companies usually rely on their legal representatives to use their legal knowledge to resolve them.
While laws and regulations usually present as codified, written text, region specific practices related to commerce are generally complex and have a significantly less structured form, which makes them difficult to employ in a manner that reflects good business practice. Transactions with foreign countries require complex risk assessment models that are able to combine these two different business practices into usable and reliable business enhancing units that foster innovation and market advantage.
Compared to traditional theories of innovation, recent theories lay much emphasis on the strategic importance of relational tools rather than only on technical tools, and on knowledge networks rather than only on technological networks. The development of knowledge-based innovation requires the capacity to implement technical and relational tools: technical tools refer to the acquisition and utilization of new information and communication technologies. These technical tools do not create competitive advantages because they are readily available to others. The creation of competitive advantage rests on relational tools: that is the way of doing business, both in the internal and external environments of firms. As regards networks of cooperation, knowledge networks appear as a new form of cooperation networks, taking multiple forms that are added over and above the technological networks that comprise the first generation of cooperation networks.
The evolution from a technological network perspective of innovation to a social network perspective of innovation has been led by the more and more pressing challenge to transform information into knowledge, i.e., information contextually connected to the development or improvement of business processes. Knowledge-based innovation requires not one but many kinds of knowledge.
Approaches To Be Considered
The KM discipline has provided a multitude of techniques for '‘managing'’ large knowledge based, business practices. The challengenow is to determine how the delicate balance between business process and business practice can be implemented in such a was as to ensure that they are appropriately balanced for optimal performance. For business processes to be effectively deployed, they must be surrounded by a healthy dose of business practice.
The concepts of codification, explicit knowledge, tacit knowledge, routine work, processes, and practices are not new, but still engender a degree of confusion through their different interpretations. It is crucial to distinguish ''process' from 'practice' if one is to attempt to operationalize these concepts, which leads us to suggest that the following approaches be considered when applying knowledge management to business practices:
- Extraction, transformation, and loading of transaction data onto a data warehouse system.
- Storage and management of the data in a multidimensional database system.
- The provision of data access to business analysts and data science professionals.
- Analysis of the data by the appropriate application software.
- Presentation of the data in useful formats, such as graphs, tables, or text.