July 9, 2008

KM Approaching Zero Cost

The field of knowledge management seems to have been around for a very long time. Most of the experts in the field break down the components of knowledge management to the following.

1. Acquiring Information
2. Organizing Information
3. Storing Information
4. Distributing Information

Something magical happens between storing and distribution that actually creates the contextual understanding of the information (i.e. knowledge) but for now, we can leave that alone. This breakdown seems simple enough, but what happens when we pull back the curtain and examine each one in our new 2.0 world. I was recently reading a rather dated book on investing. The advice was to go down to the local library and review several periodicals like Moody's and Value-Line. Then, contact the company directly so see if they would mail you an annual report. Wow, talk about how times have changed. Most, if not all, of that information can easily be retrieved over the web. You can screen thousands of stocks at the push of a button on sites like Etrade. Today we have Google, Wikipedia, and a zillion other sources to provide us the information we need. It wasn’t too long ago where businesses brought in high paid consultants or research firms to present the latest trend such as Six Sigma or Re-Engineering. Today, 90% of information needed to implement can be garnered from the web. Perhaps, it's that final 10% that's worth paying for. The time, resources, and cost of acquiring information is fast approaching zero due to the technology advancements of our time.

Organizing is the process by which you catalog information just as we did in the old days with card catalogs at the local library. We take information in its raw form and try to find ways to organize it so that we can retrieve it at a later date. Of course building a library and creating an inventory of physical objects is not only expensive, it is very time consuming. Imagine going into your local grocery store and trying to locate the cereal isle. You go up and down, squinting at signs, and testing your long range vision trying to spot the Lucky Charms from the end isle display. In the digital world, you simply perform a search, update your favorite list or utilize one of the many book marking sites. You can use RSS to organize your daily feed of news or get the latest blog post by Tom Peters. While the amount of information is growing, our ability to organize vast quantities has also greatly improved.

Storage may be the most obvious gravitational pull to zero we have. Last week, my wife got a 2gb USB storage device in the mail simply for renewing her subscription to Pharmacy Times. No, it wasn't "Geeks Are Us Monthly", it was a pharmacy journal. It was just a decade ago when that kind of storage would have cost you $10,000. It is not just the physical storage but companies are willing to allow you to store your data on their hardware in the hope of selling you more value-add services.

How much does it cost to send a package today? I sent a letter to Stockholm a few weeks ago and it cost about $0.95. How much would that have been in 1950? I could have emailed the letter for two cents if a physical copy wasn't required. Think about a phone call from New York to London which would have been $200.00 in 1940. In 1970, you paid $2.50 per minute and today you can have unlimited calling for around $10.00 per month. Distributing information over the web allows you to communicate to millions of people without having to buy a Super Bowl ad. Hence, the communication or distribution costs of information are approaching zero.

Just about every aspect of knowledge management is approaching zero so what does that mean in the generation of value? What is going to happen now that information, which was more valuable than gold, is now free? Like any business built a top a commodity, you must find innovative ways in which to deliver or enrich the information. Organizations must realize what is happening in the outside world is also happening inside the enterprise; that is, all information is approaching zero cost. They must turn their attention, not on the idea of cutting costs such as reduced storage, lower service level agreements, or lower functionality. Instead, they need to learn to leverage the information managed by our collaborative systems.

Posted by Todd at July 9, 2008 2:33 PM

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Posted by: TJGodel at July 21, 2008 11:49 AM

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