Knowledge Management at Sigma Bank

MITS5505

Knowledge Management

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Introduction

Knowledge Management (KM) has emerged as a must-have for many organizations operating in today’s fast-paced and ever-evolving markets where such knowledge and expertise form the key value proposition. Such issues are well understood notably by the Sigma Bank, an organization that seeks to address challenges resulting from staff turnover and timely loss of key knowledge within the context of the organization. The initiation of KM Solutions was occasioned by the realization that the Bank might lose knowledge acquired out of the many years of service by some of its critical employees. This report examines the implementation of KM at Sigma Bank through the lens of the five distinct stages of knowledge management: Far from its strategic initiative focus: identify, justify, create, deploy, grow, and sustain, knowledge management should address the components to advocate and learn, develop strategy, design and launch initiatives, expand and support initiatives, and institutionalize knowledge management. As the process of managing knowledge moves from structured to unstructured, there are different issues arising at each of the stages and the role and activities of the Bank at every stage are described.

Stage 1: Advocate and Learn

The second process of KM is a process of creation, where people at the organization are informed of the need to engage in KM and the outcome of this process. In Sigma Bank, this stage was characterized by the identification of the failure to manage Knowledge Management as a major risk that arises due to staff turnover. Employees in the Bank had long average length of service and this resulted in them being knowledgeable not only about their workstations but also about the whole organizational structure.

Sigma Bank also endeavored to ensure that it moves from a knowledge acquisition mode to establishing continual improvement concerning KM as an organizational culture. This involved seeking to champion KM at organizational top management levels and disseminating the value proposition of KM amongst the workforce. However, one of the major issues that most organizations experience at this stage is the issue of employee resistance to change. It was not common for the employees to share their knowledge with other employees since the company was operating in a very fragmented style. Relatively, addressing this issue has been a significant challenge in terms of advocacy as well as raising awareness.

The Bank also engaged in learning from others including benchmarking with other organizations and consulting firms. This helped establish Sigma Bank’s strong principle to support its KM undertakings. But the issue here was how to implement these best practices within the context of the environment in which the Bank worked, where it was operating in a very competitive environment and much attention was placed on knowledge management [1].

Stage 2: Develop Strategy

The second step is the creation of a KM strategy, whereby organizations state their course of action about managing knowledge. Based on the corporate vision and further analysis of the areas in need of enhancement, the KM strategy of Sigma Bank was developed. This was among the top objectives of the strategy; promote a shift of the organizational culture to one that supports knowledge sharing as well as cooperation. This was quite a departure from the classical perspective of knowledge as a mechanism of power and control.

Further to the strategy of the Bank was coming up with a plan for the consolidation of the contact management system, scrutinizing the best document management practices, and putting into practice techniques of information mapping. These initiatives were aimed at providing the framework for the systematic treatment of KM and at making sure that strategic information is indeed flowing [2].

However, the development approach of the strategy was faced with the following challenges. There were several challenges encountered throughout the implementation process and one of them was related to a misfit between KM strategy and the strategic business plans of the Bank. Though the KM strategy aimed at enhancing the identification, creation, acquisition, organization, transfer, and utilization of knowledge for the improvement of the Bank’s operations, not all the activities undertaken as part of KM were easily linked to the achievement of the end goal. Also, the strategy formulation was carried out at the strategic management level without much participation from the workforce, and thus, the reverse was received back with some level of rebellion.

The last problem with the strategy was its size. The Bank was struggling with managing both the hierarchical type of knowledge and the content of its employees’ prefrontal cortex in an efficient way. The strategy also had to consider that different parts of the organization still used the old-style systems that were in place, for instance, human resources. These systems were not in close harmony with the new KM initiatives and this caused problems in the implementation of the systems to arise [3].

Stage 3: Design and Launch KM Initiatives

The final stage, which is planning and implementing KM activities, is the actualization of the strategy. For Sigma Bank, this stage entailed the following interventions; Integration of the contact database, and the evaluation of the system used for managing documents. The Bank also started new methods of knowledge management that include the creation of an information map and having a kind of ‘yellow pages’ wherein the experts of the bank can be found.

As a major achievement of this stage, there was the creation of one of the most important tools – an email-based system that tracks discussions and decisions. The Bank ensured the employees continued to write emails on threads to develop a knowledge base that everyone could easily reference. Unfortunately, with the constant decrease in the frequency of emails, the Bank is experiencing the problem of finding a new method to legalize these activities.

Though the start had been marked by the commencement of KM initiatives was not without difficulties. Among them, there was a problem with employees being reluctant to accept change to new systems and implementing new processes. The review of the document management system was discussed controversially, as many employees with the old procedures were used to working with the existing tools. Also, some participants expressed the opinion that the new initiatives would bring extra pressure on the employees because more time would have to be dedicated to documentation of the acquired knowledge.

Another issue was the quarter-day did not provide enough resources to support the KM initiatives. Despite the enthusiasm and massive investment of the initial timespan of the KM program within the Bank, some managerial limitations remained, mainly regarding the amount of budget and human capital that was available to maintain the further growth of the KM initiatives. This led to a scenario in which some initiatives were started, but not adequately backed so that the support they received yielded only partial success and short-term returns [4].

Stage 4: Expand and Support Initiatives

The advancement plan of KM initiatives depends on the support and integration process that follows after the launch of the initiatives. In the case of Sigma Bank, this step meant taking the KM initiatives beyond the initial implementing units and also continuing to support KM initiatives in other parts of the organization. The senior management of the Bank firmly understood that if KM were to be properly effective, it had to become an organic part of the company’s human capital.

To this end, the Bank emphasized owning and sharing knowledge and working together across management levels. It comprised the education of the employees on the ways, skills, and means of appropriate utilization of the KM instruments and activities. The Bank also introduced an integrated access portal for knowledge management solutions that would facilitate the use of information by employees [5].

Nevertheless, new KM initiatives exacerbated several difficulties that the organization experienced in the past. An important evolution was that a major concern identified was the inability to sustain awareness and engagement with KM and to keep it on the radar or as a priority among organizational pursuits. As the Bank was expanding and diversifying, KM could be largely relegated to the background in favor of numerous other projects. Further, expertise was needed to foster constant interaction and persistence to keep the employees motivated toward the program.

A final issue was the interfacing of KM with the established traditional systems of the Bank. Although some improvement had been achieved, for instance in the contact management system where it had been centralized, there were still many implemented systems that have not been fully incorporated into the new knowledge management programs. This led to the situation where half of the organization was 100% on the program, while the other half was still operating with the pre-KM tools [6].

Stage 5: Institutionalize Knowledge Management

The last step in KM is the integration of KM into the organization, where the company makes it part of its culture and its ongoing business process. Here at Sigma Bank, it meant a gradual integration of KM practices into the structures, frameworks, and working of the Bank so that knowledge management became part and parcel of the Bank’s functioning.

The first of these, which was recognized to be problematic at this stage, was the increasing opposition of the Bank to the very term ‘knowledge management’. Even when the label started to take root and the organization became familiar with the concepts of KM, people stopped using it as the preferred tag and there was a need to brand KM activities differently so that they were not associated with consultant or external influences. The challenge was to make the Bank bring KM into its organizational mainstream in a more natural way so that the effort of making it mainstream. Ravel; So The Bank had to come to practice the change of behavioral style in conveying KM and KM activities [7].

The other issue was the transition from the well-defined processes of managing knowledge to free-form business processes. The Bank had grown from the initial stage with a clear K Mitt plan outlined by the middle of the year and had effectively implemented a systems-based approach to knowledge management but there was a realization that owing to the complex and dynamic nature of knowledge a far less structured approach was required. This involved adopting different theories like complex adaptive systems to develop a more natural approach to generation, disruption, and use of knowledge.

For KM to be mainstreamed at the Bank the two major challenges had to do with resource constraints. This is because early on in a program of this nature, KM had been considered a priority but as the Bank is expected to be inundated with demand for its resources soon, then KM may well lose priority. To make KM remain relevant, the leadership was required to constantly support the cause, and at the same time take practical steps to show that the effort was worthwhile for the organization [8].

Conclusion

Sigma Bank’s journey through the five stages of knowledge management provides valuable insights into the challenges and opportunities of implementing a KM strategy in a large, complex organization. From advocating and learning about the importance of KM to institutionalizing it as a core component of the Bank’s operations, each stage presents unique challenges that require careful planning, communication, and resource allocation.

While Sigma Bank has made significant progress in developing and implementing its KM strategy, there are still several challenges to overcome, including resistance to change, resource constraints, and the need to integrate KM with legacy systems. As the Bank moves forward, it will need to continue evolving its KM strategy to address these challenges and ensure that knowledge management remains a priority within the organization.

In conclusion, the implementation of knowledge management at Sigma Bank highlights the importance of a structured, adaptive approach to managing knowledge. By following the five stages of KM and addressing the challenges at each stage, organizations can create a knowledge-rich environment that supports innovation, collaboration, and long-term success.

References

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[4] E. Altulaihan, A. Alismail, M. M. Hafizur Rahman, & A. A. Ibrahim, ‘Email security issues, tools, and techniques used in investigation. Sustainability, 15(13), 10612. 2023 https://doi.org/10.3390/su151310612

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[6] L. Lam, P. Nguyen, N. Le, & K. Tran, ‘The relation among organizational culture, knowledge management, and innovation capability: Its implication for open innovation’, Journal of Open Innovation: Technology, Market, and Complexity, 7(1), 66, 2021  https://doi.org/10.3390/joitmc7010066

[7] H. Laihonen, & P. Kokko, ‘Knowledge management and hybridity of institutional logics in public sector’, Knowledge Management Research & Practice, 21(1), 14-28, 2020.  https://doi.org/10.1080/14778238.2020.1788429

[8] M. Kordab, J. Raudeli?nien?,  & I. Meidut?-Kavaliauskien?,  ‘Mediating role of knowledge management in the relationship between organizational learning and sustainable organizational performance’, Sustainability, 12(23), 10061, 2020. https://doi.org/10.3390/su122310061