Business IT Guide: Building a knowledge base

This Business IT Guide is designed to assist you in building a knowledge base to store important business specific knowledge in a systematic way.

As more and more businesses are built around the expertise of employees it is important that you capture this information, as it can build value in your business and will help you if people leave your organisation.

Introduction to knowledge management

Knowledge management is the process of documenting and making available business related knowledge. This knowledge may be about processes, market data, product development or other information such as customer details that is crucial for your business. Academics and economists will often talk about "intellectual capital", but this is really another way to describe knowledge in a business and giving it some form of value. The small business owner will be more concerned about the practicalities of storing the knowledge in people's heads and making it available to other members of staff.

While it may be relatively easy to put a price on a piece of machinery, measuring the worth of knowledge is a lot more difficult, because it is harder to replace. Many small businesses attract a higher valuation in a business sale due to their intellectual capital.

Could knowledge management benefit your business?

Many small businesses work in very focused areas often using some specific skills not generally available off the street. For these companies, the cost of replacing the knowledge that an employee has developed over the years can be big, more so in a small business with few members of staff each of which has a unique skill set and personal knowledgebase.

Imagine if you are developing a new product for your market place - how do you ensure that all of the ideas, techniques, tips and processes are written down and made available to all members of a team rather than sitting in one person’s head?

If a key member of your team was off long term sick or left the business and took that knowledge with them it could set your business back weeks, months or even years.

If you decide to sell you business the chances are that a purchaser would want to take across key employees that understand business processes or technologies specific to your company. Many deals have been lost as key employees have refused to move on to the new business. By having as much of their knowledge documented in a system you can reduce the risk of this happening to your company.

Not every business will need to go to the expense of building a fully fledged knowledge management solution. To see if you need to take a look around your work place and imagine if one, two, three or more members of staff were to leave tomorrow and ask yourself how would you replace their skills and knowledge?

Some small businesses will manage this by having other people sufficiently trained to cover for the absent employee. Although their skills may not be at the same level initially, they are probably going to learn the additional tasks and become proficient quite quickly.

You also need to consider the nature of your business. If you are a technology start-up the chances are that you have some very specific skills that would be very difficult to replace. If on the other hand you are running a small courier business you will probably find replacement staff quite easily.

What is the right knowledge management solution for you?

If you have internal technical skills and the time available it may be an idea to build your own solution. The benefit of this is that you can tailor the solution to your own business and your important procedures.

If on the other hand you have more complex requirements with little internal knowledge management skills you may be better buying a solution that helps you get up and running

Building a simple knowledge management solution

The type of knowledge management solution you should build will depend on a number of factors:

• If you are a small business with between 1 and 5 employees and little in the way of exclusive processes, products or procedures then you could simply build a small company handbook that contains some notes about your key procedures.




• If your business is more complex and you have between 5 and 15 employees then write down your knowledge in a structured document held on a PC in the office.




• If the business has more than 15 employees then you should consider the use of a small database application designed to store relevant people’s knowledge.

Once you have decided that it is important to have a knowledge management system you need to get started as soon as possible. The quicker you start the quicker the system is available.

It may be an idea to off load some of the data collection tasks onto a trusted office manager or administrator. They could be given the job of collecting as much of the data as possible and putting it into whatever format you think appropriate for your knowledge base.

If you have members of the team with critical knowledge in their heads then you must allow them time to update the knowledge base or they will forget to do it or put it very low down on their list of priorities. Help the team understand the importance of what you are trying to do.

The simplest knowledge management system could be a folder containing hard copy documents that list processes, techniques, ideas and developments sitting on a shelf. Many companies refer to this type of folder as their “bible” as it is seen to contain everything they need to run their operation. A simple test to evaluate this folder would be to give it to someone unfamiliar with your business and ask them to describe one or more of your regular tasks. If they cannot do it then maybe your folder needs some updating!

The problem with this approach is that the folder could get lost or damaged, or could get out of date very quickly.

Another solution would be to use a simple word processor document that sits on a PC in the office that is updated by staff when new processes and ideas are created. The biggest problem here is ensuring that the data is up to date and accurate. By producing a simple format or template in the document updating could be made straightforward.

The next stage may be the creation of an intranet to share documents and knowledge. An intranet is an internal web page that is only accessible by staff working for a business as it contains private company data. The benefit of this approach is that an intranet can be indexed and searched just like the worldwide web. This makes looking for a process such as “Paint application rules for Jenson Products” as easy as typing it into a search box.

A database can be used to build a knowledgebase. One of the popular products such as Microsoft Access is designed to help you quickly setup small databases. It is important to keep your requirements as simple as possible so that you are not over complicating the solution. If this work is outside of your organisation’s skill set you may consider working with a third party to implement the system for you, but this may prove to be relatively expensive.

To quickly calculate the cost benefit of the knowledgebase think how much it would cost to replace the lost person’s knowledge or experience and use that as part of your business return on investment. For many a knowledgebase is an insurance policy, for others it is a vital part of their company’s value and contributes significantly to any subsequent company valuation.

Whatever approach you take, it is critical that the data in the knowledgebase is up to date an accurate. Misleading information is worse than no information.

Further reading
For more information and advice about knowledge management, visit AccountingWEB.co.uk's sister site, KnowledgeBoard.com

Source: Building a knowledgebase
The Business IT Guide enables businesses to make the right IT decisions.