March 31, 2011

To manage assets, you must manage knowledge.

I stumbled across one of the major links between knowledge and asset management today. It might sound really obvious, but assets generate information! To effectively manage assets, be they property, machines, people, etc, you need to have a way of dealing with the flows of important information surrounding them, and of converting that into knowledge that is useful, and an aid to your decision-making processes. This is where the Knowledge Management comes in.

It's not just that you're managing assets based on knowledge and theory (which you should be anyway of course - theory is the basis for action), it's that the assets themselves need continuous monitoring/maintenance/support and all of this generates information that must be handled appropriately for effective use later. For example, for a single component of a machine you own, you must: record the decision-making process that led to purchase, the cost, market and book value, likely depreciation values, how often it needs maintaining, what kind of maintenance is required, its productivity, etc. Now, if you scale that up, that needs to be repeated for every machine you have. In every factory you own... that's a LOT of information, and this is just one small area of asset management!

Even then, as we have previously discussed, that's a small part of the battle. It's fair to assume that you require more than just one person's input in your asset management. If you had a small operation and you didn't, life might be a little easier. But, assuming you do, because the operation is big and there is too much for one person to consider, then you have fresh problems, because it is no longer just about making sure the information is collected and occasionally used; no, you have to get past communication barriers. And we know that while this isn't too tough with explicit information, it's much tougher with tacit information. Even with just two people managing all assets, an incredibly high level of communication would be required for effectiveness, and with every extra person involved in the process, it becomes even harder to sustain!

And yet it is vital that you do have a lot of people involved, or else, you completely lose access to the huge volumes of tacit information within them, as well as their buy-in and consequent compliance or interest in 'your' (not 'their'/'the company's') asset management policies.

So it appears this is the challenge: Knowledge and Assets are inextricably linked in this way, and you need to manage both effectively to succeed. Wow... good luck to us all... no wonder KBAM seems so big!


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  1. I see your point Yanik and i am totally agree with you…......... We as a team didn’t alocate the knowledge management to any member…....... Everyone will link his/her part with it….... So at the end we will have an complete view…....... Knowledge is everywhere and KBAM is the everywhere…............ Seee you at Paul’s excellent Seven tom….......

    31 Mar 2011, 20:41

  2. i agree with your view yanik about how complex knowledge and its difficulties to capture it. however, in my humble opinion it’s not a matter how big or small operation within the business process but the culture of organization will determine how easy or not to manage their knowledge. perhaps, when organization decide to use comprehensive IT system, let say SAP, it will help capture every single thing that you concern above. yet, the high capital investment to set up this system might become boundary to use this system, especially for SME.

    31 Mar 2011, 21:04

  3. From personal experience it is too expensive for an SME…..........

    31 Mar 2011, 21:05

  4. From my point of view, the first step is the people in the organisation to realise that they need to manage their tacit knowledge because if they do not share the same values how can they even think of investing in a new software? I believe that it has to do with decision making first and then managing the knowledge…

    01 Apr 2011, 11:03

  5. Fani i cannot see how you can decide from something without managing knowledge which is mainly based on info. . . . I strongly believe that knowledge is the fundamental aspect of everything in that world. . .. .

    If you decide without knowledge is like astrology. . . ... . If you think without knowledge is like being guided by your experiences without thinking of the theory. . . . . I see a lot of bias in that two aspects…...

    01 Apr 2011, 14:32

  6. Ponthy, I agree that culture is very important, and that you need the right one – i.e. an organisational learning environment – in order to manage knowledge effectively. But I think size also impacts, and the bigger your organisation is, the harder this process can become.

    Vagelis, we actually did decide to allocate the KM work to one of our team, as she has a background in information study, but of course it will be necessary for all of us to consider how the things we are working one will fit into the KM systems that she thinks we should implement.

    Fani, I agree that is the first step. But hopefully we are now at the point in this course where we make that assumption that we are always working on the basis of knowledge. I think Vagelis was speaking about this too. As I said before, CBE instilled this idea in us, and you can see it in every module since. Think of them as knowledge-based leadership, or knowledge-based decision making if it helps. I think the only difference here, is that this time it is explicit that knowledge is the basis, because there is so bloody much to consider when it comes to managing assets!

    01 Apr 2011, 15:13

  7. Yanik as the “Father” with his special voice:

    There is no substitute for knowledge”

    01 Apr 2011, 15:16

  8. Hi Yanik,

    Beautifully put! Great post! If I remember correctly I think it was someone from group A who had blogged about …. why the module is “knowledge BASED asset management” and NOT “knowledge AND Asset Management”? You just answered it! I think your blog is a good read for everyone on MBE….. I would have to agree with you AGAIN! :)

    01 Apr 2011, 21:22

  9. Yanik, thanks for sharing this view. I’d actually until now been thinking that an obvious link does occur but ‘so what!?’
    So, ya it does make sense now in a way as I tried to apply it, ‘it is about how to manage knowledge so as to achieve excellence in asset management’
    And thinking in this way, some good ideas for application do come up, which we’ll discuss in our presentations!

    03 Apr 2011, 14:10

  10. Hi Yanik and everyone!
    I like Yanik’s opinion that we need knowledge to manage assets. I want to add a bit more that, as assets generate information and by being processed, is it information that makes knowledge? Knowledge might become obsolete or out of date (that’s why we need continuous learning) so is it the information from assets that helps to maintain our knowledge, developing and keeping it updating with changes from other factors? I think there is an interactive connection between knowledge and assets.

    The thing I like the most in this blog is that you pointed out the communication barriers. I think it is the hot point for knowledge management when communication is beyond words and it requires relevant experience to understand!
    Thanks for sharing! :)

    05 Apr 2011, 22:14

  11. Thank you all for your great replies and comments!

    Anh, I think you’re right, knowledge can become obsolete and out of date. This makes knowledge management an even harder task, as knowledge is a living thing, and is always being added to and adapted for the latest situation. This is one reason I love Wikipedia – it may not be an academic source, and it can’t always be trusted, but it is an incredible store of information that is continuously updated.

    Also for me, the difference between knowledge and information is that knowledge has been processed and analysed to the point that it can be applied. Information is only descriptive and useless if nothing more is done with it, but it can be used to add to our knowledge store. As you say, the connection is interactive!

    05 Apr 2011, 22:40

  12. Yanik regarding information and Knowledge rfer to The new economics page 106

    05 Apr 2011, 23:02

  13. I don’t have my own copy. What does he say?

    05 Apr 2011, 23:08

  14. And the God says: (ahahahaha)

    Knowledge has temporal spread. Knowledge comes from theory. Without theory there is no way to use the information that comes to us on the instant.

    A dictionary contains information, but not knowledge. A dictionary is useful. I use a dictionary frequently when at my desk, but the dictionary will not prepare a paragraph nor criticize it.

    Yanik how can you live without having the Bible….............

    I see everything in that world thorugh that book (Out of crisis as well).........

    05 Apr 2011, 23:15

  15. Haha! I’ve read both, but I’m just a poor student – I can’t buy all the books. They’re on my list though, I promise! It pretty much says what I also did, but with better phrasing.

    05 Apr 2011, 23:54

  16. It’s on-line as well, the whole chapter at least, if you want to retrieve! :P (search ‘System of Profound Knowledge’)

    06 Apr 2011, 00:12


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