Siemens AG, a multibillion-dollar conglomerate may best
be known for its high-speed trains, but also produces
everything from x-ray machines to light bulbs to power
generation equipment. Siemens is one of the world’s largest and most successful companies. Siemens needed to share knowledge more effectively among its nearly half million employees around the globe. In 1996, a group interested in knowledge management organized into a community of interest. They examined how KM, in its infancy, could be exploited at Siemens. These mid-level managers began to develop communities of practice (a CoP is a group of individuals responsible for creating, refining and maintaining knowledge in its area of expertise, knowledge repositories, and methods to share knowledge. In 1999, upper management recognized the importance of these efforts. Its central board created a distinct organizational KM unit.

There were developmental problems, both cultural and technological, which is not unusual when a large-scale IS is proposed. ShareNet provides a database repository, search engine and chat room. There are online entry forms so that employees may enter knowledge into the repository that they feel may be useful. Employees can then search the repository or browse via topic. Once they find a useful ‘nugget,’ they may then contact the author(s) for further details. IT is viewed as a tool that enables ShareNet. It is a small portion of the effort. Most of the work involved change management. Siemens internally marketed ShareNet to its employees. There were a hundred internal ‘evangelists’ who trained and answered questions of employees, and monitored the KMS. Top management supported the entire effort. Incentives are given to employees who provide knowledge to the system. The sales staff quickly learned that the KMS helped them land large contracts readily.

Actually, there was a defined business need, managers and users were involved in its development, user training was carefully designed, there was a reward structure for knowledge contributions, there was a demonstrated financial payoff, and there was strong support from upper management, notably top management. One exception to the way most organizations develop KMS is that the initial interest in developing a KMS was a ground-up phenomenon. This does indeed work, and is a known approach, but for an organization to reap the full benefits of KMS, it must eventually be institutionalized.

As ShareNet evolved, it became an up to date Web-based KMS that provided a valuable knowledge repository available to all employees, thus enhancing global collaboration and competition. Other major firms have studied ShareNet before implementing their own KMS. This system has demonstrated through dramatically increased sales that it more than paid for itself several times over every year.

Discussion Questions (1000 words)

1. From your own point of view, what are the critical success factors contributed to the effective implementation of KMS at Siemens?

2. Why is it important for an international organization like Siemens to have a well- developed and solid KMS?

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