Quantified KM value story 124

Another example of quantified value delivered from KM – number 124 in a continuing series

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This story comes from the same article from HBR I referenced yesterday, entitled “What managers need to know about social tools“.  It shows some of the value in seeking and sharing knowledge in a networked world. Here’s the story.

“At the insurance company we studied, one employee, Sheila, was asked by her manager to put a hold on her current project and perform an urgent analysis for a new vertical market. She told her manager that the analysis would most likely take two weeks, pushing her current project past the deadline and over budget. The manager was willing to pay that price.

“As Sheila began to dig into the problem, she remembered a series of exchanges on the internal social tool among colleagues in another department about a project they were working on in that same vertical market. With this metaknowledge, she sent them a note asking if they could suggest where to start. They replied that they had completed a market analysis and asked if she would like to see it. Sheila said that when she received the report, “I couldn’t believe it. It was exactly what my boss asked me to do. This just saved me two weeks, and it saved my project over a million dollars. I had no idea they were working on this. Neither did my boss.”

View Original Source (nickmilton.com) Here.

Quantified KM Value stories numbers 121 to 123 – ROI of knowledge retention

From this published article comes three examples of quantified value from KM.

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The article is entitled “Assessing the Business Value of Knowledge Retention Projects: Results of Four Case Studies”, and much of it comes from the work of Larry Todd Wilson, who operates a Knowledge Harvesting service.

Larry always tries to determine the ROI of the work he does, and he and his co-authors share the following 3 case stories:

The business result of harvesting (a senior forestry manager) expert’s knowledge was a single source for understanding how to manage delinquent accounts and how to respond to bad debt events, e.g., bankruptcy, collections, etc. The final deliverable was an interactive tool that was developed to capture and disseminate the key decisions relating to the management and response to delinquent/bad debt events. The estimated cost of developing the project was approximately $33,000, with a recognized benefit of $150,000. The immediate benefits to the company included not only improved productivity gains due to bad debt management practices being deployed, but also the ability to move forward without replacing the senior manager. The total estimated benefit over a three-year timeframe is approximately $450,000, with a net present value of approximately $334,000. Therefore, the return on investment of this project was approximately 10:1.

The deliverable captured the expertise from the technical (call-centre) expert and developed an interactive tool around the key decisions relating to the call center, eGain. The estimated cost of developing the project was approximately $12,000 with a recognized benefit of $41,000. The total estimated benefit over a three-year timeframe is approximately $124,000, with a net present value of approximately $89,000. Therefore, the return on investment of this project was reported as approximately 6:1. The efficiency gains from this project would include transferring 60% of the work from a high-cost employee to a lower-cost employee. 

The deliverable captured the expertise from the Senior Systems Analyst and developed an interactive tool around the key decisions relating to troubleshooting the (IT portfolio management) tool. The estimated cost of developing the project was approximately $13,000 with a recognized benefit of $69,000. The total estimated benefit over a three-year timeframe is approximately $207,000, with a net present value of approximately $156,000. Therefore, the return on investment of this project was reported at a greater than expected ratio of 10:1. Since the expert quickly adapted to the harvesting process, it took less time for the harvester to capture his valuable information; hence, reducing the time and cost required for the harvesting process.

View Original Source (nickmilton.com) Here.

Quanitified KM value story #120 – Petroleum Development Oman

Our list of KM Value stories reaches number 120, with this story from Petroleum Development Oman (PDO). See the complete list.

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The story was presented last week at the UK KM Summit by Hank Malik, who gave an excellent presentation on how standard project-based Knowledge Management has been developed and deployed at PDO.  The elements of KM Hank described included 
  • Lesson Learning, 
  • Best practices, 
  • Knowledge Assets, 
  • Content Management, 
  • Knowledge Retention and 
  • Communities of Practice; 
in fact all the core elements of project-based KM, plus a complete Governance layer and a Processes toolbox.
Hank described a whole set of acheivements from the KM program, including the following quantified benefits delivered to date:
  • 5,554 Lessons Learned captured to date across over 50 projects,
  • Over $740 M savings,  and $80M realised for in-country value.

Well done to Hank and the KM team at PDO!

View Original Source (nickmilton.com) Here.

Quantified KM value story number 119 – finding knowledge at Accenture

One of the ways in which KM adds value is through helping poeple do work faster and better.  Here is a story of howAccenture estimated that value.

Accenture make documented knowledge available to their staff through a portal known as KX. IN order to estimate the value delivered through KM they decided to focus on one component of Knowledge Management –the use of KX – and to focus on one single benefit – the savings in time delivered through the use of knowledge gained through the KX portal.

They estimated these savings through a survey, which asked the following question

“Please estimate the amount of your time that you saved during the last two weeks as a result of this knowledge.

“During the last 2 weeks, this information saved me AT LEAST:”
“During the last 2 weeks, this information saved me AT MOST:”

The results from this survey were used to calculate average time savings, and thus average cost savings.  They found that for annual KX costs to the sample population of $170,000 they were delivering savings of $2,400,000.

This equates to a 2500 percent Return on Investment

View Original Source (nickmilton.com) Here.

Quantified value story number 118 – saving patient cost in healthcare

Here is a reference to a great story about the value of simple KM in healthcare

The story is taken from a California State University blog on KM, and references an earlier Times Magazine story, available to subscribers. The Time magazine is ostensibly about doctors’ pay, but also describes how sharing and institutionalizing good practices (although they don’t call them that) can significantly reduce costs, improve outcomes for patients…and keep doctors happy.

The blog quotes the following example of a very simple KM practice, which shows how much difference even a best-practice checklist can make (and also how unpopular this was, until it began to deliver benefit).

The first thing he (the head of surgery at Geisinger) and his team did was take 20 general steps all surgeons follow throughout a bypass episode and try to sharpen them in a way that would remove as much chance and variability as possible, going so far as to spell out the specific drugs and dosages doctors would use. The result was an expanded 40-step list that some surgeons balked at initially, deriding what they called “cookbook medicine.” 

Once doctors began following the expanded checklist, however, they grew to like it. After the first 200 operations — a total of 8,000 steps — there had been just four steps not followed precisely, for a 99.95% compliance rate. A total of 320 bypasses have now been performed under the new rules. 

“There are fewer complications. Patients are going home sooner. There’s less post-op bleeding and less intubation in the operating room,” says Casale. What’s more, the reduced complication rate has cut the per-patient cost by about $2,000.

View Original Source (nickmilton.com) Here.

Quantified value stories in KM – numbers 115, 116 and 117

As part of our series of stories and examples of quantified value from KM, please find below three examples from a 2015 article in the UAE National, entitled “Knowledge management is power for companies”

An example of KM in action is the case of El Paso Corporation – a 5,000-employee North American provider of natural gas and related products. To maximise the benefits of a new organisational structure and encourage communication, El Paso decided to try a KM programme focused on business opportunities and challenges. Its aim was to foster expertise within the workforce and share technical knowledge with a scorecard used to measure and report on the programme. Its elements included: savings, improvements, successes, costs and milestones. In the first year, the goal was to save the organisation US$500,000, but it delivered $1.2 million in savings.

“A recent best-practice transfer between KOC and other k-Companies in Kuwait, where technology and know-how have been transferred between companies resulted in savings of several million Kuwaiti dinars,” (Abdul Jaleel Tharayil, project leader of Knowledge Management Practice for Kuwait Oil Company) says.

“Another example is an internal collaboration between deep drilling and development drilling, which brought forth a reduction in non-production time by introducing a change in casing design, leading to savings of around 250,000 dinars.”

The Kuwaiti Dinar is currently worth about  3.3 US Dollars.

View Original Source (nickmilton.com) Here.

Quantified value stories 112, 113 and 114; three examples from customer service

From a blog post called “In praise of Knowledge Management” come the following examples of quantified KM value, all from customer service centers;

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  • “A leading European mobile phone retailer saw a stark increase in contact deflection of 27.3 percent while markedly improving NPS  (Net Promoter Score) by 12 base points after implementing a knowledge management system”.
  • “One of the largest global insurance providers realised a massive decrease in agent training costs by 50 percent, and a sharp drop of 30 percent in complaints”.
  • “An Australian Government agency saw its customer satisfaction levels surge to 93 percent as well as raise agent satisfaction and reduce handling time by 53 percent”.

The article concludes that “it is these kinds of success rates and improvement which make knowledge management a serious contender for inclusion in any list of top ten contact centre technologies”.

View Original Source Here.

Quanitified value story number 111, multiple benefits at Goodyear Tire company

As the 111th entry in our ever-growing list of examples of Quanitified Benefit from Knowledge Management, here is a story on value and value measurement at Goodyear Tire Company, described by KM World Magazine.

Goodyear use what they call “value pyramids” for each key KM initative, to track knowledge impact on delivery results, Using this approach, they have identified the following KM value impact:

  • a 50 percent reduction in development cycle time;
  • associates using KM-developed Learning Journals achieve competency three months faster,
  • project teams using the Knowledge Sweep method/service have saved up to eight weeks in development time, and
  • the ACE Lessons Learned method has resulted in numerous updates to design standards.

This has been delivered through:

  • findability skills,
  • online collaboration habits,
  • expertise definition and location,
  • lessons learned definition and sharing,
  • use of and benefits of tagging,
  • cross-functional and cross-geographical valuation,
  • knowledge worker recognition methods and
  • multigenerational team approach.

View Original Source Here.

Quantified KM value story 110 – cutting development cycle time by 2-3 years at NASA

As the 110th entry in our ever-growing list of examples of Quanitified Benefit from Knowledge Management, here is an example from NASA

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The example is given by Jim Rostohar; the CKO of NASA’s Johnson Space Centre.

In the Space Centre, KM is used mainly to support programs and projects, and the Engineering Directorate. One of the tools used in this support is a new contextual search engine.  Jim describes the benefit as follows:

If this tool wasn’t available, the Orion team would have had to decide what level of program resources should be applied to develop and certify contingency measures for the Orion capsule. According to the Engineer, development of a test article would take two to three years and add an additional cost of several million dollars.

View Original Source Here.

Quantified KM value story 109 – Navidad Energy

The best place to find KM value stories is in well-metricated environments, where the effects of learning are easily measured. 

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Oil drilling is the ideal environment for seeing KM value. Drilling is very well metricated, and the time between learning something and measuring the results of that learning is measured in weeks and months rather than years. Drilling is also an expensive operation, so the value of KM tends to run into millions of dollars.
This slideshare from a 2015 presentation looks at organisational learning and KM in oil drilling, and the effects of learning curves on performance. Slide 12 discusses how the steepness of the learning curve affects overall performance, as we discussed here, and slide 14 makes the point that learning typically accounts for 55% of the cost of the first 6 wells in a drilling program.  This 55% can be reduced through good knowledge management
Navidad Energy introduced a KM program to address this potential value. They introduced a KM coach, captured lessons, created a lesson management system, developed and continuously improved operational best practices, and discussed lessons when planning and when changing shifts.

As a result, over a 13 month program, they delivered direct savings from their learning initiative of $9,2 million, with an ROI of 10:1.

View Original Source Here.