Albert Einstein put his finger on it: ?Computers are incredibly fast, accurate and stupid; humans are incredibly slow, inaccurate and brilliant; together they are powerful beyond imagination.?

The most powerful weapon business has in its armoury is knowledge. Mapping it effectively adds massive value to your company?s bottom line. But few know how to create, measure or use it. Many don?t even know how to define it. Most confuse it with data or information.

Defining what each of the three words means will keep the sociologists busy for years. In a nutshell, data equates to a basic record. Make the right connection between different pieces of data and you have information. If you?re then able to glean insight from that information, and it adds value to what you already know, then you?ve got knowledge.

Few realise the immense potential of knowledge and expertise which lies within their company ? until it is no longer available. Over the next decade, corporations will face the lowest level of experience and expertise in history because of restructuring and attrition.

The last few years of corporate restructuring have witnessed the babies ? experienced middle managers and those with expert knowledge of their customers ? thrown out with the corporate bath water. Unfortunately in their haste to reduce headcount and supposed wastage or inefficiency, few businesses noticed they had thrown out much of their expertise as well.

The good news is that knowledge management marks the first step to placing a plug in the hole. Not only can an effective knowledge management system help you avoid severe haemorrhaging of expertise, but it can provide benefits beyond that.

Knowledge is becoming more important as a corporate currency as we rocket into the post-industrial era, and senior management is forced to identify and communicate clearly and concisely with its businesses, which are growing more numerous and diverse.

However, newly merged organisations are at risk from a knowledge management crisis, according to a survey conducted by information management specialist, Global Recall. The company questioned 50 finance houses about the effects of mergers on the control of corporate information.

Merged organisations find it difficult to roll out IT systems quickly, the survey revealed. This means businesses that have recently changed their infrastructure are unable to manipulate company data effectively.

Martin Garland, Global Recall?s chief executive, said: ?One of the biggest challenges after an acquisition is to bring together the working practices and management information systems of the two companies. This is crucial to keeping control of corporate knowledge.

?A knowledge management crisis could occur if proper measures are not taken to restructure the IT systems in line with overall corporate strategy,? Garland warned.

Part of the problem however is knowing just what constitutes a knowledge management system in the first place. According to analyst Gartner Group, users should draw a distinction between information management ? which uses technology for information collection, storage and control ? and knowledge management. The latter Gartner argues is a discipline that uses technology to share and ?leverage information for innovation?.

The distinction is not clear because IT buyers are confusing the two, and are being deliberately hoodwinked by the industry.

Knowledge and information management use many of the same technologies. These include electronic workplace technologies, such as groupware, information retrieval, data mining, document management, email, push communication technology, Web browsers and intranets.

Also, to drive sales, vendors are repositioning and renaming products as ?knowledge management solutions?. So it is easy to be confused when last week?s search engine is this week?s knowledge manager.

There is also confusion over databases, which can be mistaken for knowledge bases. Although knowledge management often results in new databases, it does not create new production databases.

?Knowledge management enables individuals and collaborative groups to identify, capture and share information, while information management uses specialised IT staff to identify, capture and process information,? says a recent Gartner research note.

In very broad terms, information management collects, processes and condenses information so you can manage it efficiently, whereas knowledge management?s objective moves in a quite different direction, enabling information to be re-used and shared to allow the expansion of knowledge.

Owen Wilson, a knowledge management specialist at Anglo-Dutch consultancy CMG, says: ?Increasingly, there is an important role for IT to play in a knowledge management system?s creation. This role is primarily in the deployment and maintenance of the IT backbone and the development and integration of tools to assist in uncovering knowledge locked away in electronic data stores.?

A comprehensive software solution to the problems of managing knowledge does not yet exist however. All vendors currently offer only partial or niche solutions.

Tom Davenport, director of information management at the University of Texas, says: ?Perhaps some day there will be a SAP of knowledge management, where you?ll just plug in that KM module alongside finance and materials management, but it doesn?t exist today.?

Davenport feels that IBM/ Lotus, Microsoft, or Netscape should be looking ahead to acquire knowledge-oriented software to string together a broad solution. Such a solution would include four key components: storage and distribution; search; analysis; and content.

He says: ?Because Notes/Domino and Web tools are the knowledge distribution engines of choice, the companies that provide them are likely candidates to pull everything together.? But he adds that it is likely that knowledge will be increasingly stored in general-purpose, not knowledge-oriented, databases.

Database companies are expected to complicate the story by hyping knowledge management as a buzzword. Oracle?s Universal Server could well be renamed the Universal Knowledge Server, and it would be no surprise to see Informix Software?s Data Blade become the Knowledge Blade.

The search tool companies are already heavily into knowledge-oriented marketing. Verity, Fulcrum and Excalibur, the leading search tool companies, describe themselves as KM companies. ?Trouble is, none of these companies is making money; search has become a commodity, so they can?t pull together any broad knowledge capability,? says Davenport.

Vendors are all working on approaches that would let users create an unstructured query against multiple types of data, information and knowledge from sources as varied as textual databases, data warehouses and photo galleries. Analysis turns numbers and raw text into something of value to a business.

In terms of text, process technology, the traditional expert systems or artificial intelligence (AI) vendors are virtually extinct, but there are still a few thriving pockets of AI-based approaches. One vendor, Inference, dominates the case-based retrieval market and is trying to expand beyond the customer support arena. Many other types of analysis that focus on quantitative data ? such as data mining and visualisation tools and neural networks ? are also increasingly sheltering under the knowledge management umbrella.

?However, like text-based tools, and despite the hype, these still require very bright and analytically inclined humans to take advantage of them,? says Davenport.

Finally, content may not be software, but it is increasingly being enhanced by software. New companies, such as US companies Digital Knowledge Assets and DigitalThink are packaging knowledge ? articles, books, case studies, even business school courses ? and combining it with Web software for distribution to clients. Several consultancy groups, including Arthur Andersen and Ernst & Young are also dispensing the knowledge of their professionals over the Internet using ?pull? and ?push? content-distribution technologies. ?Many clients, on seeing the impressive initiatives that consultants have created internally, want the capability more or less replicated in their own organisations,? says Davenport.

Virtually every consultancy will tell you that its knowledge management methodology is a mix of ?people, process and technology?. Since most of the major concerns have a similar approaches to knowledge management, you might want to select among them on the basis of their ancillary competencies.

?Remember, you?re hiring not a firm but a few individuals. Make sure you get the credentials of your engagement team, not just those of the entire firm,? says Davenport.

?Above all, look for evidence that both software and services are truly knowledgeable about knowledge.?

Information management: A quick guide

Source: Gartner Group