Knowledge services professionals and knowledge strategists are constantly on the look-out for advice about how to build (or if built, how to strengthen) the business case for knowledge services.
It’s a subject that keeps coming up, one that keeps us all interested, and we like to hear what other people have to say.
One approach is to think about Return on Investment (ROI), and how knowledge services and ROI connect, an important subject about which my friend Tim Powell and I share many thoughts.
I’m pleased now to note that Powell, President of The Knowledge Agency® here in New York City, has provided us with further insight.
Powell’s post – Metrics That Matter – gives us a useful and practical framework for our discussions with others in the company, particularly management leaders with resource allocation authority. In his post, Tim notes that in his upcoming KVC Handbook 4.0, he identifies three classes of metrics that can be “applied to knowledge processes and assets”: inputs, outputs, and outcomes. He makes very good distinctions in describing the three metrics, and provides useful, solid definitions.
Dale Stanley is also experienced in the area of management metrics and he, too, alludes to the concepts relating to inputs/outputs/outcomes. In his conversations with me on this subject, Dale (SMR International’s Senior Consultant and Director of Literature Resources at Gilead Sciences) shifts the conversation to speak about the much-talked-about topic of “time-saved” in justifying KM/knowledge services solutions. He cautions us not to get too excited about the “time-saved” metric unless we’re willing to make some distinctions of our own.
“It’s too easy,” Stanley says, “to get caught up in confusing output vs. outcomes or, from another point of view, taking a narrow systems orientation vs. business impact orientation.”
As knowledge strategists, Stanley reminds us, we have to make the distinction between time-saved in “information seeking” (an output) vs. time saved for the enterprise (a value outcome).
“While there is some limited satisfaction in saving some time in information seeking,” Stanley says, “what about time saved in making better decisions with heretofore not accessed knowledge or information? What about the accelerated innovation that happens when scientists ‘stand on the shoulders’ of those who came before them? What about the time saved in making informed decisions that are less likely to have to be ‘re-decided’ when proven wrong? To be sure, output-type measures are okay for measuring the efficiency of your operation – fine. But if you’re looking for ways to express the value of what you do, look for outcome-type data.”
“Asking good questions is key: If I ask ‘Did our KM system save you any time finding information?’ the answer has limited use. And, as Powell points out, is potentially misleading due to the phenomenon of ‘satisficing’ (i.e., people stop looking after a while and just go ahead and make their decisions). But if I ask, ‘Did the knowledge save the enterprise any time?’ I might get some very interesting, relevant, outcome-type answers. Even more interesting to for-profit organizations is then applying the ‘time is money’ axiom.”
And the bottom line for us as knowledge workers, strategic knowledge professionals, knowledge strategists?
Easy: as we work to inform executives and build our business case, we just have to remember to keep the distinction between outputs and outcomes in mind.