1. Information Systems for
Organizational
Performance
Group Assignment #1
EPGP 2009-10 - Term III- Group Submission
24-Dec-2009
Instructor: Prof. Dr. Prabin
Panigrahi
Submitted by:
Abhishek Pangaria - #1
Altaf Hussain Siddiqui - #4
Rajendra Inani - #27
Shikhar Mohan - #34
Tarandeep Singh - #37
Vaibhav Samant - #38

2. Table of Contents
1 What are the difficulties associated with developing knowledge management networks? ..............3
2 What has made ShareNet so successful? What has Siemens done well with ShareNet? ..................4
3 Should ICN's five product divisions be charged to use ShareNet? Why/why not? Should we
withdraw the Incentive Scheme? .........................................................................................................6
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3. 1 What are the difficulties associated with developing knowledge
management networks?
Following are the enables and constraints associated with developing knowledge management
networks (KM).
• Valuation of Knowledge – Before consumption and use, Intellectual and intangible assets
• Firms do not know, what they know
• Disconnect between silos of knowledge – CRM, Marketing, sales, service
• Localness of knowledge - High search cost for ‘right information at right time’
• Technologies to enable - Communication, Coordination, Collaboration
• Communities of practice in organization, informal networks
• Knowledge Market signals - Credentials, Expertise, Position, Education
• Business & Technology Strategy – Pre definition of Outcomes
• Organizational Control – control for consistency and creativity, Why would the players care to
use, share, transfer, renew, create knowledge?
• Information Sharing Culture – based upon contracts and trust
• Knowledge Representation – Pre-specified (static) and Constructed (dynamic)
• Organization Structure – Inclusive / insular and top down
• Managerial Command and Control – for achieving compliance and commitment
• Economic Returns – Increasing and decreasing returns
Why are such efforts hard to realize?
The design of KM should ensure that adaptation and innovation of business performance outcomes
occurs in alignment with changing dynamics of the business environment. This would prevent the
failure of KM caused by the gaps between the value these enterprises create and the value
demanded by changing market conditions, consumer preferences, competitive offerings, changing
business models, and, industry structures. In addition the design of KM must give due consideration
to moderating and intervening behavioral and sociological variables such as attention, motivation,
commitment, creativity, and, innovation to ensure that computational inputs [including enabling
technologies] and organizational inputs result in effective business performance. This would prevent
the failure of KM caused by the gaps between the data, information technology, best practices, etc.,
and the business performance outcomes.
The architects of KM cannot afford to treat strategic sustainability of business models, related
organizational cultural challenges, and, dependence of these architectures on true integrated
information flows as afterthoughts. To successfully manage these challenges, KM designers must
take a holistic approach to designing inter- and intra-organizational "systems" with due consideration
not only for the technological design, but also for the design of strategic sustainability of these
systems. This approach is expected to provide the needed balance of integration and flexibility
required for KM architectures. Organizational competence and success ultimately depends upon KM
architectures that can enable agile and adaptive enterprises skilled in creating innovative business
models driven by unique, interesting, and competitive value propositions.
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4. 2 What has made ShareNet so successful? What has Siemens done well
with ShareNet?
At the heart of Siemens’s technical solution to knowledge management is a Website called ShareNet,
which combines elements of a database repository, a chat room, and a search engine. Online entry
forms allow employees to store information they think might be useful to colleagues. Other Siemens
employees are able to search the repository or browse by topic, and then contact the authors for more
information using one of the available communication channels. In addition, the system lets
employees post an alert when they have an urgent question. Although KM implementation at Siemens
involved establishing a network to collect, categorize, and share information using databases and
intranets, Siemens realized that IT was only the tool that enabled knowledge management.
Siemens used a three-pronged effort to convince employees that it is important to participate in the
exchange of ideas and experiences and to share what they know. The challenge is managing the
people who manage the knowledge. You have to make it easy for them to share, or they won’t.
Siemens has assigned 100 internal evangelists around the world to be responsible for training,
answering questions, and monitoring the system. Siemens’s top management has shown its full
support for the knowledge management projects. And the company is providing incentives to
overcome employees’ resistance to change. When employees post documents to the system or use
the knowledge, Siemens rewards them with “shares” (like frequent-flyer miles). An employee’s
accumulation of shares can be exchanged for things like consumer electronics or discounted trips to
other countries. However, the real incentive of the system is much more basic. Commission-driven
salespeople have already learned that the knowledge and expertise of their colleagues available
through ShareNet can be indispensable in winning lucrative contracts. Employees in marketing,
service, R&D, and other departments are also willing to participate and contribute once they realize
that the system provides them with useful information in a convenient way.
Evaluate the performance of ShareNet.
By July 2002, 19000 subscribers, 53 ShareNet managers, 20000 knowledge objects, 2.5 million
shares, 300 users in reach of award.
ShareNet has evolved into a state-of-the-art Web-based knowledge management system that stores
and catalogs volumes of valuable knowledge, makes it available to every employee, and enhances
global collaboration. Numerous companies, including Intel, Philips, and Volkswagen, studied
ShareNet before setting up their own knowledge management systems. Teleos, an independent
knowledge management research company, has acknowledged Siemens as one of the Most Admired
Knowledge Enterprises worldwide for five years in a row. Siemens has realized a variety of
quantifiable benefits afforded by knowledge management. For example, in April 1999, the company
developed a portion of ShareNet to support the Information & Communications Networks Group at the
cost of $7.8 million. Within two years, the tool helped to generate $122 million in additional sales.
Ultimately, knowledge management may be one of the major tools that will help Siemens prove that
large diversified conglomerates can work and that being big might even be an advantage in the
Information Age.
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5. What are the biggest challenges it faces going forward?
The ShareNet has undergone tremendous growth, which resulted in several challenges for Siemens.
The company strives to maintain a balance between global and local knowledge initiatives as well as
between knowledge management efforts that support the entire company and those that help
individual business units. Furthermore, Siemens works to prevent ShareNet from becoming so
overloaded with information that it becomes useless. A group is assigned to monitor the system and
remove trivial and irrelevant content.
End of 2001, layoffs hit every group and division of Siemens. ICN underwent reorganization,
ShareNet placed into “Competence and Knowledge Management” department. Corporate climate is
worsening – Telecommunication sector is hard hit, Telecom companies buried under staggering
amount of debt.
Perception of ShareNet was still “Nice to have”, thus team size is trimmed. ShareNet team reduced to
3 consultants and 1 editor. “When times are bad, knowledge management becomes a dirty word”.
Serious attempts at evaluating the worth of knowledge management efforts were rare, given that it
was notoriously difficult to attach a value to the benefits delivered.
Pressure to justify expenses across Siemens – per user fee, accountability of ShareNet to the
products divisions. Challenge in deciding a price – which entailed several risks. What if one of the
divisions decided it did not want ShareNet? ShareNet should continue to operate as corporate level
service.
How should these be addressed?
ShareNet adding to bottom line - ShareNet played vital role in winning or executing 27 projects
ranging in size from Euro 60K to Euro 89 Million, in total Euro 120 million in revenues during financial
year 2000-01. It achieved cost saving over Euro 500K.
• Explore ShareNet’s potential, by rolling it to other departments like R&D, Automation and
Drives etc
• Link ShareNet to Siemens’ competence and knowledge management efforts. How it can help
to improve its processes
• Making ShareNet free of boundaries in organization. Use it for a broader mission – the
seamless exchange of knowledge across Siemens’ far-flung empire in the most effective
manner possible
• Using ShareNet for transforming knowledge between employees in organization
• PeopleShareNet – Employees across geography coming and working together.
Transformation process which can optimize business process
• Request from customer for linking with ShareNet
• Outside firms showing interest in ShareNet, wanting it to package and sell it
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6. 3 Should ICN's five product divisions be charged to use ShareNet?
Why/why not? Should we withdraw the Incentive Scheme?
No, individual products divisions should not be charged for usage of ShareNet.
If one department withdraws from usage of the system, the cost share on other departments would
increase. This would bring cyclical effect and slowly others department may withdrew due to
increasing cost. This brings instability on substance of this system.
The users would have both way contributions, by supplying knowledge for others to use and get
answer to their business requirement. It is difficult to estimate, who is going to supply or use
information from the KM for a given future period, which would be based on business needs. Thus
budgeting for such usage from any department would be very difficult.
Having this system funded at corporate level, each department would be encouraged to use this
without any additional cost but huge saving in winning and executing project. Thus, it would help to
increase usage of this system and in turn bring higher profitability to organization.
In the given though business conditions, Incentive Scheme can be withdrawn. Particularly, for the
department where this system usage is well established, it does not need such expenses. May be for
newly started department (like R&D, Automation and Drives etc.) this can be maintain till sufficient
traction is developed in those department with usage and benefit of this system.
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