Knowledge Management Cases in Asia/A Case Study on the Effects of Implementing a Customer Knowledge Management System to a Public Transport Corporation

Wong Man Chit,Chris Yuen Ching Yee,Christie Chan Yin Ling,Elza Chan Yuk Lin,Samantha Cheng Leong, Leo

Abstract

In this information age, Knowledge Management (KM) has become the main competitive strategy of a company. Especially Customer Knowledge Management (CKM), which emphasizes on knowledge management of their customers, is the main successful factor of current corporations. This chapter is based on an empirical investigation of customer knowledge sharing system from knowledge professional. Through interviewing the Customer Knowledge Management Officer, this chapter traces the interactive processes between knowledge management practices within the corporation and the general organizational context. Base on the case study, we summarize our finding relevant to Knowledge Management and Customers Knowledge Management. We conclude the KM management in our case study has played as a critical role in effective performance of knowledge management practice.

Introduction

It cannot be denied that the collaboration and sharing of knowledge have clear benefits for people and enhance business performance. The 21st century is the age of knowledge pioneers. Many large organizations begin to realize that keeping data and information is not enough to maintain competitive advantage in the business world.

In response to this challenge, organizations have been experimenting ways for the utilization and transfer of assets so as to provide the expected products and services for the customers.

On the other hand, many organizations nowadays may only know their customers but not understand them. It is better to learn from customers their experiences in using your products and services. Without an increased awareness and use of organizational customer knowledge throughout the entire organization, the organization is expected to loss of competitive advantage and ability to provide the products and services meeting the customer needs.

In this chapter, we would like to investigate how the concepts of Customer Knowledge Management (CKM) are implemented in the Asian public transport organization, and learn useful knowledge management concept from experts. Furthermore, we would like to illustrate the background information of CKM and corporation by reviewing a number of articles and journals. According that, number of KM tools and strategies will also be analyzed.

Besides that, we have interviewed a staff of one of the public transport corporation in order to investigate the particular industry deeply. For instance, strategies and benefit of the organization, whether the KM system help their managers to make decision and future development of the system etc.

Literature Review

The Definition of Customer Knowledge Management (CKM)*

Customer Knowledge Management (CKM) is concerned with the management and exploitation of customer knowledge (Rowley, 2002). It comprises the processes that are concerned with the identification, acquisition, and utilization of knowledge from beyond a firm’s external boundary in order to create value for an organization.

Paquette (2006) describes an important aspect of customer knowledge is that it is knowledge not owned by the firm, but by the others who may or may not be willing to share such knowledge. The processes that a firm employs to manage the identification, acquisition, and internal utilization of customer knowledge are collectively referred to as customer knowledge management.

The Background of CKM*

In the past, many researches have used customer knowledge and customer information interchangeably, causing confusion between these two terms. According to Blosch (2000), understanding “how each customer interacts with business processes is to gain knowledge about that customer”. Gibbert, Leibold, and Probst (2002) would describe this only as customer information, as it is knowledge about the customer and is gained without a predetermined close interaction or partnership. However, the emphasis is on acquiring information about the customer but without interaction.

Davenport (2001) suggests that knowledge about the customer is only the first step, and organizations should create processes to manage the relationships they discover with this information to create profitable interactions in a better way. The focus remains with learning about the customer’s needs through different channels. In fact, the customer’s involvement in the knowledge process is still passive.

In recent years, a concept on customers as partners in the knowledge creation process has been presented by Sawhney & Prandelli (2000). Customers generate knowledge with an organization so as to create value for both of them by sharing knowledge residing within customers to create better products and services. Both organization and customers work together with common goals, and the customer becomes an active and key participant in the knowledge generation process.

Hierarchical model of CKM*

Based on taxonomy of Customer Knowledge (CK) and definition of CKM, considering the degree of the enterprise’s CK application as well its effect on the management, CKM is divided into three hierarchies in theory. They are independence of enterprise, active acquisition and knowledge cooperation (Feng & Tian, 2005).

Within the independence of enterprise level, enterprise makes use of is the ‘knowledge that is prepared for the customer’. It is basically internal knowledge with little consideration of the customer’s needs. Active acquisition means enterprise actively obtains ‘knowledge about the customer’ to apply it in the decision and strategies of production and management activities. Lastly, knowledge cooperation includes those enterprise makes use of not only ‘knowledge about the customer’, but also ‘knowledge from the customer’. In this layer, it is easy for the enterprise to cooperate with corporate customers, but not so easy with individual consumer, though there might be exceptions.

According to Feng & Tian (2005), there might not be such clear hierarchical classification of CKM in reality. Active acquisition may occur on the level of independent of the enterprise and vice versa. Similarly, there also exists the same relation between active acquisition and knowledge cooperation. Every layer is permeable and interlaced. The objective of this classification is to find out the general rule in CKM development process. As enterprises from different industries offers different types of services and have different focus customer groups, the enterprise should adopt a contingency approach according to its specific situation. Most enterprises in China are now at the levels of ‘independence of enterprise’. The level of ‘active acquisition’ is the final target and trend of CKM. Therefore, the following part of this article takes the enterprise on the level of ‘active acquisition’ as examples to inquire into the successful implementation of CKM.

Service Gap Analysis applied in CKM – the SERVQUAL Model*

Managers in the service sector are under increasing pressure to demonstrate that their services are customer-focused and that continuous performance improvement is being delivered. Given the financial and resource constraints under which service organizations must manage it is essential that customer expectations are properly understood and measured and that, from the customers ’ perspective, any gaps in service quality are identified. This information then assists a manager in identifying cost-effective ways of closing service quality gaps and of prioritizing which gaps to focus on – a critical decision given scarce resources.

While there have been efforts to study service quality, there has been no general agreement on the measurement of the concept. The majority of the work to date has attempted to use the SERVQUAL (Parasuraman et al. , 1985; 1988) methodology in an effort to measure service quality (e.g. Brooks et al., 1999; Chaston, 1994; Edvardsson et al. , 1997; Lings and Brooks, 1998; Reynoso and Moore, 1995; Young and Varble, 1997; Sahney et al. , 2004).

One of the aims of this study involves the use of SERVQUAL instrument in order to ascertain any actual or perceived gaps between customer expectations and perceptions of the service offered. Another aim of this paper is to point out how management of service improvement can become more logical and integrated with respect to the prioritized service quality dimensions and their affections on increasing/decreasing service quality gaps. In the following, after a brief review of the service quality concept, the model of service quality gaps and the SERVQUAL methodology is demonstrated and an example is presented to pinpoint the application of the SERVQUAL approach. Then, after a discussion, major conclusions are derived.

According to Zeithaml, Parasuraman & Berry (1990),

Seven Service Gaps*

· Gap1: Customers’ expectations versus management perceptions: as a result of the lack of a marketing research orientation, inadequate upward communication and too many layers of management.

· Gap2: Management perceptions versus service specifications: as a result of inadequate commitment to service quality, a perception of unfeasibility, inadequate task standardization and an absence of goal setting.

· Gap3: Service specifications versus service delivery: as a result of role ambiguity and conflict, poor employee-job fit and poor technology-job fit, inappropriate supervisory control systems, lack of perceived control and lack of teamwork.

· Gap4: Service delivery versus external communication: as a result of inadequate horizontal communications and propensity to over-promise.

· Gap5: The discrepancy between customer expectations and their perceptions of the service delivered: as a result of the influences exerted from the customer side and the shortfalls (gaps) on the part of the service provider. In this case, customer expectations are influenced by the extent of personal needs, word of mouth recommendation and past service experiences.

· Gap6: The discrepancy between customer expectations and employees’ perceptions: as a result of the differences in the understanding of customer expectations by front-line service providers.

· Gap7: The discrepancy between employee’s perceptions and management perceptions: as a result of the differences in the understanding of customer expectations between managers and service providers.

For example, when someone goes into a fast food restaurant to a hamburger for meal, they are expecting exactly what they are accustomed to getting (a quick and tasty burger). If it takes 15 minutes to get a hamburger that does not even have the famous special sauce on it, the customer's perceived service of this fast food restaurant is going to drop.

A key question that many organizations may ask is how to understand their customers in more details? There is a famous Chinese saying, “If you are not fish, how you know that the fish is swimming happily in the water?” In order to meet the customers' expectations, it is better for us to learn from their experience in using your services and products.

Although the concept of customer knowledge is relatively new in the field of knowledge management, we would try to study the implementation of Customer Knowledge Management (CKM) in a public transport corporation so as to discuss this concept in greater depth.

The Need for Knowledge Management in Customer service sector*

As businesses continue to forge ahead in twenty-first century, knowledge management has materialized as the only real differentiator. According to Larry Prusak, the executive director of the IBM Institute for Knowledge Management, “In the emerging economy, a firm’s only advantage is its ability to leverage and utilize its knowledge.” To accomplish the knowledge production and integration processes, an organization needs to foster collaboration among all individuals and to codify the resulting insights in knowledge base repositories for self-service access by others. This will enable knowledge management to reach its goal of facilitating the delivery of the best knowledge to the right person at just the right time. With this knowledge, people are empowered to effectively solve problems, make decisions, respond to customer queries, and create new products and services tailored to the needs of clients. (John M. Leitch and Philip W. Rosen 2001)

Knowledge management solutions for Customer service*

Companies that are winning in this environment provide “stand-out” customer service by using knowledge to empower contact center agents and drive self-service interactions. In delivering KM solutions to world- class contact centers and self-service operations, the article mentioned six practices. (Egain trusted by Leaders 2006). They are:

  * Quantify value
  * Build the right team
  * Avoid the “Swiss Chess” syndrome
  * Maintain velocity
  * Balance “Ivory Tower Knowledge” with “Street Smarts”
  * Provide flexible content access

Integration of Customer Relationship Management and Knowledge Management*

To achieve the goal of providing a solution for the process of the customers, enterprises need to focus on three sorts of knowledge in CRM processes. They make up what we consider to be customer knowledge. (Adrian Bueren, Ragnar Schierholz, Lutz Kolbe, Walter Brenner 2004).

  * They need to understand the requirements of customers in order to address them. This is referred to as “Knowledge about customers”
  * The information needs of the customers in their interaction with the enterprise require “ knowledge for customers”
  * Finally, customers possess knowledge about the products and services they use as well as about how they perceive the offerings they purchased. This “Knowledge from customers” is valuable as it feeds into measures to improve products and services. Efforts need to be made to channel this knowledge back into the enterprise.

Condition for successful CKM implementation*

CK acquisition is an important task in CKM. Compared with the knowledge of the employees in the enterprise, CK is more difficult to obtain. Because customers spread out in different regions or even in different countries, it is impossible for the enterprise to get “knowledge about the customer” and “knowledge from the customer” by face-to-face communication with all customers. Neither is it necessary to do so in most cases because of the cost, time and energy involved. But CK is vital to the enterprise. It is the inevitable choice for the enterprise to obtain CK by means of information technology. How could we guarantee to successful CKM implementation? According to the article written by Feng & Tian (2005), they pointed out three factors which lead to the successful CKM implementation. These three factors are adopting a customer intelligence system (CIS), establishing a comprehensive CK system by obtaining tacit CK and organizational guarantee to CKM implementation.

According to Forcadell, F. J., & Guadamillas, F. (2002), they had point out that it is important to have a well-developed knowledge management strategy, no matter it is CKM or KM. A case study on Irizar, which is a maker of luxury coach bodywork, has been quoted in the article. They also pointing out seven success factors in the strategy's implementation of Irizar, they are: effective use of KM tools, high innovative capabilities from KM, replacements of organizational structure, well-managed valuable human resources, strategic leadership and good corporate culture.

Challenges of CKM*

The management of knowledge in CRM processes is a critical success factor; however, there are some challenges of managing customer knowledge.

Handling the entire customer relationship is a knowledge-intensive application that calls for the full gamut of applications for capturing information from a variety of sources and providing the tools to search, access, query, mine, categorize, aggregate, analyze and segment. According to Subhash Gupta, "We need to integrate information about the customer and channels of communication with the customer, so that the message to them is consistent." This calls for a great deal of technology and expertise in gathering total customer profiles. It includes not only demographic and psychographic profiles, but a complete profile of the customer's specific relationship with the company, which may range from purchase and credit history and profitability analysis to all forms of communication across all the company's channels, including the retail store, the catalog, the telemarketing center and the Web site for e-commerce. Given the volume and complexity of information involved, Gupta believes that companies will go to the database service providers to help them turn all that information into actionable knowledge. (Jim Tighe, 1999)

In particular, the challenge to ensure a consistent knowledge flow from the point of development of knowledge about the customer (in marketing, sales, and service) to the point of utilization, where the knowledge has to be presented in adequate form and complexity is far from being solved. Another subject of considerable relevance is the management of customer service. One of the challenges is the use of multiple communication channels to address customer service needs. All companies show further potential to exploit self-service technologies with the aim of increasing service quality and decreasing service costs. Using these technologies will raise the question of how to synchronize different communication channels to ensure consistency towards the customer. (Henning Gebert, 2002)

In order to address the needs of customers, some companies utilize different information sources provided by an internal unit. The content was mostly disseminated via email. While this was possible without further investments in the technical infrastructure, each employee had to organize his or her content individually and new employees did not have access to older information. Therefore, a knowledge platform was created using basic web technology which offered the same information as email with a certain time delay. Yet, with an increasing amount of content, the navigational structure eventually became more and more cluttered. In addition, communication and knowledge exchange, which were based primarily on documents, were not entirely satisfactory. As a result of the use of email, team members could never be sure to have the most up-to-date version of a document. (Adrian Bueren, 2004)

Research Methods

A qualitative approach was used to analyze all of the data provided by Dr. Leung, Customer Knowledge Manager of the researched company. Therefore, it was based on a single case study. Semi-structured interviews, e-mail communication and extensive access to secondary data on the web will be adopted in this study.

The main fieldwork was conducted a semi-structured interview through phone and e-mail with Dr. Leung. We would ask 4 types of questions such as Simple Fact, Open End, Judgment and Comparison of Fact questions in our interview question. All information collected from the interview was encouraged to express themselves in their own terminology and experience.

Furthermore, we will analyze all of the data collecting from the interview and Dr. Leung’s presentation PowerPoint as our case finding. After capturing ideas from the discussing forum and draft version, we would further modify our work according to peer opinions.

[1]Possible Questions for interview

Case Study from Dr. Leung

It is a valuable chance that Dr. Leung is our case study. Not only discussion in e-mail, we also send questionnaires and take phone interview with Dr. Leung in order to take a deep and detailed study from Dr. Leung. Although we cannot interview Dr. Leung face to face, we can ask him any question and discuss any problem with him through phone and e-mail.

Now, let me introduce the background information of Dr. Leung. He is one of the Funders and Execo in Knowledge Management Development Center. Besides that, he is a senior executive and a fellow of a quality management association. Therefore, Dr. Leung really plays an important role and is well-known in the Knowledge Management of Hong Kong.

As Dr. Leung has rich experience in managing Customer Knowledge in the researched company. We learn lots of Customer Knowledge Management (CKM) from his sharing. He point out that without an increased awareness and use of organizational customer knowledge throughout the entire organization, the organization is expected to loss of competitive advantage and ability to provide the products and services meeting the customer needs.

First and foremost, Dr. Leung introduced the Gap 1 and Gap 5 of SERVQUAL Model, which is the difference between customer expectations of service and perceived service. If expectations are greater than performance, then perceived quality is less than satisfactory and hence customer dissatisfaction occurs. In fact, there are totally five gaps in SERVQUAL Model, but Dr. Leung only selected two of most important gaps to share with us. Furthermore, Dr. Leung also mentioned that the researched company recognize the importance of good management in CKM to develop their scheme to control customer data for a long time.

On the other hand, feedback about customer experience from specific service encounters soon after the interaction occurs. He introduced there are number of tools to collect such information, such as telephone interviews, e-mail, website and fact-to-face interview. In addition, all of this information can be further divide into three categories, which are “for the customer”, “about the customer” and “from the customer”. Knowledge for customer is generated in the process within the enterprise, such as research and development. In a simple term, it is the product knowledge from service supplier to customers. Then, knowledge about customers is the knowledge about customer segments and individual customers. Information collected from surveys, service management and complaint handling are example of knowledge about customers. Lastly, knowledge from customers is captured from customers basing on the fact that customer gain their own expertise while using the product or service.

On the other hand, all information can also been classify into three types of customer knowledge. They are data-derived knowledge, human customer knowledge and tacit-unstructured, difficult-to-express knowledge.

Lastly, Dr. Leung gave us a real example of how the researched company maintains CKM. It is a meeting called Passenger Liaison Groups (PLG) Meeting, aims to invite university lectures to provide opinion from a forum for face-to-face exchange of opinion among passengers and organization management.

Findings & Analysis of the Public Transport Corporation

Organizational background of the Asian Public Transport Corporation

The researched company was established in 1982, that providing high quality mass transport services in Asia. It is one of the world's most successful railway operators: each day it carries about 1.5 million passengers on its 113-kilometre network. In addition to its core territorial rail services, it also operates through train passenger and freight services.

It is also active in property development, property services and related commercial activities. As the network extends further, it spurs additional social and economic development in these fast-growing communities, and increases their appeal as places to live and work.

Over the years, the Corporation has demonstrated its commitment to fulfilling its role as a socially responsible corporate citizen through an extensive range of community programmes. The Corporation receives no government subsidies, is entirely self-financing, and has been consistently profitable since 1985.

Benefits of communication with customers

We found that there are several benefits that can result when the public transport corporation attempt to communicate thoughtfully and occasionally with customers about their products or services. Such kind of dialogues can obtain better information on what the customers needs, maintain a closer relationship with customers, share across the organization of what customers expect, make change of cultures within the organization and so on according to this case.

Furthermore, the information which is gained from communication with customers is lead to improvements in overall corporation services and products generally. It also help the corporation better serve the needs of customers and enable the corporation to better understand the customers' expressed. In addition, be in touch with the customers can pinpoint potentially effective approaches that may help address some of the customers’ concerns.

In this case, we have discovered some tools which used to gain feedback from customers in this public transportation corporation. They are telephone interviews, email, web site, interactive voice response (IVR) surveys or interview and face-to-face interview. Those feedbacks about customer experience from specific service encounters soon after the interaction occurs. Perhaps you will ask which is/are the most essential or efficient feedback tool on the customer knowledge approach within this cooperation. In fact, the choice of tools for use is all depending on the objective and scope of the study.

Besides, we investigated that a successful communication should clarified through active listening and interaction with customers. Here are some hints on establishing an effective responsiveness from your customers, they are: identifies needs of customers by asking questions and listening actively, encourages questions from the customer, listens for new information rather than making assumptions, works with the customer to identify solutions to problems, acknowledges customer’s feelings without taking them personally, uses nodding or other affirming communication behaviors, as appropriate and builds rapport by adjusting communication style to more closely match the customer’s (such as rate of speech, use of gestures, posture, etc.), as appropriate.

Managing customer knowledge

At the heart of marketing and marketing strategies is a fundamental understanding of customers. Almost every manager would agree that better customer knowledge can bring economic benefits to a company, which becomes valuable resources for them. It's profitable to know how many customers the company has, who they are, and the current and future value that their customers symbolize to the organization. Accurate customer data is the highlight of any business. Managers need to be able to rely on their customer knowledge which will in turn enable them to understand customer behavior and their preferences, and then use it for both operational and business planning purposes.

As most of the organizations store customer data across the organization in departmental silos, so the data may become inconsistent and unreliable which are useless for the companies. So as to enables companies to use their customer information with confidence, and to trust it as a basis for decision-making, ways of managing customer knowledge and keeping the data update are important tasks within the organizations.

Knowledge flows in CRM processes can be classified into three categories. Firstly, Knowledge for customers is generated in the process within the enterprise, such as research and development. It is required in CRM processes to satisfy knowledge needs of customers. In another words, this knowledge is produced from service supplier to customers. For examples, knowledge about products, knowledge about markets and suppliers. Knowledge about customers is about customer segments and individual customer. It can be captured by customer surveys, service management and complaint handling. It is accumulated to understand motivations of customers and to address them in a personalized way. This includes demographic data, customer histories, connections, requirements, expectations and purchasing pattern etc. It is necessary to manage these data continuously; otherwise, they will quickly become useless. Poor data results in wasted resources, lost productivity, and an inability to forecast accurately.

Lastly, Knowledge from customer is knowledge capture from customers basing on the fact that customers gain their own expertise while using the product or service. It is knowledge of customers about products, suppliers and markets. Customer data is often best collected close to the customer since there is greater familiarity with the customer directly. Within interactions with customers, this knowledge can be gathered to feed continuous improvement, e.g. service improvements or new product developments.

No matter what customer knowledge the organizations collected, it’s significant to manage and organize them well. Customer Knowledge consists of material that is both unstructured, open end and structured information, such as data from surveys. What we are looking for is to build structured data out of the unstructured information collected. To add structure, we need to be able to classify and determine what information we want in a structured format. In addition, most of the customer knowledge is incomplete. Sometimes even the customers don't know what they want. And every customer is different. However, it doesn't mean that the data we collected has no value.

The thing we need to do is to build up a customer knowledge database which has to allow for flexibility together with a wide variety of access and dissemination. The database needs to be able to capture data, classify it into a structured framework, but be able to do this on-demand, flexibly and easily. The database has to be capable of holding data in a wide range of formats and styles, while allowing that information to be searched and accessed quickly, and allowing the database integrity to be maintained.

Furthermore, different users will have different levels of access to different information depending on their seniority or the customers that they are dealing with. The design of a customer knowledge database is therefore different to most other database designs and the database itself almost needs to be able to grow organically without intervention. In transaction environments this creates a large performance overhead. However, in a knowledge environment processing is less important than access, which means a more flexible design is preferable. It is also important that the database needs to have the flexibility to add and access this additional information even if it is just for a relatively small number of customers which means there has to be flexibility to allow for a degree of organic growth. After building such customer knowledge database, the knowledge gap between actual customer expectations and management’s perception of customer expectations can be reduce.

Types of customer knowledge

Customer knowledge refers to understanding your customers, their needs, wants and aims is essential if a business is to align its processes, products and services to build real customer relationships. In reality, most of the customer knowledge which the companies have is in a fragmented form and difficult to share or analyze and often it is incomplete. But in this case, we found that the customer knowledge within this public transport corporation is well-defined and organized. There are three types of customer knowledge which includes data-derived knowledge, human customer knowledge and tacit-unstructured/difficult-to-express knowledge. The following is the examples of customer knowledge of this public transport corporation:

Sharing of Customer Knowledge

Without an increased aware nesses and use of organizational customer knowledge throughout the entire organization, the organization is expected to loss of competitive advantage and ability to provide the products and services meeting the customer needs.

How can the organization successfully to do so? In the following parts, we would select one Asian Public Transport Corporation as an example.

Passenger Liaison Groups (PLG) meeting of the Corporation

Although the Corporation was performing strongly, they realized that they had to look ahead to the future. While this decision provided strategic direction, it also presented some unforeseen difficulties. One challenge was to motivate people to change when there was no imminent commercial threat.

To overcome this, the Corporation initiated a culture change. The objective was to integrate customer satisfaction and continuous improvement with the work of every employee, everyday.

The Passenger Liaison Group (PLG) is a communication channel pioneered by the Corporation in 1991. It is a first for Hong Kong, the Customer first Training which won the HKMA 1994 Training Award for Excellence, and the successful implementation of ISO 9000. It allows the Corporation’s passengers and the management to have an opportunity to directly exchange views on the Corporation in the format of a focus group discussion. There are a total of four meetings in the year, and all passengers are welcome to enroll as members of the PLG. Passengers can make an application to be a PLG member via the web page. A random selection will then be carried out by the Chinese University of Hong Kong. Selected passengers will be invited to attend the meetings. Members’ views and the Corporation’s responses will be published in a passenger newsletter regularly.

In order to cater for the needs of different passengers, the Corporation has introduced a number of other initiatives to better understand the requirements and expectations of their customers and measure their progress towards them. These include the Mystery Passenger Survey, Customer Forums, Customer Services Centres and Customer Hotlines and Suggestions Schemes. They have also made Performance Pledges to their customers, which enable them to measure how well they are meeting customer needs.

Challenges for Customer Knowledge Management

Many of the discussions on knowledge transfer deal with the challenges of sharing knowledge at the individual, group or organizational level. These problems really exist on sharing of customer knowledge. In the beginning, organizations may experience a cultural challenge of perceiving customers as a source of knowledge but not revenue. It reflected that most organizations are unwilling to accept externally generated ideas.

Besides cultural factors, an organization may not have the competency required to absorb and make use of the external knowledge. Cohen and Levinthal (1990) state that an organization’s absorptive capacity is a function of its prior knowledge, allows it to recognize and synthesize new knowledge.

On the other hand, organizations may concern about how do they know the customer is supplying correct information or that it is representative of the entire market? Customer Knowledge Management depends on the assumption that an environment exists where useful knowledge can be provided to the company.

It indicates that the potential value to be realized by a customer knowledge management initiative is equal to the ability of the external environment to provide such knowledge, and customer knowledge management may be more effective in some industries over others.

Future development of Customer Knowledge Management

As we can see, the concept of customer knowledge is relatively new in the field of knowledge management; it still continues to develop since more organizations embrace the idea of put it into practice.

Organizations can make use of sharing knowledge over external boundaries, and apply these skills towards improving internal knowledge transfer between different departments and users. It can strengthen a firm’s knowledge management abilities.

The definition of customer can be elaborated further to include those may not have a transactional relationship with the firm, yet contain relevant knowledge of an organization’s business environment. Paquette (2004) states that every organization should be considered a valuable source of external knowledge a firm requires to not only understand the environment, but also flourish in it. Expanding the range of sources providing customer knowledge will transform this knowledge set into external knowledge management, including all users’ knowledge available to the firm.

In fact, the development of customer knowledge is very expensive, but how to disseminate the knowledge within the organization? It needs to develop an organization culture to create, sharing and use the customer knowledge for actions.

Conclusion

Promoting knowledge sharing within an organization is not an easy task. The challenges of CKM implementation increases when the knowledge sharing involves customers possessing knowledge that is not owned by the organization.

However, the benefits of facilitating customer knowledge flows can have a real impact on the performance of the organization. By actively involving customers in creating a two-way flow of knowledge, an organization (no matter it is a public organization or a private company) can have a new source of knowledge which can improve its standing in the marketplace.

Finding the correct combination of valuable customer knowledge sources and customer knowledge management forms can create an endurable competitive advantage through the introduction of products and services that satisfy customer needs. An organization’s understanding of the importance of customer knowledge will encourage the expansion of its current knowledge management practices to beyond the organizational boundary. This creates an improved ability to identify, select, organize, disseminate, and use valuable knowledge that an organization requires to be successful.

As a conclusion, we believe that the future development of Customer Knowledge Management is positive and promising.

Acknowledgements

We would like to thank our interviewee, Dr. Leung for supporting this case study. We are particularly grateful to our course instructor, Dr. Chu for help and support. We are also indebted to our classmates for comments on earlier drafts.

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Electronic Sources*

CIO Magazine (2006) Managing Customer Knowledge http://www.cio.com/archive/060198/think.html

CIO Special Advertising Supplement (2002) Knowledge Management: Big Challenges, Big Rewards http://www.cio.com/sponsors/091599_km_1.html

THE MANCHESTER REVIEW • DOUBLE ISSUE 2001 • VOLUME 6 • NUMBERS 2 AND 3 Knowledge Management, CKO, and CKM: The Keys to Competitive Advantage By John M. Leitch and Philip W. Rosen http://www.providersedge.com/docs/km_articles/KM_CKO_CKM-Keys_to_Competitive_Advantage.pdf

The Provider's Edge, LLC (2003) The Knowledge Management Advantage http://www.providersedge.com/kma/cop.htm

Wikipedia, (2007). SERVQUAL. Retrieved March 25, 2007, from Wikipedia, the free encyclopedia Web site: http://en.wikipedia.org/wiki/SERVQUAL