I know how powerful internet and Web 2.0 technologies are, so I don’t need any convincing. If this study had not confirmed my prejudices I would have retained the prejudices (Why? Because it’s obvious that sophisticated knowledge management capabilities have the capacity to greatly improve our performance at pretty much any activity involving the management of knowledge and it would be quite possible that some firms have spent unwisely on such things without vitiating the basic fact that they are capable of substantially improving our performance.) In any event, this study suggests that IT enabled knowledge management substantially improves firm performance – though I’ve not read it closely to work out whether it claims to establish causation – firms that are just the kind that would improve their performance anyway, might be those firms that go out and get themselves some knowledge management IT.
The Performance Effects of IT-Enabled Knowledge Management Practices by Peter Cappelli NBER #16248
The extensive literature on knowledge management spans several fields, but there are remarkably few studies that address the basic question as to whether knowledge management practices improve organizational performance. I examine that question using a national probability sample of establishments, clear measures of IT-driven knowledge management practices, and an experimental design that offers a unique approach for addressing concerns about endogeneity and omitted variables. The results indicate that the use of company intranets, data warehousing practices, performance support systems, and employee competency databases have significant and meaningful effects on a range of relevant business outcomes.
Oh, and while I’m about it, this post is quite good on the way in which KM is an agency ‘public good’ for which it is difficult to directly measure its contribution to ROI.