9 Managing Project Knowledge

Improving performance through learning is a common theme to formalized project management (PM) and knowledge management (KM), although KM focuses on knowledge in all areas beyond managing projects. Specifically, knowledge acquisition, development, transfer, and utilization are common functions to both.

PM’s focus is on improving project performance through improving the processes associated with the organization’s projects as a whole. On the other hand, KM’s focus is on improving the efficiency and effectiveness of all recognized formalized disciplines throughout the enterprise. PM can be regarded as an integral part of KM as projects deal with new things that, to be developed, require an understanding of the organization’s past and current projects (Cioffi 2002).

In the current business environment, competition is increased because of globalization and free market philosophy. This environment has posed far greater challenges than ever for organizations to meet customer needs. It compels organizations to develop products and services faster, cheaper, and better to retain a competitive advantage in the marketplace.

This competitive advantage can be attained and maintained by exerting significant influence on how organizations practice both PM and KM. Thus, it is important to be aware of all the common aspects of both these disciplines, and how KM practices can enhance PM in fulfilling its time, cost, performance, and customer satisfaction goals.

THE INTERRELATIONSHIP BETWEEN PM AND KM

A project has a definite beginning, definite ending, and several interdependent tasks. Unfamiliarity and uniqueness are often described as characteristics of a project. Formalized project management is concerned with completing a project on time, within budget, and according to the project specifications while satisfying both the customer and project team expectations. Project management is essentially the application of specific procedures, tools, and skills in achieving the client’s goals, as reflected in the project objectives.

Knowledge is a resource that increases its value with use. Although the terms “knowledge” and “information” are commonly used interchangeably, they have separate and distinct meanings in the area of knowledge management.

Information is that entity that gives quantitative, or even qualitative, form to our experiences, in the form of language, numbers, pictures, and diagrams. Information allows us to communicate our basic observations and perceptions. On the other hand, knowledge is far more than information, because it includes the meaning and interpretation of the information. Knowledge also includes intangibles such as the tacit knowledge of experienced people—something that is not well articulated but often determines collective organizational competence (Nevis, DiBella, & Gould 1995). Thus, knowledge can be defined as insights derived from information and experience.

Ironically, knowledge will remain dormant, and not very useful, until it is reflected in future actions. KM is the systematic, explicit, and deliberate building, renewal, and application of knowledge to maximize an enterprise’s knowledge-related effectiveness and to improve returns from its knowledge assets (Wiig 1993).

The primary focus of KM is to utilize information technology and tools, business processes, best practices, and culture to create and share all categories of knowledge within the organization and to connect those people who possess knowledge to those people who are in need of that knowledge. A well guided and properly practiced KM effort will lead to enhanced organizational performance in all specialty areas. Given the overlap between PM and KM disciplines, a discussion on their similarities is a prerequisite to managing project knowledge.

Goals

PM is concerned with project scope, schedule, cost, and performance of meeting stakeholder expectations. KM, on the other hand, is a deliberate effort to develop knowledge in all specialty areas and share it throughout the enterprise. KM efforts ultimately will lead to better organizational performance in all operational and specialty areas.

Functions

The PM discipline involves planning and controlling the functions and processes that involve projects. PM is concerned with working together in teams, sharing information, sharing knowledge, learning from each other, and collaborating on efforts to improve project performance. Working in teams, learning from each other, and collaborating also are integral parts of KM.

Communication

Effective communication is critical to success for both PM and KM disciplines. Specifically, communication assumes greater importance for large and complex projects, as the number of communication channels is associated with the number of people, disciplines, and agencies involved in a project. With respect to KM, acquiring and developing, storing, sharing, retaining, and utilizing knowledge are core functions of KM, and they all rely on effective communication. While project communications are generally real-time, KM communications occasionally can happen some time after the knowledge has been discovered.

Structure

It is not uncommon to find that organizations that are involved in multiple projects change their organizational structures from functional organizations to pure project or matrix organizations. In some cases, organizations establish PMOs to facilitate this transition through a formal structure.

While PM has significant influence on organization structure, KM’s influence is more subtle. It focuses on acquiring, creating, developing, sharing, and utilizing knowledge. Thus, KM encourages organizations to become flat, reducing hierarchy. Additionally, KM can guide organizations toward creating informal structures for communities of practice, social networks, and virtual teams.

Technology

PM uses technology tools (e.g., statistical modeling tools for estimating, project portfolio selection models, risk analysis schemas, PM software) to plan, monitor, analyze, and control project performance. If a full-scale PMO has been established, then organizational project management will use an intranet, the Internet, videoconferencing, knowledge repositories, expert database systems, artificial intelligence tools, and electronic yellow pages to capture tacit and explicit knowledge of individuals in the organization and to integrate with organizational explicit knowledge. Again, the distinction is that KM’s application and scope of these tools go well beyond managing projects.

Knowledge

Both KM and PM engage in acquiring, creating, transferring, retaining, sharing, and utilizing knowledge. The PMO plays an important role in accomplishing these knowledge-related activities. It is becoming increasingly evident that organizations need the PMO to improve the overall and consistent performance of projects. While a formal-structure PMO manages PM knowledge, KM uses other organizational entities and other systems and processes for these purposes.

Process

Given that both PM and KM efforts require investment, the organization anticipates tangible results from their efforts. While the size of a project determines the resources and investment needed for a project, investment in a PMO within an organization depends on the goals of project performance excellence set by the organization. Likewise, the specific objectives of the KM system will determine its investment needs.

KM and PM disciplines have their own sets of processes that will require changes to their existing policies and procedures on implementation. To implement PM and KM successfully, organizations need to make changes in policies, practices, and accounting and other procedures, as well as train people at all levels. While PM demands project-based finance- and cost-control mechanisms, KM will facilitate innovative cost-measuring concepts, such as those recognizing the intangible assets represented by intellectual capital.

Change

By definition, projects are new entities, and all new things are associated with change. Successful implementation of projects will lead to changes, such as new organizational processes and products. These changes might in turn trigger changes in marketing and business strategies, in building new facilities, in work functions, and in business-related technologies. Likewise, learning associated with KM will lead to changes in management functions, processes, work functions, and human behavior.

Learning

Conceptually, both PM and KM are associated with learning that results in behavioral change—both individual and organizational. Learning, which is integral to KM, is a key concept in leveraging knowledge. Well-defined learning processes are prerequisites for organizational learning and for accumulating knowledge in organizations. People within an organization play a critical role in creating and sharing knowledge.

Individual learning, a prerequisite to organizational learning, is characterized by thinking, personal experience, needs and motives, interests and values, level of difficulty of the task at hand, and manifestation of behavioral changes (see Figure 9-1). On the other hand, collective thinking and creation of a shared frame of reference characterize organizational learning. Organizational learning is defined as a process by which the organization’s knowledge and value base is changed, thus leading to improved problem-solving, which in turn leads to increased capacity for action (Probst & Buchel 1997).

The major distinction between individual learning and organizational learning is that the former normally uses tacit knowledge, while the latter always uses explicit knowledge. Employees may develop optimum processes while performing tasks within the rules of the organization. On the other hand, organizations gain knowledge by documenting these processes and by using these documents as references. Through replicating these processes, organizations acquire additional knowledge, which becomes independent of individuals who developed the original processes.

Figure 9-1
Individual vs. Organizational Learning

While individual learning is similar in PM and KM, they adopt different approaches to organizational learning (see Figure 9-2). The PMO formalizes organizational learning for PM through several means and processes with a focus on improving project performance, whereas KM focuses on improving organizational performance by employing technology tools and social networks within an organization.

Practice

Neither the PM nor the KM discipline can be considered new, as evidenced by the fact that they have been recognized by professional societies, industrial organizations, and the academic community. PM has become an integral part of the business environment, slowly evolving over centuries. Similarly, the social, economic, and technological progress of society is a testimony to KM practices through an age-old tradition of training, education, and social activities.

Figure 9-2
Organizational Learning—PM and KM

PMO AND CoP

The PMO’s mission is to improve the capabilities of PM in the organization by offering tools, techniques, systems, standards, and relevant knowledge that assist in the effective and efficient execution of projects. The PMO is most appropriate for organizations with multiple projects, locations, contractors, and resources. Poor project performance, and particularly runaway projects, are sometimes the forces behind establishing a PMO.

One of the major functions of the PMO at both the project and enterprise levels is in KM. The PMO is not only about keeping records of what happened in the past, but also about managing future projects better.

At the organizational level, one of the most important functions of the PMO is to instill PM culture in organizations by:

• Developing project management skills and knowledge

• Developing knowledge repositories of project performance and lessons learned

• Improving the maturity of project management.

The establishment of communities of practice (CoP) serves the same function to the KM discipline as the PMO does to PM. Unfortunately, the concept of CoP has not yet been fully developed and formalized. Currently, CoPs are voluntary, formed through individual common interest, expertise, and passion. Given that formal work groups and teams have legitimacy within the organization, these informal groups will cease to exist once these goals are achieved.

In addition to sharing both tacit and explicit knowledge, CoPs offer several other benefits. According to Wenger and Snyder (1999), communities of practice:

• Contribute to strategic direction

• Create new business opportunities

• Solve problems quickly

• Transfer best practices

• Develop professional skills

• Help companies retain talent.

It is highly beneficial for organizations to integrate the CoPs with the PMO to arrive at the most useful outcomes of KM, such as enhanced communication, improved collaboration, and advanced employee skills (Anantatmula 2004).

IMPROVING PM THROUGH KM

PM theory and concepts are organized into different bodies of knowledge, and as such as they are considered independent functions. By comparison, KM is more dynamic and interactive in nature due to continuous transformation of tacit to explicit knowledge. Snider and Nissen (2003) contend that the fluid view of knowledge is at odds with the static view implied by the body of knowledge of professional fields such as PM. However, a dynamic model of continuous learning and improvement is attainable by continuously integrating KM techniques and tools with PM functions.

It is reasonable to expect that the effective integration of KM and PM will result in enhanced collaboration, improved communication, productivity, employee skills, and better decision making. These improvements will be not only for the PM functions, but also for the entire organization, thereby achieving continuous learning and improvement in project performance.

The following KM systems and tools, used throughout the project life cycle, can improve project performance:

• Project selection using knowledge-based decision systems

• RBS development of a project environment, kept current by using up-to-date resource cost information from historical project data and resource database systems

• Project plan and scope development using historical data of projects from knowledge repositories related to project plans and scope definitions

• Accurate and realistic project cost estimation using historical cost and effort estimation and earned value data of past projects

• Project WBS development using standardized WBS packages maintained in database systems

• Realistic and optimum schedule development using historical schedule data and “after action review” information from knowledge repositories

• Resource management based on actual resource usage of similar projects and tasks from database systems

• Risk reduction using available project information and knowledge.

Figure 9-3 presents a dynamic integration model of KM and PM. Simultaneously applying and integrating KM and PM tools will provide updated information and knowledge for managing projects better. These goals will be achieved by reinforcing promising practices and reviewing actions during the project and after its completion.

Figure 9-3
PM—KM Integration

In turn, the project performance data from various segments of the project will feed back into knowledge data repositories and database systems, with the resulting continuous loop providing an opportunity for fluid knowledge flow between PM and KM systems. For example, the project execution phase will provide actual data about resource utilization, individual and collective resource effort required for different tasks, associated costs, and the performance of each resource. In turn, these data will be of immense value in refining RBS and skill levels.

The model suggests dynamic interaction between KM and PM tools, not only at the start and the end of the project but also throughout the project’s implementation. It suggests continuous transformation of tacit knowledge into explicit knowledge and vice versa. Some of the KM tools, such as an intranet, video conferencing, and electronic yellow pages of experts, will support the project execution phase by enhancing collaboration and improving communication among the project team members.

Extensive team interaction almost always results in improved employee skills and productivity. These tools also improve team participation and decision making. An intranet can be used to document achievements and lessons learned on a daily basis. Video conferencing tools can be used to tap expertise and knowledge of people who are within the organization but in a different location. Likewise, electronic yellow pages can be used to seek expert advice for all phases of project planning and execution.

A classic example of integrating PM and KM is developing PM software that shifts its traditional focus on quantitative aspects of PM to both qualitative and quantitative aspects. For example, the day-to-day learning and decision making of project team members can be an integral part of PM software.

Ultimately, dynamic project planning based on learning while executing projects is an important result of improving PM performance through KM. One of the most important elements of PM is project integration, which promotes unity of effort in projects by integrating all project-related knowledge. It can be achieved by the dynamic integration model of PM and KM.

Integrating KM and PM tools will have an impact on PM at various levels (see Figure 9-4). All the KM outcomes will have a positive impact at the individual, team, project, PMO, and organizational levels. Together, improved collaboration, communication, employee skills, productivity, and decision making will increase project-related knowledge, which will in turn will benefit overall project performance. Integrating KM and PM is necessary to manage project knowledge effectively and to help organizations improve their project performance.

Figure 9-4
mpact of KM Criteria on Various Areas of PM