Knowledge management constitutes a number of processes that are responsible for the creation, dissemination, application, and utilization of knowledge. In the application and utilization of knowledge, it serves a very important role in the process of decision-making. There exists a need to manage information for the proper performance of any organization or institution. Information management emerged due to the dire need of information to be managed and applied in different sectors of operations. A decision support system, on the other hand, is a technological aspect that aids in the decision making process in an organization or institution. This is a computer program that aides in analyzing business data and present them to users for the purpose of decision making. The concept of knowledge management is used together with a decision support system for effective functioning of any organization (Power, 2002). This paper seeks to analyze the relationship between knowledge management and decision support systems.
Knowledge management is a critical concept and an important aspect in any organization as it allows for the creation, dissemination and the application of knowledge in various levels of operations. Technology is employed in most of the processes owing to the fact that there is notable technological advancement. It is therefore prudent to use decision support systems to aid in knowledge management. To understand how these two concepts are inter-related, we start by analyzing each of them at a time.
Full utilization of data and information in conjunction with people’s skills, intuitions, competencies and ideas is what constitutes knowledge. In any business or organization knowledge is relevant for its sustenance more than other factors of production. Its application is critical in solving any situation that arises in an organization. Knowledge management adds value and intelligence as it protects the intellectual asset form becoming extinct and enhances the decision making process. In any given organization, knowledge management helps in facilitating other organizational initiatives, like the business process re-engineering and provides a focus that enables an organization to maintain an advantage in competition. For the purpose of ensuring the attainment of existence objectives, knowledge has to be managed effectively.
Knowledge management can be evaluated from various points of view. On the business perspective, the management should focus on the extent to which investment of knowledge is applied. The various business processes should be guided by the concept of knowledge. Acquisition, mergers, products and services should all be considered from a perspective that has application of knowledge as a critical and core value. Management in any organization serves purposes that are critical for the well-being and performance of the organization. Their functions, that include directing, organizing, and controlling, should indulge the concept of knowledge management for the purpose of achieving the set objectives and the desired business strategies and policies. This is the management perspective point of view. The operational perspective of knowledge focuses on the application of expertise in the execution of any knowledge-related task. The main focus of knowledge management is organizational objectives (Frada & Holsapple, 2008). These objectives range from the achievement of the organizational goals, improvement of performance, and attainment of a competitive advantage in the industry and within the market.
A variety of organizational practices support the creation, storage, and transfer of knowledge, thus aiding in management practices. Multinational corporations that use advanced technologies face various problems in terms of closing the knowledge gap that exists within their work force. This problem also surfaces when it comes to managing business and staying put to the technological development in the complex markets both locally and internationally. Knowledge sharing offers a solution to this problem, as it facilitates transfer of information, thus expanding knowledge by getting in touch with others. Effective sharing of knowledge lays more emphasis on the context of information rather than the content. The challenges faced by many multicorporations in the world are associated with the advancement in technology. The knowledge to manage this technology is acquired through such means as sharing of knowledge. It is critical to note that the knowledge that is left unshared and that is not applied in solving problems is valueless to an organization. With the improvement in technology, people can share knowledge in different ways. Knowledge management system enhances the effectiveness of sharing of information in collaboration with other services, such as expert systems (Becerra & Rajiv, 2010).
Knowledge management is affected and influenced by certain drivers. The first key knowledge management driver is the technology drivers. The way employees store, disseminate, and exchange data is affected to a high extent by the advancement in technology. Processes such as data communication and networking occur at a very high speed due to the proliferation of technology. It is critical to note that, although information can move from one place to another at a high speed, it is people who have the responsibility of turning that knowledge into creative decisions. Technology avails knowledge that is useful and assists in the development of human capacity (Ravidranath, 2003).
Process driver is the other key driver of technology, as it improves the processes of work. The transfer of knowledge from one locality or unit to another improves the process of work. The way organizations react to market changes plays a major role in determining the investment and inventory decisions. Timely dissemination of information allows the management to plan in advance on the operations of an organization. Knowledge management allows organization to use certain knowledge that enables it to be responsive to the market changes at any given time. The emphasis on knowledge management is critical to the operations of any given organization.
Decision Support System
This is an information system that is computer based and that supports businesses and organizations in making decisions. Its application in an organization is relevant to the management as it helps in the planning and operations of an organization. Decision support systems are designed to facilitate the processes of decision making and support the process rather than automating the process. In this sense, therefore, decision support system should respond to the dynamic changes of the organization. A decision support system should be in a position to provide timely and current information with high levels of accuracy and relevance for easier facilitation of information system (Ravidranath, 2003).
One of the key functions of management in any organization is decision making. Quite often, managers are faced with challenges and problems when it comes to decision making. These challenges may be caused by various aspects in the decision to be made. Errors made when making decisions can have far-reaching effects in the operations of a business. The need to make a quick and timely decision also poses a challenge to the managers, especially when they have other pressing duties to attend to. Delayed decision making has negative impact on the operations of a business and may hinder a business from faring well in a competitive market. The presence of a lot of data in today’s management makes it difficult to easily extract information from given database. These challenges necessitate the use of a decision support system. It provides the necessary information to a manager in a desired format, thus making the work of extracting information from any given data easier.
A decision support system can be viewed from various perspectives. This system can be viewed as an interactive system that makes available data to the user for decision making processes. It’s referred to as an interactive system due to its capability to respond to the user’s request. The data in a decision support system can be displayed in either graphical or tabular form. This allows the user of such data to make conclusions from such data with ease. The user of this information is in a position to anticipate the future performance with great level of certainty by looking at the trends as presented by a decision support system. For the decision support system to be credible, it should offer reliable and timely information, alongside handling unexpected problems as they may arise.
The decision support system possesses certain features that make it possible to execute its roles. The features of this system revolve around its major use of aiding decision making. The system should be very simple to understand, such that making deductions from the data provided by the system is not problematic. However, there exists no standard opinion as to how the decision support system should function, but it should be efficient and effective to execute its duties properly.
There exists an expanded decision system framework. This constitutes the decision support system that performs varied roles. A data-driven decision support system is one of the categories in the broader framework. It deals with the analysis and emphasis of structured data. An example of this system is a management reporting system. This model of the support system provides a high level of functionality and aids in decision making by making analysis of available data. The other category is a model driven decision support system. This model constitutes systems that use financial and accounting models, among others. The last but not least of these models is a knowledge-driven decision support system. This is an improved model as it suggests the actions that managers should take to execute a certain role. This system does this role by analyzing the data fed on it and making conclusions from them (Ravidranath, 2003).
Some of the information that a decision support system can offer includes giving comparative figures that enable a manager to evaluate the performance of a firm against that of the industry. The system can also present projected values that enable the management to plan well in advance from the anticipated performance of the firm. A decision support system may also present information that indicates the consequences that any decision alternative carries (Becerra & Rajiv, 2010).
Decision Support System and Knowledge Management
Having discussed knowledge management and decision support system, we focus on the correlation between the two, if any. Many views have been raised as to the relationship between these two aspects with some people arguing that there exists no relationship. However, from our discussion, it is evident that there is a relationship. From one point of view, knowledge helped in the creation of decision support system. On the other hand, the decision support system assists in the application of knowledge in different roles. Computer-based technologies can perform various roles, including supporting decision making and undertaking knowledge work that would otherwise have been done by human resource. Earlier, we defined knowledge management as the creation, storage, and dissemination of information. The decision support system can also perform some of these duties, as well as enhance storage and dissemination of information. The information retrieved from the decision support system can be applied in the management or leadership of an organization with an aim to achieve the organization’s objectives. Application and utilization of knowledge completes the process of knowledge management. As a result, it can be argued that the decision support system can be applied in knowledge management (Eric, 2005).
In the modern knowledge management environment, it is completely impossible to separate technology from the management of knowledge. With the advances noted in the technology sector, the functions of any given management have become simplified. The decision support system performs roles within the confines of knowledge management that would have otherwise been performed by a specialist. Some of the modernized decision support systems even offer suggestions to the user of information regarding the prudent course of action. The modern world is industrialized and the technological advancement has tremendously enhanced knowledge management, that will in turn contribute to further technological advances. Decision support system is becoming important in aiding the efforts of knowledge management that aim to increase the competitiveness of the organization. Most top management departments in different organizations agree to the fact that the use of computer-based technology serves a major role in the knowledge management activities.
Computer-based technology researchers are also known to be knowledge management researchers. The development of technology by individuals is not for its own sake, but rather helps in dealing with knowledge in its various levels of gradation. We do not create knowledge for the purpose of just creating, but we do so in order to apply the same in our daily operations and enhance our knowledge and capabilities (Eric, 2005).
Knowledge management in its application should enhance and facilitate the process of problem solving. In the process of engaging their mind and knowledge to solve problems, managers get involved in decision making as they are required to choose from various alternatives available. The concept of decision making is enhanced by the decision support system. There are various levels of management: strategic management and operational have different requirements when it comes to decision making. The requirements are influenced by the scope of operations.
Data indicate that effective knowledge management constitutes 80% organizational and management roles, while 20% makes up for the technological aspect. Through composing a smaller percentage, it is evident that technology that includes the decision support system contributes to knowledge management. Organizations acquire knowledge in various ways. Regardless of the way knowledge is acquired, it has to be stored so that any time that it is required for use it may be retrieved. The storage of knowledge generally involves expert systems and databases, among other software. In order for any given organization to achieve good returns on their investments, knowledge should ultimately become part and parcel of the problem solving process. The storage of information in this case is facilitated by use of technology in databases, which play a major role of decision support system; and the creation of such information is one of the processes of knowledge management. Thus, there is an inter-relation between these two concepts (Frada & Holsapple, 2008).
One of the core concepts of knowledge management is the sharing of information among different users. The sharing and transfer of information from one party to another enhances knowledge creation and the application of the knowledge created in solving problems or executing duties within an organization. The transfer and sharing of such information are enhanced by the use of technology.
The current environment is turbulent and complex, characterized by growing competition. In the pursuit of fulfilling business goals, businesses should strive to introduce strategies that will augment their capability in terms of containing competition. Knowledge management is the sure solution to this problem. The emergence of technology, and especially the decision support system, aides in the knowledge management process. These technologies offer direct contribution to the application of knowledge in the management process of any business. The presence of a system that can easily analyze data and assist management in making prediction of the future performance of the business is a sure way through which success in an organization is achieved.
Logical and step-by-step analysis of information available is what is required in decision making processes of a company. The analysis serves to complement other steps, such as identifying problem in the process of decision making. This function of decision making is currently performed by managers in different organizations, who are aided by the use of technology. Decision support systems and knowledge management are critical aspects in the running of any organization. Knowledge that is not shared and applied has no value to the operations and performance of an organization. Consequently, the availability of a decision support system that provides relevant information, but is not applied in the running of an organization, serves no purpose within the organization and the company will be better off without that system. Knowledge management and decision support systems are deemed functional if growth and development in an organization have been achieved. These two concepts are at times used independently, but it is worth noting that, with the changing trends in the business environment, where businesses are required to serve a larger market, use of technology becomes inevitable. The age of industrial revolution is digitalizing almost all the processes in the management and running of organizations, including use of technology in decision making.