Knowledge Management Officers: Role in Banks

P K MITRAGENERAL MANAGER

PUNJAB NATIONAL BANK

Knowledge … The driving forceKnowledge … The driving force• Traditional economic models considered

knowledge and technology as external influences.

• Factors of production were seen as subject to law of diminishing returns• The more any input is increased, returns tend to

diminish• However, recent growth models view

knowledge as a lever for raising return on investment

• Knowledge

• Knowledge expressed using a means of communication is “ Explicit” knowledge

• Tacit knowledge cannot be articulated – “ We can know more than we can tell”

Explicit

Tacit

What is Knowledge ?What is Knowledge ?

Knowledge can still be expressed

• Know- what• Facts & figures

• Know –why• Scientific knowledge

• Know- how• Skill to perform

• Know – who• Information on who

knows what

Knowledge is an unique resource

• It is not scarce• Knowledge grows through

application• It is not location –specific

• With internet, geography has become history

• Trade barriers and laws cannot be applied

• Quantification of knowledge and pricing is difficult

Knowledge is important for organisations

Knowledge is seen as a strategic resource to• Provide Competitive edge• Improve productivity & customer relations• Improve efficiency and effectiveness of

decision making• Foster innovation and creativity

Knowledge ManagementKnowledge Management

Knowledge Management involvesKnowledge Management involvesIdentifyingIdentifyingOrganizingOrganizingManagingManaging knowledge resources in the knowledge resources in the

organisationorganisation

KM embodies organisational processes that seek synergistic combination of

• data/information processing capacity of IT &• the creative and innovative capacity of human beings

Organizational Learning & The Learning Organization

Organizational Learning & The Learning Organization

• As competition hardens, organizations need to take the best out of their people

• Employees need to continuously learn & apply knowledge

• Organizations need to constantly learn to improve productivity and profitability

Learning OrganizationsLearning Organizations Learning Learning

organisations areorganisations are

“ “ Where people expand Where people expand their capacity to their capacity to create the result they create the result they truly desire….., where truly desire….., where collective aspiration is collective aspiration is set free and where set free and where people are continually people are continually learning to see the learning to see the whole together ”whole together ”

- - Peter SengePeter Senge

Knowledge Management Knowledge Management OfficerOfficer

Knowledge Management Officer (KMO) Knowledge Management Officer (KMO) links organizational knowledge to links organizational knowledge to intellectual capitalintellectual capital

Intellectual capitalIntellectual capital

Human Capital

Organizational Capital

Customer Capital

Strength of customer relationships,customerloyalty, satisfaction, reputation, brand,distribution network, delivery channels

Capabilities of the organization in the form of technology resources, business process

shared culture, values and norms

Skills & Competencies of employees andtheir ability to meet customer requirementsHuman Capital

Customer Capital

Organizational Capital

Chief Knowledge Officer Chief Knowledge Officer (CKO)(CKO)

CKO acts asCKO acts as CartographerCartographer

– Maps expertise and Maps expertise and makes connectionsmakes connections

GeologistGeologist– Drilling in specific areas Drilling in specific areas

& applying tools& applying tools Spark-plugSpark-plug

– Igniting awareness about Igniting awareness about the need for changethe need for change

ArchitectArchitect– Designing physical and Designing physical and

cultural environmentcultural environment

CKO and HRD

• KM views human resources as crucial for creating value• Employees are our assets

• HR policies should be tailored to meet KM requirements

• HR practices can leverage on KM through• Codification• Personalization

Codification

Knowledge is codified & stored in database to be used by anyone in the organization

Knowledge is codified & stored in database to be used by anyone in the organization

Personalization

Knowledge closely held by any person can be shared through one-to-one interaction

Knowledge closely held by any person can be shared through one-to-one interaction

KM and HRM

• KM and HRM are complementary. However, HRM practices should recognize that• measuring knowledge output is difficult

• Knowledge is difficult to manage and

control

• To realize best results, Chief - HR and CKO should work in unison.

KNOWLEDGE KNOWLEDGE MANAGEMENTMANAGEMENT

OFFICERS IN INDIAN OFFICERS IN INDIAN BANKINGBANKING

INDIAN BANKING IS TRANSFORMING

• In the wake of liberalisation & deregulation, Indian banks have become• Technology - driven• People – oriented• Customer – focussed

• Indian banks will have to transform into “ Learning Organizations ” to foster

• Innovation• Continuous learning• Learning from mistakes

KM in banks

• As part of KM banks are • Issuing circulars on regular basis• Compiling operational manuals / Book of

Instructions• Formulating guidelines• Evolving compendiums on the role &

responsibilities of controlling offices• Banks have also carried out in-house

organizational studies

• Banks have also undertaken M & A which have been sources of learning in respect of• Merging different organisational cultures• Social harmonization• Addressing “Victor-Vanquished” attitude• Team building• Synchronizing technology• HRM policies• Integration of business processes

KM in banks – Knowledge SourcesKM in banks – Knowledge Sources

KM in banks – Knowledge SourcesKM in banks – Knowledge Sources

• Migration from manually-operated system to technology-driven operations has been another source of knowledge in respect of • Training of employees in core banking• Scaling up of technology• Opening up of alternative delivery channels• Overcoming legacy issues• Evolving Business Continuity Plans• Managing operational risks

• Downtime• Natural disasters (floods,earthquakes etc)

KM in banks – Knowledge SourcesKM in banks – Knowledge Sources

• Knowledge sources are also available in the area of • NPA management• Risk Management• Fraud Prevention• Organizational Studies• Diversification• Entering new lines of business

• Banks now need to build on such “Institutional Knowledge”

Role of Knowledge Officers in banksRole of Knowledge Officers in banks

• KMOs should• Codify• Document• Assimilate knowledge

• Real challenge will be in spreading the use of knowledge resources available within the banks

Towards a New ParadigmTowards a New Paradigm

• As the financial industry matures• Existing business model and revenue model will undergo

major change• Future model of business will feature

• Intensive customisation • Technology-driven products• Customer relationships• Innovations

• Banks will have adopt KM as a source of competitive advantage

KM as a separate functionKM as a separate function

• Knowledge available should be captured & codified• This will form the basic building block for KM• It could be evolved into standard operating

procedures, data bases, documents and best practices which can be posted in a Central Electronic Repository

• E-learning could be adopted for knowledge transfer between mentors and trainees and group learning

• Banks need to designate separate CKO

The Ideal CKOThe Ideal CKO The ideal CKO shouldThe ideal CKO should

Manage intellectual capitalManage intellectual capital Act as custodian of KM practicesAct as custodian of KM practices Promote knowledge sharingPromote knowledge sharing Create technical infrastructureCreate technical infrastructure Possess multifarious skillsPossess multifarious skills

Effective communicationEffective communication Persuasive & sociablePersuasive & sociable Build links with disparate teamsBuild links with disparate teams Well versed in technologyWell versed in technology Keen eye for gathering knowledgeKeen eye for gathering knowledge

PNB has created a centralized electronic PNB has created a centralized electronic data repository which housesdata repository which houses– Bank’s manualsBank’s manuals– GuidelinesGuidelines– CircularsCirculars– Product profilesProduct profiles– Learning resources from different training Learning resources from different training

centrescentres– Case studiesCase studies

The repository could be accessed by any The repository could be accessed by any employeeemployee

Strategy is to move towards virtual Strategy is to move towards virtual knowledge centres and designating a CKOknowledge centres and designating a CKO

KM initiative at Punjab National Bank

Towards knowledge sharingTowards knowledge sharing

If “KNOWLEDGE IS If “KNOWLEDGE IS POWER”, the new age POWER”, the new age mantra ismantra is

“ “ KNOWLEDGE KNOWLEDGE SHARINGSHARING IS POWER IS POWER ””

THANK YOU