The effects of knowledge management

The implementation of knowledge management (KM) allows many companies to obtain a competitive advantage over their competitors. Companies, to gain competitiveness and improve business processes, have included KM as a business strategy. These indicate that reports of successful KM implementations have generated financial savings, higher revenues and a higher level of acceptance by users. For example, the implementation of the Eureka database (KM database) in 1996 saved Xerox an estimated $ 100 million.

The success factors of the KM project are linked to the knowledge and objectives of an organization, as well as to its focus on employees who require specific knowledge. In addition, the success factors of the KM project are related to the integral communication and the commitment of the companies and organizations with KM.

Firms are assumed to have always been oriented toward accumulating and applying knowledge to create economic value and competitive advantage. We therefore suggest the need for a Knowledge Management Performance Index (KMPI) which we have defined as a logistic function having five components that can be used to determine The knowledge circulation process (KCP):

1. Knowledge creation, 
2. Knowledge accumulation, 
3. Knowledge sharing, 
4. Knowledge utilization, and 
5. Knowledge internalization. 

When KCP efficiency increases, KMPI will also expand, enabling firms to become knowledge-intensive.