Quantified Knowledge Management success story number 128; €136 million in one year at Continental

Here is another in our series of success stories quantified benefits, this time from Continental. 

The Tyre manufacturer Continental has a number of Knowledge Management initiatives under way, including

  • The collaboration platform ConNext, which links wikis, blogs, and community forums.
  • More than 16,000 communities, some of which are more like small working groups, while others have several thousand members.
  • Lesson learning
  • The innovation platform Contivation, for collaborative development of new ideas.
Innovation is one of Continental’s three value creation streams, and gets a lot of attention. As their knowledge management page reports regarding the use of Contivation,

Some 420,000 suggestions were received in 2017, for example, of which more than 360,000 were implemented. This not only resulted in savings of more than €136 million, but is also a testament to the active engagement of our employees with the company and its values.

One of the things to note here is the rate of implementation – nearly 86%. This is at the high end of implementation rates for schemes such as this.

View Original Source (nickmilton.com) Here.

Quantified KM value example number 127

In this job advertisement, found on LinkedIn, we find an example of quantified value delivery from KM.

Image from wikimedia commons

The job advertisement, posted a week ago, is for a “KM Manager” for Shell, based in the Hague, who will run KM for Shell’s Projects and Technology business. It contains the following paragraph.

Over the past 6 years, we have built a comprehensive set of structures, processes and applications supported by Working Out Loud behaviors, and implemented this Solution across Shell’s Technical Functions and C&P. This program has touched approximately 43,000 Shell staff in Technical Functions. A total value of over US$480 million has been delivered through application of key practices in Shell’s business activities. Our ambition is to achieve US$ 1 bln by the end of 2020.

Thats a lot of value in 6 years, and an ambitious target!

View Original Source (nickmilton.com) Here.

Quantified KM value stories 125 and 126

This post contains two more entries in a long series of examples of quantified value delivery from KM.

The two examples below come from the article “Knowledge management in a steel company : a case study of the Gerdau Group” written in 2009 by Marcelo Kuhn, and both refer to value resulting from exchanges of knowledge in communities of practice. 

“Some good results have been reported and improvements in processes have been obtained based on knowledge sharing. In the Reheating Community, for instance, members from the AZA plant in Chile were unsure about a current procedure and posted a question: “Is it economically favorable to turn off the furnace when there are shutdowns in the production line for short periods of time (less than 8 hours)?” Members
from four different plants in Brazil, Chile and U.S. debated the subject for thirteen days and concluded that the best option was to keep the furnace in operation at a temperature around 13300F. Calculation proved that the fuel consumption to reheat the furnace was larger than the fuel saved. Moreover, previous experiences in some plants showed that constant changes in the internal temperature of the furnace damaged the refractory bricks which are the raw material of the internal walls, reducing wall life by 25% which represent losses of  US$ 25,000 by furnace. In December 2008, Gerdau had fifty Rolling Mills that were operating with shutdowns periods and could take advantage of the suggested strategy”

“Another example comes from the Rolling Community. Workers from the Riograndense plant in Brazil were having problems with the operation of the Laying Head (a machine which forms the wire coils in the Rolling Mill process). They asked for help in the community forum and received answers from members of three other plants. The Agominas plant, also in Brazil, showed how they operated the machine with fewer problems. Workers from Riograndense visited Agominas’ plant in order to find out what was being done differently. After observing a day of operation and maintenance procedures, the workers noticed a difference in the shape of one internal component. This change was implemented in Riograndense’s laying head, leading to a better performance of the equipment. Product quality was improved and the shutdowns in the production line were reduced, generating a gain of US$ 70,000 / year.”

View Original Source (nickmilton.com) Here.

Quantified KM value story 124

Another example of quantified value delivered from KM – number 124 in a continuing series

image from wikimedia commons
This story comes from the same article from HBR I referenced yesterday, entitled “What managers need to know about social tools“.  It shows some of the value in seeking and sharing knowledge in a networked world. Here’s the story.

“At the insurance company we studied, one employee, Sheila, was asked by her manager to put a hold on her current project and perform an urgent analysis for a new vertical market. She told her manager that the analysis would most likely take two weeks, pushing her current project past the deadline and over budget. The manager was willing to pay that price.

“As Sheila began to dig into the problem, she remembered a series of exchanges on the internal social tool among colleagues in another department about a project they were working on in that same vertical market. With this metaknowledge, she sent them a note asking if they could suggest where to start. They replied that they had completed a market analysis and asked if she would like to see it. Sheila said that when she received the report, “I couldn’t believe it. It was exactly what my boss asked me to do. This just saved me two weeks, and it saved my project over a million dollars. I had no idea they were working on this. Neither did my boss.”

View Original Source (nickmilton.com) Here.

Quantified KM Value stories numbers 121 to 123 – ROI of knowledge retention

From this published article comes three examples of quantified value from KM.

Image from wikimedia commons

The article is entitled “Assessing the Business Value of Knowledge Retention Projects: Results of Four Case Studies”, and much of it comes from the work of Larry Todd Wilson, who operates a Knowledge Harvesting service.

Larry always tries to determine the ROI of the work he does, and he and his co-authors share the following 3 case stories:

The business result of harvesting (a senior forestry manager) expert’s knowledge was a single source for understanding how to manage delinquent accounts and how to respond to bad debt events, e.g., bankruptcy, collections, etc. The final deliverable was an interactive tool that was developed to capture and disseminate the key decisions relating to the management and response to delinquent/bad debt events. The estimated cost of developing the project was approximately $33,000, with a recognized benefit of $150,000. The immediate benefits to the company included not only improved productivity gains due to bad debt management practices being deployed, but also the ability to move forward without replacing the senior manager. The total estimated benefit over a three-year timeframe is approximately $450,000, with a net present value of approximately $334,000. Therefore, the return on investment of this project was approximately 10:1.

The deliverable captured the expertise from the technical (call-centre) expert and developed an interactive tool around the key decisions relating to the call center, eGain. The estimated cost of developing the project was approximately $12,000 with a recognized benefit of $41,000. The total estimated benefit over a three-year timeframe is approximately $124,000, with a net present value of approximately $89,000. Therefore, the return on investment of this project was reported as approximately 6:1. The efficiency gains from this project would include transferring 60% of the work from a high-cost employee to a lower-cost employee. 

The deliverable captured the expertise from the Senior Systems Analyst and developed an interactive tool around the key decisions relating to troubleshooting the (IT portfolio management) tool. The estimated cost of developing the project was approximately $13,000 with a recognized benefit of $69,000. The total estimated benefit over a three-year timeframe is approximately $207,000, with a net present value of approximately $156,000. Therefore, the return on investment of this project was reported at a greater than expected ratio of 10:1. Since the expert quickly adapted to the harvesting process, it took less time for the harvester to capture his valuable information; hence, reducing the time and cost required for the harvesting process.

View Original Source (nickmilton.com) Here.

Quanitified KM value story #120 – Petroleum Development Oman

Our list of KM Value stories reaches number 120, with this story from Petroleum Development Oman (PDO). See the complete list.

Image from wikimedia commons
The story was presented last week at the UK KM Summit by Hank Malik, who gave an excellent presentation on how standard project-based Knowledge Management has been developed and deployed at PDO.  The elements of KM Hank described included 
  • Lesson Learning, 
  • Best practices, 
  • Knowledge Assets, 
  • Content Management, 
  • Knowledge Retention and 
  • Communities of Practice; 
in fact all the core elements of project-based KM, plus a complete Governance layer and a Processes toolbox.
Hank described a whole set of acheivements from the KM program, including the following quantified benefits delivered to date:
  • 5,554 Lessons Learned captured to date across over 50 projects,
  • Over $740 M savings,  and $80M realised for in-country value.

Well done to Hank and the KM team at PDO!

View Original Source (nickmilton.com) Here.

Quantified KM value story number 119 – finding knowledge at Accenture

One of the ways in which KM adds value is through helping poeple do work faster and better.  Here is a story of howAccenture estimated that value.

Accenture make documented knowledge available to their staff through a portal known as KX. IN order to estimate the value delivered through KM they decided to focus on one component of Knowledge Management –the use of KX – and to focus on one single benefit – the savings in time delivered through the use of knowledge gained through the KX portal.

They estimated these savings through a survey, which asked the following question

“Please estimate the amount of your time that you saved during the last two weeks as a result of this knowledge.

“During the last 2 weeks, this information saved me AT LEAST:”
“During the last 2 weeks, this information saved me AT MOST:”

The results from this survey were used to calculate average time savings, and thus average cost savings.  They found that for annual KX costs to the sample population of $170,000 they were delivering savings of $2,400,000.

This equates to a 2500 percent Return on Investment

View Original Source (nickmilton.com) Here.

Quantified value story number 118 – saving patient cost in healthcare

Here is a reference to a great story about the value of simple KM in healthcare

The story is taken from a California State University blog on KM, and references an earlier Times Magazine story, available to subscribers. The Time magazine is ostensibly about doctors’ pay, but also describes how sharing and institutionalizing good practices (although they don’t call them that) can significantly reduce costs, improve outcomes for patients…and keep doctors happy.

The blog quotes the following example of a very simple KM practice, which shows how much difference even a best-practice checklist can make (and also how unpopular this was, until it began to deliver benefit).

The first thing he (the head of surgery at Geisinger) and his team did was take 20 general steps all surgeons follow throughout a bypass episode and try to sharpen them in a way that would remove as much chance and variability as possible, going so far as to spell out the specific drugs and dosages doctors would use. The result was an expanded 40-step list that some surgeons balked at initially, deriding what they called “cookbook medicine.” 

Once doctors began following the expanded checklist, however, they grew to like it. After the first 200 operations — a total of 8,000 steps — there had been just four steps not followed precisely, for a 99.95% compliance rate. A total of 320 bypasses have now been performed under the new rules. 

“There are fewer complications. Patients are going home sooner. There’s less post-op bleeding and less intubation in the operating room,” says Casale. What’s more, the reduced complication rate has cut the per-patient cost by about $2,000.

View Original Source (nickmilton.com) Here.

Quantified value stories in KM – numbers 115, 116 and 117

As part of our series of stories and examples of quantified value from KM, please find below three examples from a 2015 article in the UAE National, entitled “Knowledge management is power for companies”

An example of KM in action is the case of El Paso Corporation – a 5,000-employee North American provider of natural gas and related products. To maximise the benefits of a new organisational structure and encourage communication, El Paso decided to try a KM programme focused on business opportunities and challenges. Its aim was to foster expertise within the workforce and share technical knowledge with a scorecard used to measure and report on the programme. Its elements included: savings, improvements, successes, costs and milestones. In the first year, the goal was to save the organisation US$500,000, but it delivered $1.2 million in savings.

“A recent best-practice transfer between KOC and other k-Companies in Kuwait, where technology and know-how have been transferred between companies resulted in savings of several million Kuwaiti dinars,” (Abdul Jaleel Tharayil, project leader of Knowledge Management Practice for Kuwait Oil Company) says.

“Another example is an internal collaboration between deep drilling and development drilling, which brought forth a reduction in non-production time by introducing a change in casing design, leading to savings of around 250,000 dinars.”

The Kuwaiti Dinar is currently worth about  3.3 US Dollars.

View Original Source (nickmilton.com) Here.

Quantified value stories 112, 113 and 114; three examples from customer service

From a blog post called “In praise of Knowledge Management” come the following examples of quantified KM value, all from customer service centers;

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  • “A leading European mobile phone retailer saw a stark increase in contact deflection of 27.3 percent while markedly improving NPS  (Net Promoter Score) by 12 base points after implementing a knowledge management system”.
  • “One of the largest global insurance providers realised a massive decrease in agent training costs by 50 percent, and a sharp drop of 30 percent in complaints”.
  • “An Australian Government agency saw its customer satisfaction levels surge to 93 percent as well as raise agent satisfaction and reduce handling time by 53 percent”.

The article concludes that “it is these kinds of success rates and improvement which make knowledge management a serious contender for inclusion in any list of top ten contact centre technologies”.

View Original Source Here.