Integrating Knowledge Management and Relationship Management in an Enterprise Environment

Abstract

INTRODUCTION Value creation strategies in the 21st century have shifted from product differentiation and operational efficiency to knowledge creation and relationship building across the value network. Knowledge management (KM) and relationship management (RM) are two sides of the same coin in gaining competitive advantages in the knowledge-based economy. The focus of relationship management has been on customer relationship management (CRM), which has helped companies to acquire and retain customers and increase market share and profitability. For businesses that have a high percentage of sales through indirect channels, such as the hightech industry (Tanoury & O'Leary, 2000), partner relationship management (PRM) has become an important business strategy in the sell-side relationship management. As procurement cost and suppliers' commitment to meet production requirements can drastically impact a firm's performance (Aberdeen, 2001; Lang, Paravicini, Pigneur, & Revaz, 2002; Carey, 2005), the upstream supplier relationship management (SRM) is equally important as the downstream CRM and PRM. Enterprise relationship management (ERM) is a business strategy that optimizes the relationships between a firm and its customers, channel partners, suppliers and alliance partners in order to maximize opportunities. Knowledge management is a value creation strategy that exploits the knowledge assets of an enterprise to achieve business goals. It is concerned with the creation, sharing and utilization of knowledge in an organization. The internal focus of knowledge management to improve product innovation and operational efficiency has shifted to an external focus of enhancing business processes across the extended enterprise. In particular, the application of KM to CRM business processes and the management of customer knowledge have received increasing attention both in academia and in business. The merging of KM and ERM yields two perspectives: the ERM-oriented KM (EKM) and the KM-oriented ERM (KERM). The focus of prior research in this area has been on the integration of KM and CRM. While different models have been proposed for customer knowledge management (CKM) and knowledge-enabled CRM (KCRM), there are no standardized definitions of these terms. A commonly accepted concept is that CKM deals with the processes of managing customer knowledge, whereas KCRM deals with the utilization of knowledge to improve CRM processes. Gibbert, Leibold and Probst (2002) described CKM as the management of knowledge from customers and emphasized CKM as the strategic process by which customers are empowered as knowledge partners. It proposed five styles of CKM that can be used by companies depending on the nature of their customers. Paquette (2006) described CKM as the processes that a firm employs to manage the identification, acquisition and internal utilization of customer knowledge. Su, Chen and She (2006) proposed a conceptual framework for an E-CKM model by incorporating IT into the CKM model. Eppler, Siefried and Popnack (1999) classified business processes by knowledge intensity and process complexity. High CRM process complexity implies a high degree of knowledge to pursue the process goals. KCRM is the enablement of CRM processes by knowledge across the operations of marketing, sales and service. Gebert, Geib, Rolbe, and Piernpp (2002) and Gebert, Geil, Kobe, and Brenner (2003) described a CKM model based on a research approach in business engineering developed at the University of St. Gallen. The term CKM used by the St. Gallen authors refers to both the CKM and the KCRM aspects in the context of this paper. The St. Gallen approach derives from the reflections about CRM (Derliyski & Frohlich, 2004; Zanjani, Rouzbehani, & Dabbagh, 2008), in which customer knowledge is applied to support CRM processes (Gebert et al., 2002; Bueren, Schierholtz, Kolbe, & Brenner, 2004). The St. Gallen concept of the CKM model describes the basic elements for successful knowledge management in customer-oriented processes (Gebert et al. …