Case Study: Replacement Cost Based Approach to Risk Management of Knowledge Assets

In response to an identification of IT risks, driven by dependency on key knowledge bearers, we designed an approach to knowledge asset management based on an idea of knowledge quantification using a concept of replacement cost. The implementation case complementing our knowledge transfer initiatives, delivered substantial business value to the company in terms of a sustainable mitigation of the identified IT Risks. We have learned that for knowledge management to be successful, it must cover a broad spectrum of disciplines that are well aligned with the organizational architecture in place and designed for the approach accordingly. Analysis of the results, achieved from the application of the approach, indicate that, on average, knowledge transfer on its own accounts for less than 30% of changes in knowledge asset size and distribution. The major sources of influence to knowledge assets are employee turnover, evolution of the knowledge subject itself, and task assignment policy at the operational level.