Knowledge-Management Future Looks Bright

Compiled ByDave Schafer The knowledge-management (KM) services industry will receive a major boost as companies shifting focus away from technology issues toward issues involving people and processes, according to IDC, a provider of business advice and analysis. The company predicts worldwide KM-services spending is expected to increase at a compound annual growth rate of 41%, from $2.3 billion in 2000 to $12.7 billion in 2005. "Knowledge management is the new frontier for most companies," says Greg Dyer, senior research analyst of IDC's Knowledge Management Services program. "Corporate managers understand the benefit of capturing and sharing intellectual capital, but they do not understand the process of putting it into action. As a result, there is a great opportunity for vendors that can develop and apply KM solutions around specific business programs that clients are trying to solve, such as employee retention. By doing so, vendors help KM lose its ambiguity and become a value-adding tool." IDC, Framingham, Mass., says the U.S. is leading efforts in the KM market, but its share of worldwide KM services spending will dip to 48% in 2005 from 62% in 1999. IDC believes vendors who promote themselves as solution providers stand the best chance of surviving in this competitive landscape. "In addressing specific business problems, vendors must be prepared to define their service mixes through consulting, implementation, training, operations, and maintenance," Dyer says. "If a vendor cannot provide these service using internal resources, it will need to partner with firms in the appropriate categories to gain a competitive advantage."