Key performance indicators (KPIs) traditionally fall into the following four categories:
Financial – includes KM implementation costs (cost of new applications, application licenses, digitization, repository maintenance, administration, employee training) and cost savings/avoidance (from productivity gains, redeployment of resources, new uses for or fewer employees, and reduced errors)
Knowledge retention (capture) – includes organizational risk mitigation (impact of operational risks in the absence of KM initiatives), frequency of knowledge asset updates, number of knowledge assets, hardcopy:electronic document ratio, and number of repeat views of FAQs, SOPs, lessons learned (reduction infers retained/memorized knowledge)
Knowledge creation – expansion of organizational knowledge as measured by number of staff trained in KM processes/tools, number of knowledge sharing sessions (such as Communities of Practice, blog/wiki activity), knowledge base uploads, and number of innovation cafés
Knowledge dissemination – includes measuring blog/wiki activity, number of newsletters or bulletins, number of queries submitted through an expert locator system or a My Profile-like application, number of/activity on intranet sites, repository search traffic, and best practices transfer sessions
Bottom-line, mission-critical impact of KM initiatives can be quantified based on (1) reduction in cycle time for critical work activities, (2) reduction in down time, (3) accelerated problem resolution, (4) fewer reworks, (5) faster turnaround time, (6) faster time to market, (7) increased sales, and/or (8) increase customer satisfaction. The return on investment from increased user productivity can be quantified using effective hourly rates to calculate the relative cost savings or cost avoidance of work hours saved, percent of queries solved independently or more quickly; extrapolated over time, this provides a reasonable measure of (realized or unrealized) savings to the organization.
Qualitative outcomes of KM initiatives include increased employee morale, increased motivation for continued use of KM tools, increased motivation for continued improvement in productivity.