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Measuring the Impact of Knowledge Management
Jong-Ae Kim, PhD
IFLA Journal, Sage Publications, 2006, 32, 362-367
Reviewed by Bambang Fahruddin Syahrir
Stud. No. 2057802
This paper is an overview of the approaches to evaluate the impacts of knowledge
management implementations to organizational performance. It is considered to be very
critical mainly because of the increasing implementation of knowledge management as a
new management technique within organizations in which it is believed to be capable of
contributing to business benefits. The writer addresses her views that demonstrating the
direct correlation between KM and organizational performance is quite complicated to be
evaluated since KM may not be the only factor affecting the organization performance.
However, several academics and practitioners such as Grooijer (2000); Del-Rey-
Chamorro, et al. (2003); Darroch (2003), Teruya (2004), and Bose (2004) are reported to
have made examinations on their interrelationships.
Referring to several studies above, Kim recommends four methods to support practitioners
to identify and develop the evaluation frameworks such as return on investment (ROI),
balanced scorecard (BSC) approach, qualitative case studies (QCS) and success case
method (SCM). In conjunction to these, by applying ROI can help justifying the resources
invested in KM initiatives and assesses financial performance of the initiatives.
Nevertheless, ROI is not the only one used in financial measure but several other
alternatives can be reliable such as the payback period, the net present value (NPV), and
the return of knowledge (ROK) as addressed by Chen & Chen (2005, p. 382).
Furthermore, two academics, Haugh and McDermott as cited in Kim (2006) put forward
