Blending business processes and technology to form customer-centric applications makes customer relationship management (CRM) a dynamic piece of any organization. An ever-changing IT player, CRM can be confusing for many IT managers and executives.

In this article, we’ll clear up the confusion about knowledge management (KM) in general and the specific role of the chief customer officer (CCO), a new executive position being created by many large- to medium-sized organizations.

For a breakdown of CRM and eCRM, check out these TechRepublic articles, “The latest acronyms will keep you up on CRM” and “E-mail management and sales team automation are key to CRM.”

CCO stands for chief customer officer, a new executive position that’s becoming more common among some large companies.

According to Gartner, “Most organizations today have a senior management team made up of a combination of key disciplines such as finance, marketing, product and human resources…what is often missing is a formalization of governance for customer relationships.”

A CCO’s overall responsibility is to direct an organization’s CRM strategies and any other customer-focused initiatives. According to the Federal CIO Council E-Government Committee, a CCO position “requires the involvement of a full-time senior executive and staff to develop, promote, and/or maintain the agency’s focus on customer services.” According to Gartner, CCOs should report directly to their organization’s CEO.

The emergence of CCOs is an indication of the growing importance of customers, according to Quintus CCO Lynn Wright in an interview with Customer Interface. “My primary responsibility…is to ensure that every aspect of our business is focused on meeting the needs of our customers. That means I speak regularly with customers to better understand what we do well for them and what we can improve upon.”

Some other companies to appoint CCOs are DigitalThink, and PepsiCo.

KM is knowledge management. The knowledge inherent to an organization’s business processes, or corporate knowledge, is a tool organizations can use to increase business and deepen customer relationships.

Philip J. Gill of Knowledge Management Magazine and DestinationCRM writes that knowledge is a continuum often depicted as a pyramid. Data forms the base, information rests in the middle, and knowledge forms the pinnacle.

In his article, “On the Trail of Knowledge,” Gill explains the differences between the rubrics.

“To distinguish among the three, think of data as raw numbers and text gathered from many sources. Information is data that has been ordered and put in context, whether in an electronic human resources (HR) system, an accounting spreadsheet, or the pages of a magazine. Knowledge adds even more value, containing the expressly human contributions of synthesis and experience.”

Within an enterprise, corporate knowledge is either concrete or tacit.

  • Concrete knowledge is found in documents or company reports, while tacit knowledge is anything not written down.
  • Tacit knowledge is trial and error learning on the part of your employees.

Tacit knowledge is the most difficult to collect because it is the knowledge of experience, according to Gill. For example, tacit knowledge includes information a customer service representative uses to make his or her job easier. Using both forms of knowledge to reach customers, partners, and other employees is useful to any organization.

The KM system
A KM system collects both types of corporate knowledge into a localized database. This database brings CRM and KM together. With a KM system to organize information, customers and partners can access all of an organization’s knowledge. Also, making a KM system available to employees enables them to provide corporate knowledge from different departments to customers.

“Knowledge management itself is a simple idea, but implementing a knowledge system can be difficult,” said Richard Artes, cofounder of Lean Operations Management, a business process improvement company.

Considering KM system implementation forces an organization to work together. According to Gartner analyst Rita Knox, “You have to have people believe in the value of knowledge management for it to be successful. You have to get your executive management interested in knowledge management.”

Knox offers a list of questions organizations should answer before and during a KM system implementation:

  • What organizational information do you need to capture?
  • How do you capture and document that information?
  • What is the value of KM to your organization?
  • Should information be available to customers and partners?
  • How do you measure its success?

DigitalThink, Primus, Applix, and ServiceWare are just a few vendors that provide KM services.

Suffering from acronym burnout?

Have trouble keeping up with the latest CRM acronyms? Tell us which acronyms you would like to know more about, and we will provide clear and concise definitions for them in an upcoming article.