atlas by clearpeople

What is knowledge management and its purpose?

16 March 2023

For large and small businesses alike, having access to all company data in a centralized place makes day-to-day business operations easier and enhances company-wide collaboration. This is known as knowledge management (KM), and KM is becoming increasingly useful as companies take their workforce digital.

But if knowledge management seems confusing - don't fret. We’re going to explore the various elements of knowledge management, its key purposes, and go into detail on how knowledge management works. We’re going to cover KM’s benefits, its key components, challenges and best practices and take a look at what makes a KM system effective for a digital workplace.

In this blog:

What is knowledge management?

Knowledge management (often referred to as KM) is an umbrella term that refers to the process of collecting, organizing and sharing relevant information within an organization. From employee training to customer service information, the purpose of an efficient knowledge management system is to increase productivity and simplify operations on a day-to-day basis.

At a basic level, KM involves gathering relevant data from internal and external sources, although the most efficient KM systems are built with content and relevant data aggregated from company employees.

An important point is that knowledge management is an ongoing effort to make all company-relevant documents and data readily available when needed, not a once-off initiative. Think of a KM system as your organization's own Wikipedia; it should come equipped with a search function, logically organized content and a user-friendly interface that makes it simple to use. Its usefulness depends on it being updated regularly, so implementing a company-wide KM strategy and ensuring this is understood and actioned within departments and teams is essential.  

What is the purpose of knowledge management?

The main purpose of knowledge management is to improve productivity across an organization, while also reducing costs and enhancing efficiency. This is achieved by leveraging the company’s existing knowledge and expertise so that employees spend less time researching or combing through files and are instead able to quickly find relevant information.

By gathering and organizing up-to-date information and documents, companies enable their people to make faster, data-informed decisions that can improve performance. In addition to the productivity boost, KM also supports innovation and collaboration by encouraging knowledge sharing across the organization.

Benefits of knowledge management  

So, what are the benefits of having a functional knowledge management system in place for your organization? Here are just some of the upsides:  

Reduced onboarding costs  

With a fully functional KM system, it's much easier (and cheaper) to onboard new employees. The time spent looking for information and consuming other employees’ time is significantly reduced when people can easily find what they’re looking for on their own.

Increased employee collaboration

The most successful teams are those that can collaborate efficiently, and knowledge management encourages and enables this. By having a repository of relevant information and documents, it's easy for employees to connect with each other, find out what the other teams are doing, or consult an expert on a certain topic without lengthy delays.

Employees can also enhance the information or data stored in a KM system by offering edits, amendments, or updates, resulting in improved knowledge sharing and up-to-date files.

Improved employee performance

The use of knowledge management can also contribute to a healthier, more cohesive work environment by providing employees with the tools they need to do their jobs better. By leveraging existing knowledge and organization-wide expertise, KM promotes a culture of collaboration and learning, without the costs associated with expert consulting, training, or upskilling. 

Additionally, an up-to-date knowledge management system ensures that everyone has access to the same information – eliminating cross-departmental confusion while also reducing the need for additional resources.

How to create an efficient knowledge management system

So, what's the best way to create a knowledge management system that supports organizational objectives? The creation and maintenance of an efficient KM system requires a clear strategy, detailed planning, regular maintenance, and user-friendly tools. Here are some key tips for setting up an effective KM system:  

Create a strategy  

Before launching a knowledge management system, it's important to first identify the goals and objectives of your organization, and plan how an effective KM can help you achieve these aims. By planning ahead, you'll cut back on time wasted and build something relevant to your organization's needs.  

Invest in user-friendly technology

Picking the right knowledge management system is going to be key to ensuring its success. If the system is difficult to use, buggy, or offers a negative user experience, your people aren't going to benefit from its use, and will instead be forced to resort to more lengthy, traditional methods of research.

Investing in user-friendly technology that your employees can easily learn will encourage its use and adoption and reduce the need for expensive training.

Encourage collaboration

Knowledge management works best when all employees participate, so it's important to solicit help and expertise at every level of your organization. It's also important not to be elitist when aggregating data and content; both senior and lower-level employees will have something interesting and relevant to contribute, so make sure that all departments get involved.  

To incentivize participation, you can offer rewards, bonuses, or other forms of recognition to those who contribute.  

Keep your KM up to date

Company information and data is going to change on a regular basis, so it's important to regularly update and maintain your KM. You can do this by creating a knowledge management team to regularly go through your KM system and check for misinformation, outdated information or any documents that are no longer relevant.  

Knowledge management challenges and constraints  

No matter how robust a KM system may be, any organization is going to encounter challenges as they aim to keep their knowledge management up-to-date and efficient. A lack of employee collaboration, inadequate resources, as well as financial constraints can all pose a problem:  

Inadequate collaboration  

Without the help of all teams and departments across your organization, a knowledge management system isn't going to be worth the investment. This is why it's essential to incentivize participation with rewards, recognition, and other employee bonuses.  

While this can represent another financial implication for your organization, rewarding employees with modest bonuses is going to be more affordable than paying for expert consulting or other external resources.  


Security is all important. A knowledge management system should come with in-built encryption, as well as the use of permissions to restrict private or sensitive data.  


Regular maintenance is going to be essential for the relevance of your KM. If your organization doesn't have the resources to create a knowledge management team, organize monthly update checks to ensure that all aggregated data is still relevant to company operations.  

The KM bottom line  

Overall, knowledge management is one of the best ways to facilitate collaboration, remote working, and knowledge sharing across your organization. With unlimited potential to streamline operations while also cutting costs, KM is non-negotiable for any organization looking to remain efficient and cohesive in an increasingly digital working landscape.

Knowledge management resources

Download these eBooks for more detailed information about knowledge management:

  • Knowledge Management eBook - A comprehensive guide to knowledge from creation to application > Download eBook
  • A New Era of Knowledge eBook - Moving from knowledge management to knowledge productivity > Download eBook

eBook: Knowledge Management

This eBook aims to help you capitalize on the positives while offsetting the negatives by answering one simple question: “How do you improve knowledge in the new world of work?”

KnowledgeManagement-3DcoverA comprehensive guide on knowledge productivity including:
  • Introduction to knowledge and useful terms
  • Knowledge management challenges and how to overcome them
  • Measuring and sustaining progress
  • What it takes to create high performing knowledge teams

Page length:
13 pages

Author bio



Get our latest posts in your inbox