Article in Journal of Knowledge Management

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Why KM projects fail: A multi-case analysis
Article in Journal of Knowledge Management · June 2005
DOI: 10.1108/13673270510602737 · Source: DBLP
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Alton Yeow-Kuan Chua
Nanyang Technological University
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Wing Lam
University of South Australia
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Chua, A., & Lam, W. (2005). Why KM project fails: a multi-case analysis. Journal of
Knowledge Management, 9(3), 6 – 17.
1
Why KM Projects Fail: A Multi-Case Analysis
Alton Chua, Wing Lam
Abstract
This paper attempts to understand the reasons for KM project failure. Five well-documented
cases of KM project failure in the current literature are reviewed. For each case, the authors
examine the circumstantial elements of the failure, including the rationale and intended
objectives of the KM project, the outcomes of the project and the reasons that led to project
failure. From the review, two observations are made. One, KM failure factors fall into four
distinct categories, namely, technology, culture, content and project management. Two, KM
projects can be traced along a three-stage lifecycle, comprising initiation, implementation and
integration. The findings are discussed and finally synthesised into a model of KM project
failure. The model serves as a starting point for future research in KM project
implementation. Practitioners may use the model as a risk identification tool for KM project
implementation. This paper highlights the fact that KM project failure is a reality that both
practitioners and researchers have to reckon with. Additionally, it leverages on the
experiences of five KM failure cases and develops a model that allows KM failure factors to
be pre-empted.
Keywords
KM project failures, case studies, KM project lifecycle
Introduction
The recent decade has seen a proliferation of KM projects in many organisations.
Correspondingly, corporate spending on KM projects has increased substantially over the
years (Ithia, 2003). This phenomenon is fuelled by the escalating popularity of the
knowledge-based view of the firm in which knowledge is recognised as the key sustainable
competitive resource (Kogut and Zander, 1992). As a result, organisations are implementing
various KM initiatives to identify, share and exploit their knowledge assets. Several widely
circulated KM implementation cases include the Buckman Laboratories’ Knowledge Network
(Zack, 1999), Xerox’s Eureka database (Brown and Duguid, 2000), Tech Clubs in
DaimlerChrysler, the communities of practice among quantitative biologists in Eli Lilly
(Wenger, et al, 2002), the various KM initiatives in BP Amoco (Hansen, 2001) and the highly
elaborated knowledge distillation processes at the Center for Army Lessons Learned
(Thomas, et. al 2001).
Invariably, KM has been presented as a compelling strategy for organisations to improve their
business processes and gain competitiveness. Furthermore, the outcome of implementing
KM has been reported to be remarkably successful either in terms of financial savings,
revenues generated or the level of user acceptance. For example, Xerox was estimated to
have saved $100 million from its Eureka database (Brown and Duguid, 2000). Through the
communities of practice, Hill’s Pet Nutrition enjoyed significant reductions in pet food wastage
due to packaging improvements while Hewlett-Packard succeeded in standardising sales
processes and establishing a consistent pricing scheme (Wenger and Snyder, 2000).The
knowledge base at the Center for Army Lessons Learned was very well received as
evidenced by the high weekly hits of nearly 100,000 (Holder and Fitzgerald, 1997).
Compared to the success stories, reported cases of KM project failures pale in number. This
is despite the estimate that 84% of KM programs exerted no significant impact on the
adopting organisations (Lucier and Torsiliera, 1997). Furthermore, unlike the success stories
where the names of the organisations are prominently featured, cases of KM project failure
rarely reveal the actual identities of the organisations involved. This suggests that failure
remains an organisational taboo even though corporate values such as organisational
learning and active experimentation are increasingly espoused in the modern economy.
Most people find it difficult to come to terms with failure (Peters, 1987). However, the fear
and intolerance of failure go against the tenets of organisational learning and continuous
Chua, A., & Lam, W. (2005). Why KM project fails: a multi-case analysis. Journal of
Knowledge Management, 9(3), 6 – 17.
2
improvements. If failure is ignored, denied or repressed, the opportunity to learn from past
mistakes is lost. On the other hand, when failure is embraced as an integral part of learning
and development, deeper insights into success can be gained (Thorne, 2000).
Paper objectives
This paper attempts to understand reasons for KM project failure using a multi-case analysis.
Five well-documented cases of KM project failure are reviewed. For each case, the authors
examine the circumstantial elements of the failure, including the rationale and intended
objectives of the KM project, the outcomes of the KM project and the reasons that led to
project failure. The findings are discussed and eventually synthesised into a proposed model
for KM project failure.
What is KM Project Failure?
It is widely known that most KM projects take the form of developing discussion databases,
technical libraries, lessons learned database, starting communities of practice and identifying
internal best practices. However, what is less commonly discussed is what constitutes
success or failure in a KM project.
From an IT project perspective, a failed project can be considered one that has missed the
deadline by more than 30 percent, exceeded the budget by more than 30 percent or has an
end-product that does not meet the user’s requirements (Norton, 2003). However, some
argue that KM initiatives are more organic in nature vis-à-vis IT projects and may not even fit
into the traditional notion of a project. Even so, most KM projects characteristically involve
the use of resources, have specific deliverables and are measurable. Davenport, et al, (1998)
identified several indicators of KM project success:
• Growth in the resources attached to the project, including people and budget;
• Growth in the volume of knowledge content and usage (that is, the number of
documents or accesses for repositories or participants for discussion-oriented
projects);
• The likelihood that the project would survive without the support of a particular
individual or two, that is, the project is an organizational initiative, not an individual
effort.
• Evidence of financial return either for the knowledge management activity itself or for
the larger organization
Owing to the multiplicity of perspectives from different stakeholders, it does not appear
necessary to develop a single, all-encompassing definition of KM project failure. Hence, for
the purpose of this paper, KM failure is simply defined as KM projects which have few, or
none of the above characteristics identified by Davenport, et al (1998).
Research Method
To find documented cases of KM failure, searches were conducted on three popular online
databases, namely ProQuest, Ebsco Host and Emerald, using the search terms ‘knowledge
management’ and ‘failure’. Five cases were eventually selected for analysis.
The selected cases met two important criteria. One, they had been published in peerreviewed scholarly journals. This ensured that the case-studies were of a high quality and
that the findings presented were culled from a defensible methodology. Two, they provided
sufficient contextual details about the KM projects from their inception to eventual termination.
Each case was manually reviewed with the intention to tease out three salient details. The
first was the organisational context and the rationale for which the KM projects were
conceived. The second was the final outcome for each KM project. The third and final detail
was an explanation for the failure.
Chua, A., & Lam, W. (2005). Why KM project fails: a multi-case analysis. Journal of
Knowledge Management, 9(3), 6 – 17.
3
Cases in KM Failure
Case 1: A global bank
A global bank which spanned across 70 countries decided to implement various KM projects
after the departure of a major client who felt it could not receive integrated services across
divisions and countries from the bank (Newell, 2001; Scarbrough, 2003). The main objective
of the KM project was to leverage on intranet technology to develop a global knowledge
network so that the services in the bank could be integrated. Among several independent
intranet projects proliferated were OfficeWeb, GTSnet and Iweb.
OfficeWeb brought together the relevant branch managers in the Domestic Division to create
a community of users where local knowledge could be freely shared. The project was
strategically important as it could support the shift towards a more decentralised,
entrepreneurial, organisational structure in the branches. GTSnet was intended to
consolidate the disparate sources of information across the bank and allow users in the
Transaction Services Division to obtain information from an integrated source. The project
was given abundant financial resources and was staffed mainly by external IT consultants.
Iweb was designed specifically for the IT function. Besides being a central repository for
storing information, Iweb was intended to be used as a platform for staff to gain and share
expertise particularly in intranet technology. The project was well allocated with technical
staff and hardware resources. Furthermore, a senior IT manager was involved in establishing
standards for the creation and maintenance of contents on the intranet.
Officeweb was abandoned even before it was rolled-out. GTSnet held obsolete content soon
after it was implemented. Iweb was more successful than the other two projects, but it failed
to promote any sharing of knowledge within the IT division.
The main reasons for the KM projects’ failure at the bank were as follows:
• During test trials of Officeweb, the bandwidth of the existing infrastructure was found
to be inadequate to support the network traffic generated.
• GTSnet did not involve the targeted end users during the project development stage.
It also failed to convince the users of the importance of the project to the success of
the Division. Furthermore, GTSnet was staffed by external IT consultants who did
not possess the relevant business knowledge. Hence, when it was launched, it was
unable to garner support internally to bring together the technical and business
expertise
• While Iweb infrastructure was fully operational, it was unable to change the users’
basic attitudes towards knowledge-sharing behaviour. When it was launched, there
was no impetus for individuals to share their knowledge or access the knowledge of
others.
Case 2: A pharmaceutical company
An American-owned global pharmaceutical company which specialised in high margin
“lifestyle” drugs aimed to accelerate its internal drug development processes through overt
knowledge management initiatives. The management committed a substantial amount of
political and financial resources to implement three forms of KM projects, namely, ‘Lessons
Learned’, ‘Warehouse’ and ‘Electronic Café’ (McKinlay, 2002).
‘Lessons’ was a highly structured debriefing exercise conducted by each workgroup at the
end of a major drug development process. It was intended as a method to archive corporate
lessons and to prevent the loss of operational knowledge in the drug development process.
‘Warehouse’ was an organisation-wide groupware populated with content based on the
‘Lessons Learned’ debriefings. Its objective was to capture not only problems and solutions
but the details of administrative and decision-making processes. It had features such as
Chua, A., & Lam, W. (2005). Why KM project fails: a multi-case analysis. Journal of
Knowledge Management, 9(3), 6 – 17.
4
common repositories and discussion forums which supported coordination and collaboration
across workgroups. ‘Café’ was a set of linked websites based on the anecdotes of individuals
involved to the drug development programmes. It was intended as a platform for selfreflection and sharing of personal experiences among a small group who had been identified
as organisational innovators. Within ‘Café’, individuals were liberated to digress from reality
and to discuss hypothetical issues or explore radical alternatives.
‘Lessons’ yielded uneven results within three years of its implementation. ‘Warehouse’ could
not be adapted to the specific context of each workgroup, while ‘Café’ was perceived to be
exclusive, impractical and remote from reality. None of these KM projects had an effective
mechanism to encourage participation or measure outcomes.
The main reasons for the failure of KM at the pharmaceutical company were as follows:
• In ‘Lessons’, there was no mechanism to sift through the lessons compiled. Neither
were there any opportunities to extend the scope of the exercise beyond existing
procedures. In addition, the output from ‘Lessons’ was a list of dissatisfaction with
how standard operating procedures were applied rather than critical reflections on the
procedures themselves. Thus, instead of fostering organisational innovation,
‘Lessons’ became a ritualised reinforcement of routines.
• ‘Warehouse’ could not be adapted to the specific context of each workgroup. It was
thus deemed to be irrelevant to day-to-day operational processes.
• Contributing to ‘Warehouse’ was perceived as a loss in personal expertise while
accessing ‘Warehouse’ was perceived as a sign of inadequacy. Hence, ‘Warehouse’
did not attract spontaneous contribution and access.
• The open-ended nature of ‘Café’ had inadvertently made its relevance and practicality
questionable. Furthermore, the exclusive access to ‘Café’ limited its potential for
expansion.
Case 3: A manufacturing company
A European manufacturing company that had more than 60 production units in some 30
countries implemented three distinct KM projects, namely, ‘Production Project’, ‘Supply Chain
Project’ and ‘Design Project’ (Kalling, 2003). The focus of ‘Production’ was on capturing,
documenting and sharing knowledge about production methods such as machine
maintenance methods and safety prevention. The main aim was to cut production costs.
‘Supply’ was intended to improve and distribute knowledge about offered products in
downstream supply chain. The aim was to enhance product functionality and better
understand the effects of product design on the economics of transport and warehousing.
The objective of ‘Design’ was to improve structural product design so that designers could
construct prototypes with minimal raw materials.
Two years after implementation, ‘Production’ was able to capture and transfer knowledge to
the plant that needed it, but its aim to promote the application of the new knowledge resulted
in a mixed level of success. ‘Supply’ was a codification of knowledge culled from customers,
warehouse delivery centres, transporters and end-consumers. However, it was under-utilised.
‘Design’ was a highly sophisticated software system but it was largely neglected by designers
and became obsolete after a while.
The main reasons for the failure of KM at the manufacturing company were as follows:
• In ‘Production’, out of 40 plants studied, ten plants did not apply the new knowledge
largely because they did not perceive a production performance gap in their plants.
They were unconvinced of the value created from applying the new knowledge. It was
later discovered that the rest of the plants which applied the new knowledge actually
saw a significant improvement in their production performance.
• When ‘Supply’ was launched, it was under-utilised because users found that the
software merely provided them with information they already possessed. Moreover,
Chua, A., & Lam, W. (2005). Why KM project fails: a multi-case analysis. Journal of
Knowledge Management, 9(3), 6 – 17.
5
‘Supply’ neither resulted in increased sales volume for sales staff nor helped create
better products for designers.
• ‘Design’ was perceived to be too cumbersome and difficult to be understood. In
addition, it did not reduce the raw material costs or the amounts of prototypes as
intended. Since ‘design’ was largely neglected by designers, it was not updated and
after a while became obsolete.
Case 4: A European-headquartered company
The management of a European-headquartered company was convinced that a knowledgebased learning organisation was the key for the company to achieve cost-effectiveness,
competitiveness and a better management of business risks. For this reason, it commissioned
a KM team which comprised nine management staff to implement a KM initiative (Storey and
Barnett, 2000).
The initiative which enjoyed high visibility encompassed a series of plans such as creating
informative web-pages of the management and all business units, organising staff into
communities of practice and identifying internal knowledge champions. The initiative
progressed on the basis that IT systems would be the foundation for all activities and
processes. As time passed, the team found out that the Website and intranet development
were divided between the IT and media affairs departments. These two departments had
diverging agendas and held conflicting views as to how the IT systems should be developed.
Members in the team suspected that the IT manager’s involvement in the KM initiative was to
gain a dominant position in the company’s strategy, methodology and budget. As a result,
tension started to grow within the KM team. Meanwhile, external market conditions
deteriorated and prompted the company to implement a major organisational restructuring
exercise. The KM initiative faded and became lost in the turbulence.
The main reasons for the failure of KM initiative at the company were as follows:
• The top management was committed only up to a point. In the face of crisis, the KM
initiative, which was perceived as a “nice-to-have” rather than mission-critical activity,
was completely ignored. This underscores the need for the KM initiative to be
grounded in the organisation’s strategy.
• The KM team failed to manage the political processes between the IT and media
affairs departments which in part undermined the initiative.
• The KM team spent little time deliberating on the potential barriers to the initiative and
did not consider the idea of rolling out a pilot even though the scale of the initiative
was significant. The team could have avoided such pitfalls if external advice had
been sought.
Case 5: A global company
A global company, which was one of the top ten organisations in its industry, lost a number of
deals because of its inability to offer integrated solutions in the order handling line of business
(Braganza and Mollenkramer, 2002). In response, the management commissioned a KM
project known as Alpha with the objective to create a ‘blueprint for gaining and maintaining
global order handling services market leadership’. Underpinning Alpha was a comprehensive
attempt to manage the knowledge across the company.
Within Alpha several functions and teams such as business architecture, IT and knowledge
content and design were formed. One of Alpha’s priorities was to build a network of
‘Knowledge Enabled Worktables’ to provide staff customised access to Alpha’s knowledge
base. Due to the teething problem of using new technology and the poor translation of design
requirements to system functionalities, the IT team could not complete the first Worktable for
the Sales function on schedule. Meanwhile, the knowledge content and design team had
already developed a large amount of content. Fearing that the delay could dampen interest
in KM, the team engaged a vendor to develop an intranet system as a quick alternative to
making its content available. This move was perceived by the IT team as an invasion into its
Chua, A., & Lam, W. (2005). Why KM project fails: a multi-case analysis. Journal of
Knowledge Management, 9(3), 6 – 17.
6
territory. Furthermore, the intranet was treated with scepticism from the rest of the functions
in Alpha. By the end of the year, the viability of the Worktable was in doubt. Given the high
dependence and unsustainable expenditure on external IT resources, Alpha was perceived to
be losing control over its IT-related projects. Thus, the management curtailed the Worktable
project and disbanded Alpha completely when it eventually lost faith in knowledge
management.
The main reasons for the failure of Alpha were as follows:
• Knowledge was managed within silo-oriented communities. Thus, business-critical
knowledge that straddled across multiple functional groups was neglected.
• There was an over-reliance on IT systems to manage knowledge in Alpha. Tacit
knowledge and behavioural issues, on the other hand, received insufficient attention.
• Three different external consulting firms were engaged at different stages of Alpha’s
development. Inputs from these consultants confounded instead of facilitated the KM
initiative.
• As time passed, the cost to sustain the KM initiative ballooned beyond control. The
management decided to cut its losses and terminated the initiative altogether.
Analysis of the Cases
Inductive analysis, which involves unitising and categorising, was used on the above five
cases to uncover a list of KM project failure factors. Through the process of unitising, ‘raw’
failure factors were identified and isolated from each case. Subsequently, through the
process of categorising, the ‘raw’ failure factors derived from unitising were organised into
categories on the basis of similarity in meaning. The list of failure factors underwent iterative
revisions and refinements until it met three criteria, namely, exhaustion of sources, saturation
of categories and emergence of regularities (Lincoln and Guba, 1985). Two important
observations were made during this process.
Observation 1: Four categories of KM failure factors
There appears to be four distinct categories of KM failure factors: (1) technology, (2) culture,
(3) content and (4) project management.
The technology category refers to aspects of KM infrastructure, tools and technology. The
failure factors identified in this category are as follows:
• Connectivity (T1). The technical infrastructure could not support the required number of
concurrent access due to bandwidth limitation. (OfficeWeb in Case 1)
• Usability (T2). The KM tool had a poor level of usability. KM users found the tool too
cumbersome or complicated for use. (Design in Case 3)
• Over-reliance (T3). An over-reliance of KM tools led to the neglect of the tacit aspects of
knowledge. (Case 5)
• Maintenance cost (T4). The cost of maintaining the KM tool was prohibitively high. The
management intervened and terminated the KM project. (Case 5)
The culture category includes softer aspects related to human and organisational behaviour.
The failure factors in this category are as follows:
• Politics (Cu1). The KM project was used as an object for political manoeuvring such as
gaining control and authority within the organisation. (Case 4)
• Knowledge sharing (Cu2). Staff did not share knowledge within the organisation due to
reasons such as the lack of trust and knowledge-hoarding mentality. (IWeb in Case 1;
Warehouse in Case 2)
Chua, A., & Lam, W. (2005). Why KM project fails: a multi-case analysis. Journal of
Knowledge Management, 9(3), 6 – 17.

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