The hidden costs of poorly retrievable knowledge

Why knowledge discovery is an underestimated cost factor in companies

One of the biggest problems of today is to provide employees with the right knowledge at the right time. Intelligent internal company search engines can help here. Used correctly, such a search engine can not only reduce pure search time, but also lead to project completions of better quality, reduce costs, improve customer service and greatly simplify employees’ everyday work. This article explains how this can also work in your own company.

More and more companies are noticing that the various data sources in which information resides are leading to inefficiencies. Employees already have to search for information for up to half an hour every day. Some studies, such as those by McKinsey, also assume even significantly higher values. To increase overall business efficiency and provide a better basis for decision-making, many companies are now investing in in-house search engines. Such an investment not only reduces search time, but also has other effects.

Knowledge as capital

Companies have a Unique Selling Point that makes them strong and stand out from the competition. You have accumulated so much know-how in a certain area and perfected the capitalization in such a way that you can survive well. However, this knowledge is perishable – through changing employees, the existing know-how must be passed on in order to maintain an edge over the competition. On the one hand, knowledge is classically stored in the heads of employees, but on the other hand, it is also stored in documents, videos, images or audio files – mostly in unstructured form.

What is underestimated is the sum of information that is already digitized and stored somewhere – guidelines, best practices or general information. The challenge for companies today is to make this knowledge accessible to employees. Employee retention times in companies are getting shorter and shorter, with every promotion new information becomes relevant again and in many companies generational changes are imminent. With the generation change, the know-how must also be handed over or made accessible. In addition to diversified IT landscapes, intelligent internal company search engines can help to cushion such effects in companies.

How do I find knowledge?

Imagine that an employee is supposed to prepare a presentation for a certain project. He knows that for a similar project 3 years ago the project manager at that time prepared a similar presentation. However, he does not know exactly where this was filed. In the meantime, the company has also pulled some of the data from the network drive to SharePoint.

The classic work process then looks like this:

  1. So first he clicks through the various network and SharePoint folders, hoping that through luck and diligence he will find the right information. With a little luck, he can then use the poor search functions of the respective data silos.
  2. If that was unsuccessful, then he asks a colleague and hopes that she can help him. Besides the time now blocked by two people, the colleagues can’t help either….
  3. So now he can call his former project manager, who may have changed in the meantime, and ask for the file or create the presentation from scratch.

If the employee has reached step 3, then the knowledge is mostly lost, although it is actually there. Heinrich von Pierer, himself CEO of Siemens once said “If Siemens knew what Siemens knows” (Original German: “Wenn Siemens wüsste, was Siemens weiß”). It is the same here: If the employees knew what the company knew…

What is the cost of knowledge that is available but not accessible?

For this purpose, one can set up a small calculation example: In a company with 200 employees, employees spend an average of 30 minutes dealing with the consequences of not finding information. This includes active searching, asking colleagues questions, and working through information and documents again. If you take an imputed hourly wage of 80€ and a day/week factor of 5 and a week/month factor of 4.3, then the medium-sized company pays 172,000€ (= 200 EMPL * 0.5h * 80 €/h * 5 * 4.3) every month just for the fact that the knowledge is not accessible to the employees.

Sample calculation - Hidden costs of undetectable knowledge
Sample calculation – Hidden costs of undetectable knowledge – Source: Bastian Maiworm

Costs that are not included here are, for example, the costs that arise when a service technician travels to the customer and cannot solve the problem due to a lack of knowledge. As machines become more and more complex, service technicians must also have better and better access to information. If the technician can’t find the information, then he has to go back the next day – which wastes even more resources and is not good service either.

How does an intelligent, in-house search engine help?

An intelligent corporate search engine is relatively simple in principle. Similar to web search providers, it gives the user a search bar with which the information is searched for certain characteristics. The search engine sifts through the various connected data sources – usually taking access rights into account – and points the user to the most appropriate results. In addition, it is now not only necessary to focus on classic Office documents, but scanned documents, images or videos can also be intelligently searched. In this way, employees can find information that they did not even know existed in the company.

What added value do employees get from a search engine?

Employees start finding information and stop searching. The greatest added value is the reduction in search time itself, which is also reflected financially and in overall efficiency. Knowledge does not have to be compiled again and then stored twice. For many projects, the employee does not have to start from a blank sheet of paper, but can actively draw on existing knowledge. This not only improves the basis for decision-making and service, but also the speed at which projects can be completed. And if you decide on a modern search engine that places a high value on user-friendliness, then the everyday work of employees is made even easier.

Why is search not perceived as a problem in companies?

Most decision-makers have been in their medium-sized company for years and have passed through various departments. They actually still know approximately where a lot of information lies or can pass it “down”. Many of the younger employees do not have this advantage. In addition, it is accepted that the employees search for information instead of finding it, since you are “there anyway” and so the few minutes in total do not matter. In total, however, they do. For a company with 200 employees, this amounts to 172,000€ every month.

Bastian is the Co-Founder & CRO of the enterprise search tech company amberSearch. Me and my Co-Founders recognized the need for a state-of-the-art information management solution and now help companies and their employees to find access information as easily as possible within enterprises.  I primarily write about the latest developments relevant to enterprise search and start-ups. I look forward to growing my network on LinkedIn and meeting new people at different events. If you think, that there might be an opportunity or if you'd like to dive deeper into my topics, please reach out to me.

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