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Budget for knowledge management

The provision of financial resources for sharing knowledge is often an unambiguous signal to staff that the organization has definitely decided to incorporate knowledge sharing into the way the organization functions. Funding will be needed to cover the incremental costs of the central coordinating unit, the technology, the communities and help desks.

The main focus of the financial provisioning should be on support to operations. If more than 20% of the resources are being spent on technology, a review may be warranted as to whether knowledge sharing has become confused with information management.
In the more knowledge-intensive organizations, the expenditures for knowledge management can be quite significant.

 For instance, it has been estimated that the major consulting firms may spend as much as 6-12 % of revenues on knowledge sharing programs. (Source: Gartner Group, May 28, 1998). While few organizations could, or even should, attain these levels of spending, there does need to be recognition that knowledge sharing does not run on air, and appropriate funding needs to be provided.

In public sector organizations, the relative level of budget for knoweldge management is particularly important in terms of signaling to the organization's employees the importance that the organization attaches to knowledge management.


Stephen Denning, The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations. Boston, London, Butterworth Heinemann, October 2000.

Stephen Denning: The Leader's Guide to Storytelling (Jossey-Bass, 2005) chapter 8.

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