In today's knowledge-driven economy, organizations are increasingly dealing with intangible assets and intellectual properties like human capital, customer capital, patents and brands. Accounting these issues has become a daunting task for organizations and must be properly included in the corporate financial accounts. Unlike in the past, these intangibles are now contributing maximum to a firm's bottom line. Innovation and knowledge have become the key imperatives from automobiles to aircraft, from mobile phones to office equipment and computers to sports equipment. Accordingly, these intangible, knowledge assets are dominating the corporate balance sheets and revealing their value of knowledge by demonstrating how it is, or how it can be converted into purchasable goods and services. Against this backdrop, knowledge is recognized as the most important strategic asset in any organization across the globe.
However, in many organizations knowledge is invisibly created, captured, distributed and shared throughout the organization. And most importantly, intangible assets are not easy to quantify, measure and value. Organizations are universally acknowledging the difficulties they encountered in attempting to quantify and measure these intangibles. These developments offer a strong case for Knowledge Audit or K-Audit. It is the first major stage in effective knowledge management and corporate knowledge valuation. Moreover, with the help of knowledge audit, organizational knowledge can be quantified, measured and assessed.
K-Audit focuses on the core information and knowledge needs in an organization by identifying the gaps, duplications, flows and their contribution to business goals. With sound investigation, it provides an organization knowledge health. In short, it provides an evidence-based assessment of where the organization is required to focus on in its Knowledge Management (KM) efforts. K-Audit may refer to identifying specific knowledge assets such as patents and the degree to which these assets are based, enforced and safeguarded. Dr. Ann Hylton, a leading knowledge auditor defines, "The K-Audit is a systematic and scientific examination and evaluation of the explicit and tacit knowledge resources in the company. It investigates and analyses the current knowledge-environment and culminates, in a diagnostic and prognostic report on the current corporate `knowledge health'. The report provides evidence as to whether corporate knowledge value potential is being maximized. In this respect, the K-Audit measures the risk and opportunities faced by the organization with respect to corporate knowledge." By using K-Audit tool, any organization can reveal its KM needs, strengths, weakness, opportunities, threats and risks. |
