By James Schultz

A decade ago, knowledge management as a formal discipline did not even exist. Now, for the private sector, it offers the prospect of boosting bottom-line gains by distilling and directly applying hard-won know-how.

For the public sector, stressed by the rapidly evolving demands of e-government and the difficulty in attracting and retaining skilled workers, knowledge management looks to be a lifesaver.

“The public sector is absolutely dependent on knowledge management,” said French Caldwell, research director for knowledge management for Gartner-Group Inc. of Stamford, Conn. “There’s a huge work force issue looming. Fifty percent will be eligible for retirement in 10 years. You’re dealing with a work force that’s rapidly disappearing.

“And their skills aren’t keeping up with the demands of e-government,” Caldwell said. “They’re having a horrible time attracting and retaining qualified young employees.”

As much philosophy as it is movement, knowledge management — often referred to simply as KM — is defined by most experts as the ability to get the right information to the right people at the right time.

This collection, storage and istribution of institutional expertise and information depends upon state-of-the-art technology, including next-generation databases, powerful browsers, advanced search engines, turbocharged document-management software and even artificial-intelligence-like, data mining “knowbots.”

The need for robust new systems is driving an expected increase in KM spending in both the public and private sectors, according to a preliminary forecast issued in April by Dataquest, a research arm of the GartnerGroup.

Spending on KM is expected to grow 19 percent annually, during the next three years, with the most brisk business deriving from KM-related software maintenance and support, according to Dataquest. Systems integration is a close second. By 2003, overall KM expenditures should blossom to $5.4 billion, up from its current $3.4 billion.

Governments will account for about 30 percent of this spending, a Dataquest analyst said.

Knowledge management has been made possible because of the convergence of several primary technologies. Continuing advances in computing capacity allow for the stockpiling and analysis of enormous amounts of information, while products such as Lotus Notes are used widely by knowledge managers and KM-dedicated work groups.

But absent a means of rapidly accessing and sharing information, KM would be impossible. The fast maturation and increasing sophistication of the Internet has thus proven the key KM enabler.

Priscilla Emery, senior vice president of information products and services at the Association for Information and Image Management, Silver Spring, Md., said routine use of the Web will fundamentally change the way organizations operate.

“No. 1, you have to create a culture of sharing,” she said. “Knowledge is power. [But] hold onto everything you know, and you can kill the power of the organization.”