2011 Fourth International Conference on Business Intelligence and Financial Engineering

Integration :Knowledge Management and Business Intelligence

Peng Cheng

Lei Cheng

Hubei Academy of Scientific and Technical Information

Dept.of Information Mangement and Information System

CCNU
Wu Han, China
chenglei5288@hotmail.com

Wuhan

AbstractAs business competition intensifies

and the market environment becomes increasingly
complex, more and more enterprises learn to make
use of Knowledge Management (KM) and
Business Intelligence (BI) in order to improve
corporate decision-making capacity and efficiency.
However, there is still not a unified view for the
concept of KM and BI and the relationship
between the two in academia and the business
world, which may bring about confusion and
errors in theory study and application. this paper is
trying to provide a thorough analysis of the
differences between BI and KM and to establish a
framework for relating one field to the other. And
it comes to a conclusion that in business
management and decision-making process, both
BI and KM must be effectively integrated to give
full play to their complementary functions.
Keywords- Knowledge management; Business Intelligence ;

author concerned, Business Intelligence refers to a

transition from a variety of data (within and
outside of the enterprise) to information (or
knowledge) for business decisions so as to help
enterprise managers make scientific decisions and
enhance its competitive advantages.
The same situation occurs in the research
development of Knowledge Management (KM).
Scholars come up with the definition of KM from
different perspectives and there is still no
conclusion even now. Peter F. Drucker, professor
from Harvard University first proposed the
concept of knowledge management. He believes
that Knowledge management is to provide
knowledge and existing knowledge to find
effective and how to use knowledge to produce
the best results. And stressed that knowledge
management should be based on learning
organization [3] Narrow knowledge management
mainly refers to the management of knowledge
itself, including knowledge creation, acquisition,
processing, storage, dissemination and application.
On the other hand, generalized knowledge
management includes not only knowledge
management, but also management of various
resources related to knowledge. KM system is a
platform which organizes and implements KM, it
includes management tools which tackle explicit
knowledge and tacit knowledge. It can collect,
collate, transfer, share knowledge, and achieve the
conversion from tacit knowledge to explicit
knowledge
through
the
socialization,
internalization, externalization and combination of
knowledge, thus creating new knowledge. [4]

comparison analysis ,Integration

I.

BACKGROUND

Business Intelligence (BI) derived from the

decision-making support technology in 1970s,
which later experiences a gradual and complex
evolution including Transaction Processing
System (TPS), Executive Information System
(EIS), Management Information Systems (MIS),
Decision Support System (DSS) and other stages,
[1]. In 1996, Gartner Group [2] defined BI as a
series of technology or application systems which
consist of data warehouse (or data mart), reporting,
data analysis, data mining, data backup and
recovery components, and which contribute to a
better business decision and finally can help
enterprises to keep a leading position in the
competitive market. Today, there is still not a
unified and accepted concept of BI. As far as the
978-0-7695-4527-1/11 $26.00 2011 IEEE
DOI 10.1109/BIFE.2011.172

China

chengpeng@hbsti.ac.cn

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II.

knowledge resources, and knowledge sharing and

innovation are the primary goals of it. It attaches
importance to the interaction of explicit
knowledge and tacit knowledge, encourages
knowledge innovation, and strives to create a
corporate culture of knowledge sharing and
operational mechanisms. For organizations, BI
copes with objective information in the real-world,
while KM systems tend to process subjective and
personal knowledge, including a large number of
explicit and easily-copied knowledge in the real
world and hidden knowledge stored in the
individual mind which is hardly directly accessible,
such as people's thoughts, skills, experiences and
perspectives.
(3)Core technology. BI attaches more
significance to data analysis and its core
technologies consist of data warehousing, online
analytical processing, data mining and enterprise
information portals. On the other hand, the core
technologies of KM involve document
management, groupware technology, text mining
and retrieval technology, enterprise knowledge
portals and so on.

COMPARISION OF KNOWLEDGE MANAGEMENT AND

BUSINESS INTELLIGENCE

Similarity of BI and KM. [5-6]

(1) They are both based on information
technology. BI and KM both rely on the Internet,
computer hardware, software, database storage
and network communication technology.
(2) Their application in business processes
both includes collecting, collating, sharing and the
use of information and knowledge, and they both
achieve their functions depending on information
and knowledge. KM and BI interact with each
other and complement each other.
(3) Subjectiveness of man is both emphasized
in the application of them. KMs object is
knowledge, and it particularly concerned about
humans who master knowledge, their culture and
behavior. It emphasizes the importance of the
knowledge innovation and whether it is used
effectively. BI initially focused on technology and
data, the applied effect of which in fact is closely
related to users skills as people normally use
quantitative analysis of technical expertise to solve
business problems with the aid of business
intelligence systems.

A.

III.

Differences between KM and BI

(1) Connotation. BI evolved through
transaction processing systems, administrative
information systems, management information
systems, decision support systems and so on. KM
is the management ideas and methods in the
development of the knowledge economy era. It
stressed that knowledge is the most important
resource and strategic capital, the corporate
competitive advantage depends on knowledge
creation, dissemination and utilization. KM
focuses on capturing, sharing, distribution of nonstructured text and graphical information ..
(2) Focus. BI mainly deals with information
resources. As its objective is to make information
resources orderly and structured, the whole
process of BI is relatively closed and independent,
and it pays more attention to the combination and
integration of the external morphology of
information. While the KM systems deal with

RESEARCH STATUS OF THE RELATIONSHIP

BETWEEN KM AND BI

B.

Current research status abroad

Richard T. Herschel and Nory E. Jones [7]
look BI as a subset of KM. They believe that BI
focuses on explicit knowledge, while KM includes
both tacit knowledge and explicit knowledge. Both
of them work well in facilitating learning, decision
making and understanding.
Cook and Cook consider [8] that knowledge
management and business intelligence are both
derived from enterprise management theory and
supported by technology. BI helps organizations to
increase the value of information, but it is unable
to integrate non-quantitative data. 80% of
corporate business information is unstructured or
semi-structured. To extract useful information and
knowledge from the unstructured text is more
valuable to the enterprise.
Okkonen J. finds[9] that the knowledge
management and business intelligence are to some

A.

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extent cross. BI converts data into information and

intelligence, and KM systems add significance to
such information and intelligence.
Kadayam thinks[10] that KM and BI should
be integrated. He claims that rapid technology
development is building a bridge between KM and
BI, and their integration will deepen and broaden
the search for knowledge and information, in the
meantime it will increase the value, movements
and investment returns of intelligence.
At present, some enterprises have started to
develop an integrated platform of KM and BI.
IBM [11] proposes that although KM is not as
mature as BI, as time goes by, the systems will
learn from each other and stimulate new methods
for utilization, which results in a joint work, and
this hybrid system is called KMBI.
Nemati [12] believes that only if KM and BI
are integrated can corporate decision making and
corporate behavior be improved. They urged that
the new generation of knowledge systems should
capture, screen, store, organize and disseminate
not only data and information, but also business
knowledge. They suggest that knowledge
warehouse can be an extension of data warehouse
model. It will be beneficial to knowledge capture
and coding, and also improve the reuse and
sharing knowledge in an organization.

KM system and information system, which results

in a lack of knowledge storage and processing
capabilities of the enterprise. Actually, knowledge
management plays an important part throughout
the course of business as well as data management
and information management and it is an integral
part of business activities. Thereby, the existing
knowledge management systems need to be
integrated with enterprise information systems in
order to meet the needs for enterprise knowledge
management. Because business intelligence
systems are closely relevant to enterprise
information systems, the integration of KM and BI
can closely relate KM to information systems in
the enterprise.
This paper defies the integration result of BI
and KM systems as KMBI framework. According
to the hierarchical design ideas of information
system development, KMBI can be divided into
three layers: data integration, function integration
and presentation integration.
Data layer: The data layer of the BI system
includes a variety of underlying database and
information resources from CRM, ERP and SCM
system in the enterprise. The knowledge base of
KM system is made up of internal and external
information and is responsible for responding to
search requests, the storage management of
knowledge and so on. The integration of KM and
BI on the data layer realizes the integration of
distributed and heterogeneous data by middleware
and some other technology.

Current research status in China

In China, Liu Li [13] proposes that knowledge
management is a necessary means and a booster to
business intelligence. Zhu Xiaowu [14] holds the
point that business intelligence is using a specific
method to solve the problem of knowledge sharing
in knowledge management. Jane Chenfu [15]
considers that the information gained by enterprise
is a source of enterprise knowledge, and it should
be involved in the system of knowledge
management so that it can be diffused and shared.
B.

IV.

Logical layers: The logical layer integrates key

functions of KM and BI. The function modules
comply with the principles of high cohesion and
low coupling. The logical layer helps to the
comprehensive analysis and exchange of
enterprise data, information and knowledge.
User level: The user level is the interface of the
user with the system. KM and BI share terminal
technology in the access to content and the
display of it.The integration of KMBI platform
further integrates knowledge management and
business intelligence and thus the corporate
intelligence portal is formed,

RESEARCH ON THE INTEGRATION OF KM AND BI

At present, in enterprise the KM system is

usually independent from the information system,
or is as a separate module connected through the
interface to the information systems. Consequently,
the links especially data links is missing between

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and they have different system framework.

Therefore, the integration of them should be based
on their common characteristics. The integrated
KMBI system can maximize user productivity,
provide enterprise customers with the best service,
realize the analysis and utilization of a variety of
data, information and knowledge by enterprise
decision makers, improve the quality and speed of
decision making and enhance competitive
advantage.
References
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Figure 1.KM-BI Intelligence ;framework

which is able to provide more convenient

information and knowledge service for decisionmaking and management. Employees can easily
query and acquire knowledge in the knowledge
base in order to share and exchange knowledge,
and they can constantly enrich and update the
knowledge base. They can also obtain real-time
business data, and use OLAP, data mining and
text mining technology to get the law or new
knowledge from a large number of data resources,
and store the proven knowledge of laws into the
knowledge base to achieve knowledge re-use and
innovation. Decision-makers combine data,
information and knowledge with specific business
processes into systematic knowledge which is
used to guide the actual work.
V.

CONCLUSION

From the above analysis of KM and BI, we can

safely draw a conclusion that KM and BI are
complementary as they develop as systems in their
respective fields with an independent functions

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