AI's Dual Role in Transforming Knowledge Management

Knowledge management is experiencing the fastest growth in its 40-plus-year history, and expansion is accelerating in this long-underappreciated IT segment. As with many technology sectors, the primary driver behind KM’s strong positive momentum is AI adoption; however, unlike many other sectors, KM benefits from the AI revolution in two distinct ways. First, KM is an essential enabler of company AI initiatives, acting as a trusted data source to power various AI-based systems and applications. At the same time, the KM market is also the recipient of AI’s ability to enhance its solutions, placing this segment in a unique and opportune position.

Effective knowledge management is more relevant and critical than ever in today’s frequently decentralized business environments. The new generation of KM platforms provides highly intelligent and scalable frameworks that ensure knowledge remains organized and accessible throughout an organization and can grow with it. These solutions help businesses meet ever-increasing customer demands, be more competitive, improve efficiency, and optimize their intellectual assets. This, in turn, enhances the customer and employee experience (CX/EX) and the bottom line for companies.

The Impact of AI

AI technologies, including generative AI (genAI), are transforming KM platforms by automating knowledge creation and maintenance, categorization, search, discovery, and more, while personalizing the experience for customers and employees alike. These new capabilities help businesses increase human and automated agent productivity and deliver on the promise and value proposition of making better use of their intellectual capital and improving decision making.

AI also enables KM vendors to address three of the long-standing issues with these solutions: the “garbage in/garbage out” challenge; getting people to draft the content and keep it up to date; and how to easily and rapidly access the right information or answer. 

AI technologies have altered the course and contributions of KM. When used in traditional ways to support employees and improve the CX, a KM solution is expected to pay for itself in 12 to 24 months, but this is only one of its benefits. KM applications that leverage AI to ensure information is well-maintained and up to date can be used to ground genAI-created responses in customer-facing self-service and agent assist solutions (among others), and even enhance the KM’s own search results. Utilization of advanced technologies like retrieval augmented generation (RAG) frameworks help boost response accuracy and relevance and can improve the effectiveness of guardrails in reducing hallucinations. As exciting and beneficial as these platforms already are for organizations, more innovative uses of AI/GenAI technologies and automation are on the way.

Expanding KM Benefits

For decades, knowledge bases and other data repositories like SharePoint were primarily used in contact centers, technical support organizations, and customer service functions as reference tools. The intended objective of these applications was reducing agent onboarding, training, and interaction handle times. Agents often disliked these solutions because they were required to look up responses, even when doing so increased their average handle time (AHT), and answers were as likely to be wrong as they were right. The new generation of AI-enabled KM platforms, which distribute accurate knowledge in many different formats and channels to employees across enterprises, as well as to prospects, customers, and partners, changes all this.

Sophisticated KM platforms take the delivery of optimized knowledge content to the appropriate constituents even further. AI/genAI-powered solutions with enhanced workflows and intelligence can provide information automatically, without requiring the end user to perform a search. In addition, these advanced applications can capture, analyze, and combine data from multiple sources to create comprehensive, yet succinct, synthesized responses that cite and/or link to the original references. This level of knowledge can be applied in real-world scenarios to drive business decisions, improve the customer and employee experience, and enhance operational efficiency.

Why Investing in KM Is a Smart Move

There are many converging business trends beyond AI driving the adoption of KM. One of the most prevalent is the growing preference of consumers to help themselves whenever possible. As interaction volumes in self-service channels continue to pick up, having a centralized and standardized KM that delivers context-relevant, accurate answers in a channel-optimized format vastly improves the CX and reduces the number of inquiries requiring live agent support, making this a win for both customers and companies. Additionally, as businesses increase their focus on delivering an exceptional CX, they are looking for tools to help achieve this goal cost-effectively. KM solutions are instrumental in accurately and consistently delivering information and answers across all customer touchpoints, enhancing customer satisfaction and brand loyalty.

Employees working remotely, whether full-time or on a hybrid basis, are another driver of KM adoption. These staffing models make it essential for companies to have a robust KM solution to ensure employees have timely access to the information and procedures they need, regardless of location. The growing use of collaboration tools (which is heavily influenced by dispersed workgroups) also increases the demand for KM solutions that centralize organizational data, making it easier and faster for teams of employees to collaborate and share knowledge.

KM solutions can also be instrumental in helping human and automated agents securely and properly comply with internal and external regulatory requirements. In addition, they help keep regulations easily accessible and up to date. With the growing threat of cyberattacks, KM solutions secure sensitive information and ensure only authorized personnel can access it.

Outlook for KM

Knowledge management solutions have always had great potential, even though that potential could not be fully realized due to technical and business limitations. However, the inclusion of AI technologies, with an emphasis on genAI, has significantly changed the trajectory of this IT segment. In many situations, KM platforms now serve as an essential data source to support a variety of AI-based solutions. In other cases, it’s being used as a guardrail to prevent genAI-enabled systems from sharing incorrect or inappropriate information with a customer or employee. While great advancements have been made in KM platforms during recent years, innovative KM vendors are just getting started. Leading competitors in the KM market are positioned to deliver enhancements that continue to improve system usability and increase benefits as these solutions are more fully integrated into the system fabric and infrastructure of the companies they support.

Donna Fluss, founder and president of DMG Consulting, provides a unique and unparalleled understanding of the people, processes, and technology that drive the strategic direction of the dynamic and rapidly transforming contact center and back-office markets. Fluss can be reached at donna.fluss@dmgconsult.com.

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