Enterprises need interactive forward thinking intelligence for competitive advantage

Disclosing the economic value of knowledge. A functional paradigm.

During the 9th European Conference on Intellectual Capital in Lisbon in April 2017, Dr. Larry Lucardie gave a few scientific insights that initiates advanced thinking and a new generation of ICT   

The value of knowledge is not in line with its economic valuation. Due to how economic value is perceived in the industrial systems of the 19th and 20th century, corporate bookkeeping systems do not explicitly account for knowledge. In centrally guided systems economic value was linked with material commodities created by physical labour, whereas in capitalist countries the value of immaterial assets was denied by accountancy foundations. While industrial systems have transformed into knowledge economies, bookkeeping systems still rely on concepts of industrial economies.

Knowledge economies being complex systems and enterprises, as a consequence, struggle when processing service requests. Knowledge management activities are not targeted to mastering complexity, but instead are focused on representing it. Representation of knowledge is often human-based suffering from randomness and limiting scalability in time and space. IT approaches focus on representation of logic in legacy systems that are closed and rigid and not very adequate to convey and maintain knowledge. Enterprise logic is represented in text documents, calculation sheets, flow charts and similar techniques that do no justness to the characteristics of complexity.

So, our views of knowledge and knowledge management do not seem to be in a satisfactory shape and need revision. Old fashioned concepts underlying bookkeeping systems need to be synchronised with the knowledge economy. At the same time, the value of knowledge needs to be capitalised. The current accumulation of inefficiencies offers an expected but much needed and excellent opportunity to induce a paradigm change to accomplish this. The paradigm of functional object-types delivers a broader and deeper view of knowledge relating it to complexity. It provides a theory how to characterise and structure complex logic and render knowledge usable and adaptable for the transformation function of an enterprise. In addition to scientific advances, the first practical results reveal that the paradigm, including its Match™ Technology instruments, yields unprecedented achievements that are unthinkable with classical business improvement approaches. It showcases formidable time reductions in the transformation model, lower development and maintenance costs and higher quality of enterprise logic. Its 7th generation application-by-specification development is revolutionary short and elastic.

During the 9th European Conference on Intellectual Capital in Lisbon in April 2017, Dr. Larry Lucardie states that in our current economy the value of knowledge is not in line with its economic valuation.

The increasing value of knowledge is the result of the transition towards a knowledge-based economy.
This complex system follows laws different from the industrial economy and companies have to adapt.

First of all, we need to adopt an adequate theory of the knowledge and technology aligned to this theory. The theory of functional object-types (Lucardie, 1994) and the Match™ Technology Framework are examples. Implementations in the financial and telecommunication areas have very promising results, e.g.: better structured process descriptions and documentation, improved and cheaper software specifications and rapid application development.
This yields a reduction of operational expenditure and increased agility.

Second, ICT needs a revision so that applications facilitate knowledge processing in separate transparent and modifiable knowledge bases that render applications superfluous and decrease IT application complexity. Digital knowledge bases can be made available through web services. Especially in the internet channel, enterprises need interactive forward thinking intelligence for sales and advice to massive markets. ICT architectures need to change into knowledge-based IT architectures that are flexible enough to cope with the dynamics of complex socio-economic systems.

Third, we need change management to learn that human resources work and think differently (knowledge sharing instead of knowledge possession), while changing rewarding and remuneration systems. A knowledge-based way of working can only be implemented if an organizational culture is addressed.