More and more enterprises have reached a consensus view on intellectual property: On the surface, competition among enterprises is about technology, products and talents. In essence, it is all about intellectual property. CCID Consulting, argues that knowledge management is precisely the important bargaining chip in the competition of intellectual property.

The concept of "knowledge management" was introduced into China in the 1990s, originated in the hi-tech industry. For hi-tech enterprises, inventions and innovations by employees - the "knowledge assets", are the most important assets to a company. If these knowledge assets are not generalized and summarized in time, they will immediately disappear with the employees when they depart the company. Effective management and use are the only way to turn knowledge assets into enterprises' competitive advantages and core competitiveness. The goal of knowledge management is to maximize the returns from knowledge and experiences.

Effective knowledge management will improve the values of enterprises' services in all business fields and directions and make it the foundation and supporting force for innovations. It can speed up technological, management and services innovations and increase customer values.

Though more and more Chinese enterprises have realized the importance of knowledge asset, most have little idea when it comes to knowledge asset management. There are many error zones in their understanding of knowledge management.

Error 1: "Knowledge management is electronic file management (namely information management)"
This view is rather common among many enterprises at present. They understand knowledge as information management, and consequently knowledge management mainly focuses on the creation, classification, storage and query of information files. CCID Consulting points out that there are notable differences between information management and knowledge management.

(1) Knowledge is not equal to information which is only part of knowledge. Firstly, according to OECD's report on Knowledge-Based Economy in 1996, knowledge includes 4 major types: know-what, know-why, know-how and know-who. It is clear that the concept of knowledge is much wider than that of information. Information is only limited to "know-what" and 'know-why'', namely knowledge recorded on a certain material carrier. We call it "explicit knowledge". However, "know-how" and "know-who" are undisclosed secret knowledge such as experiences, skills, knacks, ideas and perceptions that are stored in people's brain. These are called "tacit knowledge", such tacit knowledge does not fall within the scope of information.

(2) Information management is the foundation and important part of knowledge management, while knowledge management is not just the development and extension of information management but more the reform and transcendence of information management.

Firstly, information management only focuses on the management of explicit knowledge, while knowledge management focuses more on the management of tacit knowledge. Explicit knowledge is "the tip of an iceberg", while tacit knowledge is the main part hidden under the iceberg. Tacit knowledge is intellectual capital. It is the root that provides nutrients for a big tree. Explicit knowledge is no more than the fruits of the tree. Secondly, information management only focuses on the collection and sorting of existing information, while knowledge management leans more on the production and creation of new knowledge. Thirdly, information management only pays attention to the information itself and the management of information technology, while knowledge management focuses more on the process of information and knowledge activities and personnel management.

Fourthly, information management only provides information. It does not perform capitalized operations on knowledge to increase its values. Knowledge management sees knowledge as enterprises' most important strategic resource and pursues the appreciation of knowledge. It can be seen that knowledge management is not any simple extension or development of information management. Instead, it is a kind of reform and transcendence of information management. It is a kind of totally new enterprise management model.

Error 2: "Knowledge management is to create learning organizations"
If Error Zone 1 involves the understanding of knowledge management at the IT level, Error Zone 2 is more concerned with understanding knowledge management from the angle of organizational behavior. Since Peter Senge put forward the concept of learning organization, the thinking has also been quickly introduced into China. Many institutions in China, particularly government organs and medium- and large-sized State-owned enterprises have started to large-scale activities to build learning organizations. But, it is also a wrong understanding to equate the two.

CCID Consulting thinks that there is indeed a close link between knowledge management and learning organization, but these are two very different concepts. Knowledge management is the core process of learning organization practices. It is a key element for creating learning organizations and an important content for promoting organizations to learn. "Knowledge management" is a kind of effective means to build "learning organizations".

What is the true meaning of knowledge management?
CCID Consulting refers to Davenport's definition of knowledge management:

Management theories and practice which are about, based on a full recognition of the value of knowledge to enterprises, creating an environment to enable every employee to obtain, share and use the internal and external knowledge information of an organization to form personal knowledge, support and encourage individuals to apply and integrate knowledge into the products and services of the organization, and eventually improve enterprises' innovation ability and market response speed.