Differences between Business Intelligence and Knowledge Management

I'm teaching a course where we discuss different forms of managing and applying an organization's intellectual capital. Over the past two weeks I noticed the students experiencing some confusion over the difference between knowledge management (KM) systems and business intelligence (BI) systems. Although I have previously posted my mind mind map depicting an ontology for intellectual capital, it is not sufficiently clear how we differentiate between KM and BI. The two concepts are a part of the intellectual capital ontology and related but are also different.

While both KM and BI are used to support decision making they differ in the type of raw materials used, the processes to develop knowledge, and the type of knowledge developed. I like the models Sabherwal and Becerra-Fernandez presented to illustrate each of these. The diagram below is my adaptation of these models.

Viewing these diagrams we can see that both KM and BI use data to develop knowledge and this knowledge is applied to decision making. However, BI systems primarily use data to generate information which can be applied to generate knowledge and this knowledge is primarily developed as explicit knowledge. KM on the other hand, uses both data and information to develop knowledge and this knowledge is further developed to create new knowledge. The knowledge developed in KM applications consists of both tacit and explicit knowledge.

It can also be argued that BI is a component of KM. Looking at the knowledge management lifecycle of knowledge capture/creation, sharing, and application, we can consider BI applications used primarily in knowledge capture/creation activities. This means that we apply BI applications to capture or create information leading to knowledge but the knowledge sharing and application is outside of the scope of these systems. Whereas a KM system addresses the entire knowledge management lifecycle.

So, while both KM and BI systems are used to capture or create knowledge, KM systems address the entire lifecycle and result in tacit and explicit knowledge while BI systems are primarily used for knowledge capture and result in explicit knowledge.

This is my method of differentiating between the two concepts. Others may disagree or have alternative methods of defining these two concepts. I welcome your insight in the comments.