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KNOWLEDGE MANAGEMENT FRAMEWORK IMPLEMENTATION

IN GOVERNMENT TO INCREASE ORGANIZATION

PERFORMANCE

Swasthi Marsha Hapsari

Institut Teknologi Bandung, West Java, Indonesia

Email: marshap[email protected]

Abstract

The Jak preneur Program is one of Dinas PPUMKM's most successful MSME empowerment

and development initiatives in Jakarta. MSMEs are critical to the global economy,

contributing to job creation, innovation, and economic growth. However, they frequently face

challenges in effectively harnessing and utilizing their knowledge assets to drive

competitiveness, particularly for the DKI Jakarta Provincial Government (Pemprov DKI

Jakarta). This study investigates the implications of knowledge management in a government

organization's Jak preneur program under the supervision of Dinas PPUKM (Provincial

Government Department of Industry, Trade, Small and Medium-sized Enterprises).

Furthermore, the study's findings will help MSMEs overcome the lack of knowledge-based

growth barriers. This thesis investigates the concept of knowledge management (KM) in the

context of public government organizations. The goal of this study is to provide a

comprehensive analysis of Knowledge Management practices in government organizations,

examining current approaches, challenges, and potential strategies and frameworks for

improvement. The study employs a qualitative approach that includes in-depth interviews

and focuses on group discussions (FGD) with multiple perspectives from MSME owners,

managers, mentors, and facilitators in order to identify knowledge gaps, which will be

classified into four categories: people, processes, technology, and governance. Each

stakeholder is expected to participate in the knowledge management process, accelerating the

organization's goal of raising the standard of its MSMEs. The study's findings can help

policymakers, MSME practitioners, and researchers design and implement effective

knowledge management initiatives. The proposed system is intended to be used to clarify the

management of Dinas PPUMKM (Provincial Government Department of Industry, Trade,

Small and Medium-sized Enterprises), including not only roles and responsibilities but also

how the knowledge management system can improve the company's day-to-day performance.

Keywords

Knowledge Management, Entrepreneur, Learning Organization, Micro, Small

and Medium Enterprises (MSME).

INTRODUCTION

Entrepreneurs are essential actors in the nation’s economy. By creating new products and

delivering new services, they stimulate new employment, ultimately accelerating economic

development (Mohamed, 2020). Within the past few years, the country ranks in 16

place for

the largest economy in the world. According to the World Bank (2022), Indonesia has

experienced a steady growth of 5,1% GDP in 2022, establishing itself as a confident potential

middle-income country. In addition to contributing to economic growth and employment,

Injuruty: Interdiciplinary Journal and Humanity

Volume 2, Number 6, June 2023

e-ISSN: 2963-4113 and p-ISSN: 2963-3397

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MSMEs play an important role in disseminating development outcomes. Digital economist

Rudy Salahuddin stated nation's economic recovery is inseparable from the role of MSMEs

which are critical engines of the economy, considering that 99% of businesses in this country

are MSMEs (Handayani, 2023).

As of 2023, several economic experts predict that Indonesia’s economy will be relatively

strong, mainly the digital economy is predicted to become a source of growth for Indonesia in

the future. Thus, MSMEs are still a powerful source of Indonesia's economic growth. The

Micro, Small and Medium-sized Enterprises (MSMEs) Act of 2008 governs MSMEs which

are defined by annual revenue of IDR 500 million. Yet, many business opportunities were

emerging in Indonesia, specifically in the capital city like Jakarta.

The definition of MSMEs is typically defined by the number of total assets, annual sales,

and the number of employees. According to Law No.20/2008: Micro, Small, Medium-sized

Enterprises (MSMEs) should be a functional entity owned by an individual or a standalone

business unit that is not a wholly owned, controlled subsidiary of, or a branch of, another

company. Companies that are wholly or partially controlled by a foreign entity or have received

significant investment from outside are not considered micro, small, or medium enterprises

(MSMEs), even if they fit the other criteria below.

Figure I. Classification of of MSMEs in Indonesia based on Omzet

Source : SME Law 20/2008, Ministry of Cooperatives and SMEs

According to the DKI Jakarta Central Statistic Agency (BPS), there are at least 1,100,000

MSMEs in the DKI Jakarta Area. This figure represents 98,78% of the total number of business

in DKI Jakarta (Rezqiana, 2021). Recognizing this potential, the DKI Jakarta Provincial

Government (Pemprov DKI Jakarta) encourages the development of its MSMEs through

Integrated Entrepreneurship Development (PKT). After a number of year, the program was

redeveloped and improved using the new brand called Jak prenuer. A program that facilitates

collaboration on MSME development into an entrepreneurial ecosystem. Because of the

enormous digital potential for the economy, the government has continue to encourage MSMEs

to take advantage of it, particularly in the post-pandemic era. In 2023, Pemprov DKI Jakarta

has optimistic targets to leverage the size of MSMEs, adopt their digitalization to develop their

business, as well as boosting the productivity and skills of the knowledge worker (Kepala Dinas

Perindustrian, Strategi Pemberdayaan UMKM di DKI Jakarta Melalui Program Jakpreneur,

2023).

When it comes to serving the needs of MSMEs as business players, the government needs

a solid strategy, foundation, and organizational knowledge to manage the development of

MSMEs effectively. Aldi and Elnath (2005)argues that this sort of management will pave the

way for the acquisition of new knowledge, which in turn will help businesses keep up with the

exponential rate of change. As the most valuable asset, knowledge should be sought where it

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resides, primarily in employees. It explains how changes in organizations and production

processes, such as flexible organizations, differentiated products, and versatile and

multifunctional workers, have resulted in the formation of new business structures that are

adaptable to changes and demands in the global market (Esthi & Sukmawati , 2011).

Under Dinas PPUMKM (Industry, Trade, Small, Medium Enterprise Cooperatives) this

study will investigate the implications of knowledge management in a government

organization Jak preneur program. Furthermore, the study's findings will assist MSMEs in

overcoming the barrier to growth caused by a lack of knowledge. In order to achieve their goal

of increasing the development of MMSEs, Dinas PPUMKM is suggested to incorporate

knowledge management practices into their Jak preneur program. Due to the ongoing national

economic crisis, large-scale businesses are playing a more minor role, and small and medium-

sized enterprises (SMEs) are rising to prominence as a result. This suggests that SMEs have

the potential to become an integral part of the economy as a whole. To that end, change-

producing processes are implemented in organizational culture, information, motivation and

incentives, and staff training or education (Hendrawan, Kuswantoro, & Sucahyawati, 2018).

According to Governor Regulation No. 2 of 2020 Article 2 states that "Society can

develop entrepreneurial potential by utilizing human potential as independent entrepreneurs,

qualified and resilient and can reduce unemployment and poverty through entrepreneurial

opportunities". Therefore, this entrepreneurship development program can be expected to be

able to utilize the potential that is owned in order to improve business quality and reduce

unemployment through entrepreneurship opportunities. As a result, the government must

understand the characteristics, challenges, and opportunities that MSMEs faced, especially in

today’s digital world. Cities that recognize the opportunity and can take a novel approach to

provide new innovative services to leverage MSMEs can benefit from a growing economy and

helps enterprises acknowledge their business potential. Providing adequate infrastructure to

support the potential of its MSME sector will also contribute to the country's future economic

prosperity.

RESEARCH METHOD

The theoretical framework is the foundation upon which all knowledge for a research

study to provides structure and support for the study's rationale, problem statement, purpose,

significance, and research questions. A research plan with a theoretical framework, on the other

hand, enables the dissertation study to be strong and structured, with an organized flow from

one chapter to the next research. The research design framework was formed to assist the author

in proposing an appropriate strategy of knowledge management that the organization of Jak

preneur could adopt to improve its organizational’s goal to leverage the performance of its

MSMEs members.

As the research methodology, a qualitative approach will be utilized to investigate high-

quality data which is suitable and tradition for being used in the SMEs field (Desouza &

Awazu, 2006; Chetty, 1996; Romano, 1989; Gill, 1995). The objective of qualitative research

is to investigate the significance of people’s experiences, the meaning of people’s culture, and

how people view issues or cases (Creswell, 2009).

According to the research questions, the authors believe that applying the qualitative

approach to this research will have a more significant impact in terms of evaluating the current

problems and exploring the precise solution that relates to the problems that have occurred.

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The author will take part in the interviews and FGD (focus group discussion) process, seek

documents needed, conduct observations, and then consolidate all the data with the amount of

time to generate those things into them.

The secondary data source will include books, journals, papers, government records, and

other personal sources. An extensive literature review was conducted, which aided in the

formulation of the direct data collection questionaries. More precise qualitative and

quantitative data and statistics are required to profile MSME entrepreneurs (demographic

information, barriers to start-up, and growth). As a result, the visibility of MSMEs

entrepreneurs would increase. Using a lens like the one described in the report could aid in

making sense of the data.

According to the research questions, the authors believe that applying the qualitative

approach to this research will have a more significant impact in terms of evaluating the current

problems and exploring the precise solution that relates to the problems that have occurred.

The author will take part in the interviews and FGD (focus group discussion) process, seek

documents needed, conduct observations, and then consolidate all the data with the amount of

time to generate those things into them.

The secondary data source will include books, journals, papers, government records, and

other personal sources. An extensive literature review was conducted, which aided in the

formulation of the direct data collection questionaries. More precise qualitative and

quantitative data and statistics are required to profile MSME entrepreneurs (demographic

information, barriers to start-up, and growth). As a result, the visibility of MSMEs

entrepreneurs would increase. Using a lens like the one described in the report could aid in

making sense of the data.

Once all of the data has been collected, methods for analyzing qualitative data will be

investigated. The data were qualitatively analyzed by looking for recurring topics and

providing an overview of a data set's characteristics, identifying patterns, and highlighting any

significant features or outliers. The author employs descriptive analysis to describe the

circumstances and their characteristics, with a focus on contextual issues (Gall, Gall, & Borg,

2007).

One similarity between qualitative and descriptive research is the use of naturalistic data-

fields (Hossein, 2015). It is critical to accurately record and transcribe the interview in order to

avoid errors and data loss during direct data collection. For each type of interview, a separate

recording file will be created to be used in the later stages of data organization and analysis

prior to the formation of any conclusions

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RESULT AND DISCUSSION

Root Cause and Altivernative Solution for Jak preneur People.

Table 1. Root Cause And Altivernative Solution For Jak Preneur

Category

Root Cause

Alternative Solution

People

1. Lack of human resource as

the business mentor for the

member of Jak pruner –

causing vagueness of

detail job’s task

2. Lack of motivation to

grow and learn more

3. Communication is limited

and sometimes not clear

1. The organization should start to build

integrated ecosystem which include

collaborating with former

businessman and current successful

member

2. Find the suitable strategies that match

with the current regulation and

financial allocation planning but also

concerned about the development of

employees

3. Building the learning culture by

investing more on the people well-

being

4. Build a project management system

to enhance the communication and

clear out the task

Process

1. No specific agenda for

each learning and

mentoring process so that

in the process of

developing umkm, which

make it not follow through.

2. The learning process is

still one-way, which two

way learning has not taken

place.

3. The system created is still

complicated and does not

support the 7P mission of

the Jak preneur program.

4. Lack of available business

ecosystem and limited

network among Jakpreur

members.

1. Set a new department of Knowledge

Management that can be included in

the human resource management

department.

2. Online and offline activities should be

made two-way such as being able to

build Community of Practice (CoP),

Innovation Circles, and Knowledge

forums

3. Reset the system focus, and reduce

the unnecessary list and proved more

clear friendly system.

4. Create a business ecosystem using an

integrated website system, where all

mentors and business actors can

connect online or directly.

5. Establishing knowledge sharing time

which is important for the

management as well as the Jak

preneur members and should be

documented well in storage.

Technology

1. Limited acess to

technology

2. Data bank has not been

systematically collectd

3. Technology is still used

one-way, making users

unwilling to use the

existing Jak preneur

system.

1. Create app extensions or super apps

that are easily accessible not only from

PCs but also from cell phones.

2. Set new knowledge repository so that

knowledge sources can be recorded

and accessed.

3. Organizations can create feedback

reports and analysis so that users can

also be educated and want to use the

Jak preneur system. So that this

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community can collaborate on

knowledge.

Government

1. Limitation of innovation

and development within

the government ecosystem

1. The need for internal government

initiatives, for example, through

TGUPP channels that can help change

existing regulations in the government.

With internal changes in the DKI

Jakarta government, matters regarding

regulations, SOPs, and KPIs can help

change the work objectives of the

organization.

With the table above, the author concludes by writing 4 factors of key elements of

the KM framework that need to be implemented below on Tabl2

Table 2. Key Elements of the Four Building Blocks of the Jak preneur Knowledge

Management Framework: People, Process, Technology, and Government.

People

Process

Technology

Government

Key

Competencies

Leadership Ability to

encourage behaviour

Individual Capacity

Collaborative culture

Individual

commitment

Managerial Skills

Sharing

information

Information

Data system

Realistic Target

Consulted / Key

person Policy

Approach

Increase productivity

and motivation with

collective information.

The full use of

integrated system

Efficient and

easy system

Concentrated

task and

achievable

quality target

Support

Support program

Adequate

compensation for the

member of Jak

preneur.

Government

KM Leader &

Staffs

Internet of

Things Data

bank Manual

books

Information

technology and

data base

Other

Consideration

Communication and

training CoP

(Community of

Practice)

To maintain

standardized and

equal knowledge

among workers

Cloud sharing

Public training

on the system

Bureaucracy

Maintain

relationship

Proposed SECI Model

In the process of knowledge development with the passage of time and the wider and

more active of each Jak preneur member and management, it is hoped that each stakeholder

will participate in the SECI process, so the acceleration curve of the growth and development

of new organizational knowledge is getting higher and it is hoped that it can accelerate the

organization's goal of raising the level of MSMEs. From figure IV.1 below, the process of

continuous interaction between explicit and tacit knowledge is expected to take place in the

Jak prenur program.

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Figure 2. Proposed SECI

Proposed Jann House Model

Jann's KM model framework for the Jakpreneur program by the PPUMKM Agency is

explained using the analogy of a two-level house building on figure 3

Figure 3 Proposed Jann House Model

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The internal management system and bureaucracy is one of the main problem from Jak

preneur organization to accelerate their performance. Therefore, making an integrated system

of communication and working activity between all the stakeholder components need to be

done. Organization can start consider by creating a knowledge management division which

focuses on managing the internal company knowledge resources. This division focusses on

analyzing the organization’s vision and mission, then making detail strategies to making it

happen. KM division will work along with the main sections of Dinas PPUMKM which are

industry sector, SMEs sector and marketing. Thus, this division will also balanced out not just

the overwhelming task but rather to synchronized the target of the government to the mission

of the organization.

Figure 4 Proposed KM Division

Proposed RACI System

In its daily activities, the Jak preneur program experiences great difficulties, especially

in human capital where many work tasks overlap with each other, therefore the author suggests

a solution for project management that can be implemented in the learning process in the

organization. The solution regarding the RACI (Responsible, Accountabl Consulted, and

Informed) system below.

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Table 3 Proposed RACI System – Example: on establishing business monthly

feedback to the member of Jakrpreneur

Project Task

SMEs

Industry

Training

Center

PUSDATIN

Head of

Dinas

PPUMKM

Senior

Manager

Phase 1: Research

Strategic

Framework &

Model

Risk factor

Phase 2 : Structure & Data Collection

Concept &

Modelling

Data collection

Design wire

frame

User journey &

Testing

Development

backlog

Delivery

roadmap

Legend

Responsible

Accountable

Consulted

Informed

(Source : https://www.forbes.com/advisor/business/raci-chart/ )

The proposed system is intended to be used to clarify the management of Dinas

PPUMKM, not only the roles and responsibilities, but also the milestones and decisions that

take place, thereby improving the organization's daily performance. RACI can help with clarity

on task ownership, management can empower each employee to fulfill their respective roles

and collaborate more effectively. This makes employees more motivated and more productive.

In short, the RACI matrix template allows you to do more, with less effort which can help the

organization's performance as well.

For programs or organizations with multiple projects and complex deliverables, the

template can even be customized for each division of work using a consistent RACI model.

This consistency allows for greater visibility into who is doing what for each milestone and

task within a project. Since the RACI format is the same for the entire company, you will know

how other teams are using it, even if they are in different departments. With consistent use,

confusion is reduced and people feel more connected to their work.

Implementation Plan and Justification

To be successful, the approach to improvement has to be targeted, pragmatic, and

results-oriented. The organization needs to rethink the knowledge development model to

manage its resources as well as boost its performance. The five steps of Knowledge

Management Strategy in figure below can be implemented to Jak preneur program in Dinas

PPUMKM to solve problem in management system.

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Figure 4 Proposed Implementation Plan

Determine the Objective & Strategy

Related to the result of the data collection, the main concerns that Jak preneur program

in Dinas PPUMKM faced are lack of human resources management, unintegrated system, and

no clear establishment on knowledge management system. Therefore, here are some objective

of Knowledge Management Strategy of Jak preneur:

a. Employee development in increasing soft skill, and leadership capabilities of management

resource and employee.

b. Establishing and improving the integrated information system/data bank in PUSDATIN

(Data and Information Center) section.

c. Developing central coordination unit and Knowledge management division.

Referring to the three objectives listed above, the organization needed to conduct training

for the management and employees of Dinas PPUMKM in order to improve the essential skills

that the organization may require to achieve their performance. Based on the FGD process, it

was agreed that the administrators and mentors of this program should also be given knowledge

in order for the mentoring and learning process to run smoothly. Leadership development is

another critical aspect that will provide and improve confidence, strengthen internal and

external communication, and develop character and culture within the organization.

Furthermore, the PUSDATIN (Data and Information Center) is not only improving its

existing system but also establishing a data bank and knowledge repository. This establishment

is critical because it will aid the new division of KM and provide the organization with useful

information, allowing them to resolve organizational issues. Knowledge repositories will assist

in making knowledge easily accessible to the entire team.

The author has considered and determine the KM Strategy related to the analysis from

chapter 4. Strategies are listed below.

a. Improving the skills and quality of employee of Dinas PPUMKM

b. Encouraging a CoP – Community of Practice within the organization.

c. Integrating the information system and data bank and developing the current system.

d. Formulate the new additional KM and organization system.

e. Encouraging the employee to learn and use the existing system.

Asses the Readiness of People, Process, and Technology

People, processes, and technology are the three key components of Knowledge

Management that must be properly integrated. The synergy of these three aspects will add value

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to the organization's knowledge management process. According to the discussion in the FGD

process, people in the organization as knowledge workers are aware that the knowledge sharing

and transfer process exists, but they do not understand or know what knowledge management

means. We need to encourage employees to be able to implement a knowledge management

system and to be more aware of the importance of carrying out these activities for the

organization's ideals to be sustained.

Furthermore, the Jak preneur program already has a good division of information -

PUSDATIN. As a result, the organization continues to struggle with documenting knowledge

and storing resources. A data bank system must be built so that these resources remain in the

organization, making it easier for employees to search for and learn from existing knowledge.

Finally, in terms of technology, the creation of the Jakpreneur website has already been a

success. However, there is still room for improvement so that the website can meet all of the

stakeholders' needs and facilitate learning interactions.

Readjust the Pergub (Governor’s Regulation)

The Governor Regulation No.2 of 2020, Governor Regulation (PERGUB) on the

Implementation of Integrated Entrepreneurship Development, governs the Jak Preneur

program. As long as it is ordered by higher laws and regulations or formed on authority,

PERGUB, or Governor Regulation, has binding legal force. Pergub No. 2 of 2020 governs

activities carried out in collaboration between the DKI Jakarta Provincial Government and

other stakeholders to develop potential skills and business independence.

With the beginning of the creation of the KM division in the management of the

PPUMKM Office, the organizational structure will change, causing the Pergub to change

indirectly. According to the analysis of stakeholder mapping in Chapter 1, it is critical that the

Head of Service and its members, as well as TGUPP, be consulted and informed about this

initiation change.

Gain Commitment

Gaining commitment in the organization especially in the government is crucial for

several reason such, alignment of organization goals, improved performance, engaged and

motivated workers, and will enhanced team work and collaboration. Employees and teams who

are dedicated to the organization are more likely to share knowledge, offer assistance, and

collaborate as a unit. This collaboration improves problem-solving, innovation, and team

performance. Some suggestion towards the organization’s commitment:

a. Leader & the Management must be open, committed, and aware of current trends.

b. Lader & the Management must listen to internal or external parties such as the business

actor's opinions, suggestions, input, or other criticism.

c. Leader & the Management must foster a supportive and optimistic work environment that

values, rewards, and understands one another.

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KM Road Map

Below is the figure of KM Road Map Initiative that can be implemented by the Dinas

PPUMKM in the Jak preneur program.

Figure 5 Proposed KM Road Map

CONCLUSION

Finally, this study investigated and analyzed various aspects of Knowledge Management

in order to shed light on its implementation in a public sector organization. We have delved

into the knowledge gaps, proposed framework, and solution with the implementation plan

throughout this thesis, revealing valuable insights into Knowledge Management. We have

provided a comprehensive understanding of Knowledge Management and its implications in

the Dinas PPUMKM by examining the knowledge gaps and needs of establishing a KM system

for the Jak preneur program. The proposed SECI and Jann House diagrams were also used to

describe the KM framework in the study. While this study significantly contributes to the

existing body of knowledge, there are still avenues for further exploration and investigation.

This final chapter aims to synthesize the main findings, discuss their broader implications, and

propose potential future research directions, inviting scholars and practitioners to delve deeper

into this fascinating field of study.

The thesis' proposed knowledge management implementation plan highlights several key

recommendations for improving organizational learning and maximizing organizational goals.

The main recommendations are to establish a KM division before implementing the KM

framework and delivering the roadmap. The author suggests that the organization establish the

KM Division within the internal organization before implementing the KM framework and

delivering the roadmap. Furthermore, a centralized knowledge repository will be established

to consolidate and organize information resources, a comprehensive training program will be

implemented to promote knowledge transfer and acquisition among employees, an integrated

system will be developed to encourage knowledge sharing behaviors, a culture of collaboration

and communication will be fostered through cross-functional teams and communities of

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practice, and technology will be leveraged. These recommendations are intended to foster

within the organization a knowledge-driven environment that facilitates the creation, capture,

and dissemination of valuable knowledge assets.

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