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Abstract
E-business is not a new issue. Presence has encouraged the organization
changes to traditional virtual organization. However, according to the author,
this topic still has significant issues that should be explored as a way of approach
differ on this topic will give different results too. Results
different can be implemented for a variety of different situations,
according to results of the assessment team management. Organizations must consider the
making and tool knowledge and consider the two factors that are not
can be separated as an organizational infrastructure to maximize
performance of the organization. Knowledge management is a way to
increase the capability of organizations in the information for resource
improve efficiency and productivity. To be able to understand and explore the
more ways to help knowledge management organization virtual, author
collecting information from libraries, online databases, books,
and web pages. Next, in order to better describe the benefits -
benefits that can be achieved, threats, and challenges faced by organizations,
author uses a case study. The case will be used as
benchmark and support the theory, also for the situation that
Indeed, in the real world.

Keyword : Virtual Organisation, Infrastricture of organisation, Eficiency

1.Introduction
Internet has made products (goods and services) into larger virtual organizations to be
marketed by sellers and buyers. The products can be easily traded w orldw ide w ith no
boundary or limitation of geographical area. The trading process is w hat Pow er (2001,
p. 189) calls as selling mechanism. Buyers and sellers communicate via Internet
allow ing the products to be bought and sold over computer netw orks. The principle
concept is that the products are purchased and paid for over the Internet and
distributed by logistics carriers to the buyers’ addresses. That online buying, selling,
and paying is an integral part of e-busines.


2. The Advantages of E-business
According to Amor (2000, p. 13), the strengths of e-business depend on the strengths
on the Internet, which are the infrastructure can be expanded in the future, the
availability of access for 24 hours everyday and low cost as w ell. However what Amor
wants to show is that how Internet can change the topology of business. Amor (2000,
p. 14) reckons that there are seven advantages that can be obtained by the e-business
organizations (see Figure 3 ).
A dvantages of e-business
1. Global accessibility and sales reach . Businesses can expand their customer base globally
and even their product line.
2. Closer relationships. B2B sellers should be able to construct close relationship.
3. Free sam plers. Products can be sampled via the W eb quickly, easily, and free of charge.
4. Reduced costs. Businesses can minimize the costly production by dynamically adjusting
prices.
5. Media breaks. The Internet reduces the number of media breaks which are needed to
transfer information.
6. Time to market. Shorter time to market and faster response time to changing and
competitive market demands.
7. Customer loyalty. Improved customer loyalty and service through easier access to the
new est information and a never closing site.
Source: Amor, D ., 2000, ‘The E-business Revolution’, p. 14

3. Knowledge Management Implementation
Organizations should be concerned in understanding of knowledge utilization and
creation and consider the two inseparable factors as an organizational infrastructure
to maximize the organizational performance. According to D utrénit (2000, p. 35), the
process of know ledge creation is:

‘… the center of attention and issues about the m anagem ent of know ledge are
playing an increasingly im portant role in the explanation of the effectiveness
of this process’
Furthermore, the use of know ledge management facilitates the process of creation
and enhancement of know ledge for the development of strategic technological
capabilities.
According to the American Productivity and Q uality Center
(1996, available at: http://w w w .store.apqc.org/reports/Summary/know -mng.pdf),
knowledge management is a set of strategy to acquire the right know ledge to the right people at
the right time and help the individuals or groups to share and use the information into
action in a w ay to enhance organizational achievement. M oreover, know ledge
management is a complicated process that should be reinforced by a robust foundation
of enablers – strategy and leadership, culture, measurement, and technology. Each
enabler should be aligned to generate the know ledge process – procurement,
presentation, transfer, utilization, and removal (see Figure 4 ). To obtain know ledge,
organizations should be agile in balancing the know ledge management elements –
people (culture), processes (content), and technology. Abell and O xbrow (2001, p. 37)
reckon that those elements have formed a know ledge management philosophy – to
manage the know ledge balance w hich further determines an organization and its
relationship in the market.


4.The Advantages of Knowledge Management
The role of know ledge management offers a number of benefits for organizations in
developed or developing countries. Radding (1998, p. 61) identifies many substantial
benefits that know ledge management offers, including: prevention of know ledge loss;
strong decision-making; adaptability and flexibility; competitive advantage; asset
development; product development; customer oriented and; leverages investments in
human resource/capital .
Knowledge management advantages
1.Prevention of know ledge loss – enables an organization to retain critical expertise and
prevent critical know ledge loss resulting from retirement, dow nsizing, employee departures,
etc.
2.Improved decision making – decisions are made faster w ith greater quality and also can be
made at a low er level in the organization.
3.Adaptability and flexibility – staffs can w ork in cross-functional situations and the
organization improves employee morale.
4.Competitive advantage – enables the organizations to fully understand its customers,
prospects, market, and the competition, thereby enabling the identification of competitive
gaps and opportunities.
5.Asset development – improves the organization’s ability to capitalize on legal protection for
intellectual property.
6.Product improvement – value of products is increased in direct proportion to the degree and
quality of know ledge in the product.
7.Customer management – enables organizations to sharpen customer focus and service.
Increased customer know ledge expedites response to customer queries, suggestions, &
complaints. It also ensures the consistency and quality w hen servicing customers.
8.Leverages investments in human capital – organizations can better leverage their investment
in hiring and training w orkers such as the ability to share lessons learned, document
processes, the handling of exceptions, capture and transmit tacit know ledge, etc.
Source: Radding, 1998, Know ledge M anagem ent, p. 60-61
5. Information and Communications Technology (IC T )
The development of ICT has produced opportunities and challenges. According to Abell
and Oxbrow (2001, p. 52):
‘… the use of IC T enables virtual w orking that is alm ost akin to sitting around
the table together. But online w orking needs careful facilitating and
leadership. It requires new skills and m indsets, and w hile it allow s m ore
inclusion for som e it presents barriers for others. Paradoxically, collaborative
softw are enables people in one room to w ork creatively together by challenge
ideas, and vote for outcom es, anonym ously, thus allow ing the group to have a
frank discussion w ithout individuals feeling inhibited by their lack of
confidence or status.’
Early applications of technology offered the prospect of increased production and less
reliance on human. The integration of communications and information technology
introduces opportunities to operate in new markets, change w ays of w orking, deliver
different products, and maybe to develop business relationships w ith a variety of
suppliers. ICT enables flexibility, allow ing information to be exchanged across
geographical and time barriers. Virtual organizations, mobile w ork forces, and
innovative partnerships have all been diffused by ICT. ICT also brings new problems,




for example, technical directors and technical staff argue to utilize a compatible IT
platforms and softw are applications to enhance faster and cheaper communication.

6. Virtual Organizations
ICT has made a new form of business named virtual organizations. Skyrme (1999, p. 1)
has defined the virtual organization as the organization diffused geographically and
organizational w ork is distributed throughout electronic communications. M any smaller
organizations or even start-up companies are now concerning about the advantages of
becoming or maybe as a part of a virtual organization, w hich can give them the
benefits of the different resources of a large organizations w hile focusing on the
strength and agility of the small one. Furthermore, Skyrme also specifies the
advantages that virtual organizations offer. The advantages of virtual organizations
are: [1] provide access to a w ide a range of specific resources, [2] should enable to
present a united face to big corporate customers, [3] the organizations can keep
concentrated to operate on the niche skills, and [4] easiness to reshape and change
personnel based on the proposed task or project.

7. People, Process, and Technology
The three inseparable elements of know ledge management – technology, people, and
process – are playing an important role for the success of the virtual organizations.
First, the know ledge in technology should be able to produce many benefits to users
(easiness, practicality, functionality) and differentiate w ith other current products
competitively. Second, the know ledge in people, people in an organization is
considered as the most valuable asset because people act as the motivator to invent
innovative ideas and generate the w ork process. Third, the know ledge in process can
be illustrated as the structure – vertical or horizontal – of the organization, the w ay
the employees w ork together in an complex situation, and if the organization has a
flexible management then can be w ell adapted to the dynamic of changes, because no
matter w hat changes w ill apply.

8. The Success of Virtual Organizations
Today's business environment demands a new philosophy for accomplishing tasks. The
success of virtual organizations principally is in the hand of the staff (teams) that run
the job. M anagers should heavily motivate the teams to produce new ideas or process
to fasten the w ork. As technology w orkers continue to become un-tethered, often
w ithout w arning to the enterprise and its IT infrastructure, it is increasingly the
responsibility of the enterprise to provide the education and change management
necessary for the employee's success in a virtual environment. IT executives should
ensure that the appropriate education and competencies are developed among its core
staff to leverage the full potential of a successful virtual team (Ader, M ., 2003).

Successful virtual teams involve a strong combination of people, process, and
technology. For people to w ork seamlessly across boundaries, distance, and time,
collaboration tools and services to catalyze productivity must be readily available. IT
executives should evaluate tools from emerging professional services automation (PSA)
vendors, project management and collaboration players, as w ell as leading audio and
video streaming technology that can support the activities of a virtual team
(H aselkorn, M ., 1998).




9. Challenge and Solution in Knowledge Management
Although know ledge M anagement can become a good strategy in many organizations to
achieve competitive advantage in competing w ith others, it also presents significant
challenges to the organizations especially to managers and IT professionals. The
complexity in defining the most suitable know ledge management model, refining
information, choosing the most appropriate technology are the examples of issues that
face by organizations. H ow ever though the problems are a lot, it doesn’t mean all the
organizations face the same issues. The issue w ill depend on the organizations
themselves, w hat is the core business and how the organization runs the activities
(KM W orld, 2002).

10. Distributing Information
H ow to distribute and deliver the information is one of the issues w hich have impact
organization greatly. Spreading the information among w orkers in organization, to
other branches of organizations and collaborated organizations can determine the
faith of organization itself. Speed of distribution and availability of information are
the things that organizations try to sustain and achieve. Before considering a w ay of
distributing the information, organizations have to understand clearly first, w hat kind
of information those organizations have. According to Vice President of H ummingbird
Ltd., Peter Auditore (KM W orld, 2002), there are three types of information in an
organization, w hich are;
° Explicit Know ledge, know ledge that can be extracted from books,
documents, emails and databases. This is the easiest w ay to get and gather
know ledge in an organization.
° Embedded Knowledge, know ledge that found during running organization’s
task such as services and process. The know ledge can be achieved is a person
carries certain tasks in organization.
° Tacit Knowledge, undocumented know ledge. This kind of know ledge is
available inside the head of w orkers and can be spread among them via
mouth to mouth.

After understanding w hat kind of know ledge an organization has, then managers and
IT professional have to think the scope of information distribution. There are tw o
scope of information distribution, w hich are distribution of inform ation am ong
w orkers in an organization and distribution of inform ation to the virtual organization
w orldw ide (Intranet Journal, 2003).

11. Distribution of Information among W orkers in an Organization(focus on people)
Sharing information among w orkers in an organization isn’t a new problem in
know ledge management issue how ever it is still exist. O ne of the w ays that used
now adays is Intranet technology. Research has already demonstrated that Intranet
technology has show ed significant increase in efficiency and productivity of an
organization. And also there is significant correlation betw een intranet and job
satisfaction (Intranet Journal, 2003).

Intranet technology can bring a lot of benefit in distributing know ledge management.
O f course cost of the technology is one of the benefits how ever it’s not the only
advantage that organization seeks. Intranet can also benefit w orker in many w ays such
as a tool of communication not only betw een w orkers and organization but also among
the w orkers. Intranet technology allow s w orkers to access know ledge from
organization nevertheless, not only has that Intranet still had other advantages but also help
workers to communicate each other especially in distributing
tacit know ledge w hich is very hard to be documented by organization (Intranet
Journal, 2003).

Conclusion

E-business is an interesting w ay for business to earn more profit and efficiency.
Though there are a lot of benefit that can be gained from e-business, it’s a w ise
decision to look at the negative sides such as threats, obstacles etc. In order to gain
the benefits, companies or organizations that w ish to implement Internet as part of
their businesses activities have to look both the advantages and threats or obstacles
that have to be faced.

Know ledge management is a method of the creation, capture, organization, access
and use of organizations intellectual capital on consumers, markets, goods (product &
services), and internal processes (Abell and O xbrow , 2001, p. 33). It is a pow erful w ay
to help an organization or company to attain competitive advantages in competing
w ith other companies. The implementation of know ledge management has successfully
encouraged the continuance of many organizations to achieve goals. The
characteristics of successful organizations that implement know ledge management are
conservatism in financing, sensitivity to the environment, sense of cohesion and
company identity among staffs and, tolerance of new ideas, circumstances, and
changes.

Though know ledge management can bring a lot of benefit, at the same time, it also
brings problems. The problems depend on the organizations themselves, w hat is the
core business and how the organization runs the activities. Basically, the problems of
using know ledge management that occur in an organization are distributing
information; classify information and w rong perceptions of know ledge management.


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