Knowledge Management in the Cloud — Benefits and Risks

Working with a knowledge management solution is especially important for subscription companies that must closely coordinate marketing, product development, finance and customer support. The recurring value and customer relationships subscription companies must support demand a quick and low-cost method of sharing and acting on information.

Knowledge management is defined as, “the process of capturing, distributing, and effectively using knowledge.” We find that it is essential for all businesses to have information about its products, hierarchical structure and the way tasks are carried out to support business growth. This knowledge then needs to be effectively managed and reproduced according to the requirements of a business.

Knowledge management helps a company identify their mission and objectives, as well as manage the day-to-day information sharing essential to business success. Knowledge management is also able to enhance the work environment by breaking down silos and enabling different people to work together to achieve mutual goals.

Below, we will aim to present both the benefits and risks of knowledge management in the cloud. But first, let us take a closer look at knowledge management solutions available today.

Types of Knowledge Management Solutions

There are two kinds of software solutions for creating digital knowledge bases: local solutions and cloud solutions. Local solutions require the establishment of a local server computer which houses the knowledge database of the organization. This is excellent for a large business, but not suitable for most companies due to the high initial costs required to set up the expensive hardware.

For those companies that cannot accommodate a local solution, cloud solutions can provide companies with cheaper alternatives without investing in costly servers and staff to maintain them. Salesforce and ProProfs are powerful cloud knowledge management solutions that are quickly capturing market share around the world.

The Benefits

There are many benefits of cloud-hosted knowledge management systems. For companies that sell subscriptions online, knowledge management is particularly helpful in the following areas.

Reduction of costs

All businesses are trying to streamline their processes and reduce internal operating costs. Cloud-based solutions are able to significantly reduce the capital as well as operating costs for a company. These reduced costs then allow companies to invest in the substantial customer acquisition costs associated with subscription business.

Better decision making

Decision making is improved with the use of customized knowledge base solutions. Web-based knowledge bases are always updated and allow a better flow of information between different company departments and important decision makers. This improved information flow provides a more complete picture for decision makers and plays a significant part in making the business a success.

Learn how APIs connect teams and tools to align your subscription business

Ease of access

The problem with local databases is that they can only be accessed from a fixed set of network platforms. On the other hand, cloud-based solutions allow employees to access the information from anywhere. This means they can work on urgent requests while accessing information from their homes or from any other remote location.

Removing redundancy

A cloud database stores all the files in a systematic manner with version control. It is almost impossible to duplicate information or content which is already placed on the database. This removes redundancy issues when adding to the database and also ensures that information elements are streamlined. Employees can spend time being productive rather than sorting through redundant files. While this benefit seems to only apply to internal processes, it will greatly improve customer experience to have a more efficient team. Improved customer experience means increasing recurring revenue.

Quick communication

Cloud knowledge management solutions allow for quick communication between the different employees of a business. Getting information in real time means not wasting effort on tasks that are no longer relevant or required in light of any new information. With a knowledge management system in place, all employees are able to share useful tips with each other, which, in turn, increases productivity and your ability to deliver superior customer experiences.

The Risks

There are also some serious threats that are involved when working with cloud-based knowledge management systems. Though many of these risks exist for any business, moving important business data to the cloud should always be weighed against these most pressing risks.

Cloud security

Whenever you are using web-based applications, the security of cloud networks is the most significant risk. Local servers are often separated from the internet and offer complete security from external attacks. However, it is impossible to totally isolate web-based knowledge databases, so there is always an increased risk of a security breach when using these services.

Diminished role of IT professionals

Outsourcing knowledge management reduces reliance on internal development resources. But there is a risk of getting rid of brilliant computer programmers and network experts. The loss of exceptional talent can hurt a business in the long run and decrease the morale of the remaining IT employees who remain after the establishment of cloud-based computing services. If the business will support it, retaining that talent to focus on customer-oriented initiatives will bring a much more valuable return on investment.

Legal complications

Companies that use cloud knowledge management may be subject to legal compliance, but they often fail to look into this matter. Government and industry standards such as HIPAA and PCI-DSS, as well as stringent EU regulations, influence how businesses use customer data. Companies need to ensure that they understand their legal obligations and are in full compliance.


The benefits and risks of cloud-based knowledge management should be considered carefully in terms of the benefit to a business. For a subscription company, that means weighing the risks against those benefits that best enable it to deliver valuable customer experiences.

Will the dividends of easy access, quick communication, reduced costs, better decisions and diminished redundancy outweigh the risks of moving company data to the cloud? Are those risks similar to the risks any business already faces? No matter the solution, though, a streamlined approach to company knowledge management will improve internal functions, reduce costs and increase recurring revenue.

Sameer Bhatia is founder & CEO of ProProfs, a leading provider of online learning tools for building, testing, and applying knowledge. He has a Master’s degree in Computer Science from the University of Southern California (USC) and is an ed-tech industry veteran. You can find him on Google+ and Twitter.

Wasting time manually coordinating your business tools? Align your subscription business with APIs