The promised benefits from implementing knowledge management (KM) attract an increasing number of organizations. However, many organizations, face several difficulties when designing a KM system or implementing its initiatives. These difficulties, along with some unsuccessful KM initiatives worry many organizations interested in the concept. This paper investigates the reasons for these difficulties and discusses the issues that need to be addressed to develop robust KM systems. It then introduces a systematic approach for addressing these issues at the early stages of designing a KM system. This approach was developed within the cross‐sectoral learning in the virtual enterprise (CLEVER) project and supports the definition of KM problems within a business context. The approach has been encapsulated into a prototype software system to make it easier to use. The paper describes in detail the operational level of the prototype. It also discusses the potential of the developed prototype, and concludes that it represents an innovative tool for improved KM.
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