Knowledge management consists of well-designed processes that facilitate the application and development of organizational knowledge, in order to create value and to increase or sustain their competitive advantage. KM processes usually comprised of at least 4 stages: knowledge generation, knowledge codification, knowledge application, and knowledge transfer.
KM is a means of business resources optimization which impacts on costs but it is not a tool to directly reduce costs. KM allows companies to recognize and manage a system of core competencies in order to maximize business opportunities and minimize the risk of losing business opportunities.