The strategies of revenue services institutions (RSIs) are integral to a country’s overall development. Gcabo and Robinson (2007:358) argue that ‘as the developing world becomes more deregulated and integrated’, it is important that ‘tax strategies and/or tax policies be appropriately designed and continuously monitored’. This article builds on the argument, accentuating the need for continuous improvement based on sound knowledge management (KM) practices. An organisation gains a competitive edge through what it knows, how it uses what it knows, how fast it can know something new, and how well it uses this knowledge to continuously improve itself for the purpose of its value proposition to clients (Carlucci 2016; Davenport & Prusak 1998). In order to achieve business excellence, organisations have to continue to innovate and improve their practices.

Continuous improvement requires formal structures, methods and processes to manage its most valued intangible asset, that is, knowledge. Knowledge management is necessary for sustainable value creation (Smith, McKeen & Jenkin 2009:8). While KM takes centre stage in highly innovative organisations, many organisations have not adopted a holistic KM approach throughout all their business units (Esterhuizen 2012; Langen 2000). Discrepancies within a single business unit may cause KM maturity delays (Ehms 2001; Langen 2000). Organisations such as RSIs have many business units, each striving towards optimal customer service delivery.

The motivation for this study was to gain a deeper understanding of KM maturity within a RSI in Africa in order to inform its future information and communications technology (ICT) strategy planning. Based on this motivation, the perceived KM maturity levels of the Tax Audit Business Unit, specifically of the assessment of income tax for both individual and company entities, were identified as the research gap. The ethical guidelines of the University of Johannesburg suggested that all case studies employ the practice of anonymising empirical findings; in this study the institution is referred to as ‘the RSI’.

In order to address the research problem, this study aimed to develop a suitable framework that would assist with mapping of the perceived KM maturity levels of the RSI’s individual and company taxpayer entities. In order to develop the framework, these four research objectives applied:

Since this was the first study of this nature at the RSI, an assessment of the maturity of KM could take many forms. This study focused its investigation on a single case, simplified by following a knowledge management maturity model (KMMM) adopted for this study. Generally, the levels of KMMMs give an indication of how well the KM function is organised. Only if KM is well organised, can it truly contribute to continuous improvement, and enhance organisational performance and achieve business excellence (Carlucci 2016; Rašula 2012).

This article begins by providing the theoretical evidence used to construct the conceptual KM framework. The research method, with an explanation of the case study research design, precedes the analysis and discussion of the research findings of KM maturity. The article concludes with recommendations on adopting the conceptual KM framework. The value of the study is towards strategic and tactical levels with the intention to address KM maturity shortcomings.

Defining the concept of knowledge management will create better understanding in the broader context of management and economics sciences. Probst (2005:22) defines knowledge as ‘the entirety of proficiency and skills that individuals use for problem solving’. That means all theoretical skills, as well as rules on how to act. Knowledge uses data and information, but is always connected to individuals (Probst 2005). Knowledge is developed from individuals and represents the expectations about cause-and-effect relations (Probst 2005).

In business management, Drucker (1988) accentuates the fact that without knowledge, organisations cannot add desired value in their endeavour to satisfy customers. Drucker (1988) argues:

Given these definitions of knowledge, business management is defective without knowledge management.

KM applies in business as much as in government and non-profit organisations. Some of the known benefits of KM in local government found by Ezra and Smith (2009), Gaffoor and Cloete (2010) include:

Although these benefits give KM its leverage, KM activities have to be measured in order to make them more visible and positioned at strategic level (Langen 2000:12). The barriers of KM are noticeable especially in the public sector. Paulin and Suneson (2012:81) define knowledge barriers in the context of knowledge sharing and transfer, distinguishing the thin line between knowledge transfer and sharing. A knowledge barrier is a failure in knowledge transfer, and consequentially the barrier becomes interchangeably the failure to transfer knowledge (Paulin & Suneson 2012:88).

Barriers of KM are broadly categorised as personal and organisational barriers (Bernuy 2012; Probst 2005). Examples of these barriers are lack of awareness, poor leadership, lack of top management support, lack of motivation, lack of time and effort, no incentives, poor planning, and poor perception of value (BenMoussa 2009:902–903). Implementing KM in the public sector is generally more difficult than in the private sector, owing to existing barriers and the complexity of stakeholder requirements (McAdam & Reid 2000; United Nations ECLAC 2013). The public sector goals aim at improving quality of life of citizens, economic growth, and environmental development, more than on profits. This dilemma requires KM experts to help public sector managers and leaders to have a paradigm shift in addressing knowledge gaps and leveraging KM for better outcomes in an integrated manner across all spheres of public sector entities. A specific focus is required in removing barriers to ensure better knowledge flows across, for instance, the value chain of a RSI. The theory of mapping KM to measure maturity of knowledge practices in an organisation applies.

An empirical study followed on the literature study of the role of KM in organisational learning for continuous improvement. The researchers considered how to measure maturity in different domains and then identified KM maturity indicators (KMIs) based on their function as KM enablers. The approach was deductive and used descriptive statistics. The research findings were utilised in a quantitative research approach (Figure 2).

The research philosophy was positivism, focusing on cause and effect, which assisted the researcher to make deductions. Characterised by cause-and-effect epistemology, the study singled out one business unit in the RSI value chain as opposed to the entire organisation. In terms of this study’s reliability and validity, it is important to note that the study did not consider all aspects of all existing KMMMs. Instead, the relevant levels and indicators were pertinently covered. The study did not include the elements of strategy and processes of the entire organisation, it only covered limited scope focusing on KMIs that would be most relevant to the selected business unit function of the RSI (Figure 3).

Figure 3 illustrates the RSI’s high-level value chain in order to position this study’s unit of observation in terms of its participation as a business unit with the role of assessment of tax, namely individual and company audits. Sound judgment is required based on facts and interpretation of the country’s tax law, which makes this business unit ideal for maturity mapping.

The study gives revenue services institutions insights in how to innovate and sustain their value creation to their stakeholders. Based on empirical findings we state the desired activities for adoption of a knowledge management framework that will help achieve continuous improvement (at the South African revenue services institution, with their permission to publish the results). The ethics committee permit number is UJFOM_IKM2016_11_809571098.

Findings are consolidated to map KM maturity by consensus comparison across the five levels of the KMMM, adopted from Kulkarni (2007), summarised in this article in terms of the value of knowledge, lessons learned, leadership role and trust. The five levels are:

Findings in Figure 4 illustrate that the value of knowledge is well understood and knowledge assets as infrastructure are well identified. At the lowest level of the capability maturity scale, consensus is high at 93%. However, a reverse pattern is observed as consensus drops sharply at Levels 2, 3 and 4 by an average of 30%, and there is a further drop by 20.1% at Level 5. It is noted that at the lowest level of capability maturity scale, 6.9% of respondents did not concur; this difference could be attributed to new employees or to lower levels of education. This picture depicts that the value of knowledge is well understood. Less effort is required in communication; it may only be required to sustain it at enterprise level.

From juxtaposing Levels 2, 3 and 4, one can see a pattern: that there are higher levels of disagreement indicating that there is no consistency and that is an indication that different roles perceive these levels differently and, therefore, leadership must take responsibility in inculcating a culture of knowledge sharing for better return on investment in intellectual capital. Leveraged intellectual capital is the result of shared lessons learned. However, if knowledge is not shared, then an organisation is poorly positioned for continuous improvement.

Figure 5 illustrates the perceived value of capturing lessons learned and sharing these lessons to ensure continuous improvement. Juxtaposing the value of knowledge and lessons learned, one can deduce that while the value of knowledge is well perceived, the level of consensus drops as the actual flow of knowledge within the business unit is measured. Also, the level of consensus on Levels 2, 3 and 4 seems to flatten indicating that progress is made across levels, but that the contrasting view is significant enough to warrant interventions. Figure 5 presents evidence that there is effort in KM implementation, although one cannot generalise it to the entire organisation or the public sector as a whole. Findings confirm the theory of barriers of KM within the public sector (e.g. see Appendix 2, the chi-square test of homogeneity).

Findings in Figure 6 indicate the perceived role of leadership in creating an enabling environment for knowledge sharing is critical. The only levels with consensus are Levels 1 and 2; the rest indicate the perception that leadership is a barrier to knowledge sharing.

In maturity mapping, the level of consensus indicates the level of maturity. In summary, the respondents’ level of consensus about the value of knowledge and lessons learned, is above 70% only with respect to the first level of KM maturity. This indicates that KM exists despite the barriers that persist. The pattern observed is a drop in level of consensus as the maturity levels move from Level 2 to Level 5. Figure 7 shows that while the value of knowledge is well perceived, the sharing of knowledge is not at a desired level and leadership needs to assume a primary stance, leading the process in order to enable knowledge sharing for continuous improvement.

The study developed a conceptual KM framework for the RSI, based on the research findings (Figure 8).

Mapping KM objectives both at strategic and tactical levels will ensure that all KM projects contribute towards organisation strategic outcomes. The same outcome may be achieved at tactical level by cascading KM objectives to specific operational objectives. Finally, analysis and interpretation of the research findings helped with identifying some desired activities for the adoption of the proposed framework, mentioned in the conclusion of this article.

Given that only a few business units were evaluated in the case institution, the results in this study are limited in generalisability with RSIs. The RSI is on the baseline of Level 3, that is, the Enabled/Practised level of KM maturity. While knowledge is valued at the RSI, KM is partially practised and enabled. This study indicates specific action steps that are required in order to reach the desired levels of maturity that lead to continuous improvement. The areas for improvement emerged, namely training, leadership role, trust, reward, and recognition, as well as embedding KM by implementing processes, policies and procedures. The recommendation is adoption of the conceptual KM framework presented in Figure 8, to be used as pilot, and, if successful, adopted at enterprise wide level. The recommendation builds on SIM principles, which are public sector specific:

The desired action steps include, firstly, develop KM measures and include them on performance scorecard; secondly, establish baseline turnaround times for specific individuals and map to service levels and turnaround times; thirdly, roll out a training plan for the business unit and map outcomes to service turnaround times; lastly, develop a KM strategy and initiate a KM implementation project. In this regard, the critical success factors that emerged from this study include:

The lesson learned from this study is the importance of using a model that is appropriate, specifically for RSIs. Suggestions for future studies require cognisance that validating or disproving assumptions of a benefit such as cost saving may help in gaining KM maturity levels at a specific point in time but it is not necessarily a true representation of facts representing behaviour of the institution over a long period of time. A change in one of the variables used during assessment could change the outcome over a shorter period; one such example is a change in leadership or leadership style. This could shift levels of consensus positively or negatively over a short period in time. In conclusion, KM maturity is necessary for continuous improvement, which is a precondition of business excellence.