2. Knowledge Codification
Data and information need to be collected and analyzed in order to turn them into useful knowledge. This is the stage where tacit knowledge is converted into explicit knowledge and is very critical to the success of the other two stages - application and transfer. Without documenting and codifying tacit knowledge, its transfer for the purposes of learning and utilization, both internally and externally, will be difficult to achieve.
Furthermore, legal protection of these valuable knowledge assets can only be done if the knowledge has been codified. For examples, patent applications require the complete disclosures of the inventions and trade secrets require the demonstration of safe-keeping of documented information. The legal rights come with IP protection offers the company a distinct advantage which can be used to derive revenues from IP licensing or exclusive rights to commercialize.