A working definition of knowledge management is that it is the process of creating value from an organization's intangible assets. Simply put, knowledge management deals with how to best leverage knowledge internally and externally. Most people agree that knowledge management entails three main types of capital: human capital, structural capital, and customer capital. Human capital is primarily the brainpower of the employees. Structural capital refers to "intangibles" that can't easily be brought home with an employee, such as intellectual property rights. Customer capital, also referred to as social or relationship capital, is knowledge that is learned from the customers and fed back into the organization. All three types of capital are necessary to build "organizational intelligence" and contribute towards building a "learning organization."
Knowledge management usually has four main processes: knowledge identification and capture, knowledge sharing, knowledge application, and knowledge creation. Important knowledge in the organization is identified and captured. Then, the knowledge is shared and applied in particular situations. Finally, it becomes internalized and, it is hoped, new knowledge spawns from this application and sharing process. Knowledge management usually has three main components: process, people, and technology. Process refers to developing ways to embed knowledge into the daily working activities of the employees. People deals with how best to build and nurture a knowledge sharing culture in the organization. Technology deals with creating a unified knowledge network that enables the sharing of knowledge to easily take place.