According to Sher & Lee (2004, pp. 3-4) nain functions of KM aided by IT are as follows.

The first function of KM - knowledge creation - has traditionally been treated as a black box. However, more recently a knowledge spiral framework has been proposed as having more descriptive value in explaining the process of socialization, articulation, combination, and internalization. In this framework, knowledge creation incorporates organizational and managerial routines and it is closely related to innovation.

For example, KM is regarded as central to: product and process innovation and improvement, the execution of decision-making, and organizational adaptation and renewal. In an environment of rapid change, KM can significantly reduce the response time for experimenting with and implementing new techniques, especially as it can be aided by IT (Lesser & Prusak, 2001). Thus, knowledge creation (or innovation) can enhance dynamic capabilities, rendering firms more flexible and responsive in an unpredictable environment.

The second function of KM, accumulating large amounts of knowledge, often results in increased dependence on the infrastructure. There are three patterns of knowledge flow:
1. collecting new knowledge - this intensifies its vertical flow;
2. codifying knowledge requiring both horizontal and vertical flows; and
3. combining new and old knowledge, mainly affecting horizontal flows.

In addition, uncertainties about the relevance of new knowledge are resolved via vertical flows, a process which rapidly exposes new knowledge to a wider range of remote and diverse knowledge and thereby facilitates faster, more comprehensive discovery of its relevance. It is impossible to manage the requirements for these knowledge flows unless IT infrastructure is supportive.

The third function of KM - knowledge sharing - allows for diffusion of endogenous skills, experience, and knowledge throughout the organization. Knowledge sharing provides employees encountering similar decisions short-cuts to solutions and thus enhances learning, enabling employees to respond to environmental change at an increased pace with less cost.