A functioning KMS follows a cycle that consists of six steps . The reason the system is cyclical is that knowledge is dynamically refined over time.

The knowledge in an effective KMS is never finalized because the environment changes over time and knowledge must be updated to reflect these changes.

The cycle works as follows:

1. Create knowledge: Knowledge is created as people determine new ways of doing things or develop know-how. Sometimes external knowledge is brought in.

2. Capture knowledge: New knowledge must be identified as valuable and be represented in a reasonable way.

3. Refine knowledge: New knowledge must be placed in context so that it is actionable. This is where tacit qualities (human insights) must be captured along with explicit facts.

4. Store knowledge: Useful knowledge must then be stored in a reasonable format in a knowledge repository so that others in the organization can access it.

5. Manage knowledge: Like a library, the knowledge must be kept current. It must be reviewed regularly to verify that it is relevant and accurate.

6. Disseminate knowledge: Knowledge must be made available in a useful format to anyone in the organization who needs it, anywhere and anytime