People assume knowledge management will make the job of service and support easier: “they’re going to take the knowledge out of my head and outsource my job to someone with less skill and training.” But in fact, as the routine and annoying work gets automated, as you point out, the job actually gets harder. Effective self-service adjusts the case mix away from known issues, towards new issues, which require more time and skill. New issues are also the ones that should be captured in a knowledge base, so knowledge becomes more tightly interwoven with the job.

It’s great for most staff. They have time to stretch their minds, they’re doing less repetitive work, and they can help one hundred people with one call rather than just one. But managers need to be aware that call times will go up, (apparent) productivity will go down, and the skills required of their staff increase.

On a related note, here’s the Value-Irritant matrix, a tool for thinking about the “bifurcated approaches” you mention: http://tinyurl.com/8mdq3ej (From Price and Jaffe, The Best Service is No Service)