Recent studies have shown that knowledge management holds a very important role in determining a company innovation, especially when it comes to their product development process. This study aims to design a business process that will combine both product development process and knowledge management for IT Industry as it is one of the industries with the highest innovation growth in Indonesia. This study will use risk management framework to identify, eliminate and minimize risk in designing the product development process. Analytical Hierarchy Process (AHP) and Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) will be used in to assess which knowledge management method is the suitable activity that can support knowledge conversion process for each step of product development process. At last, both product development process and knowledge management activities will be combined and mapped as one whole business process as an innovation process guideline for IT Industry in Indonesia.