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PSM Assignment Table of Contents: Executive Summary Introduction Use of Technology and Knowledge Management in Ernst & Young Conclusion

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And finally. It consists of three main parts which start from introduction which includes general information about the technologies. importance of it. where more consistent information about how different kinds of technologies supporting and bringing benefits to daily operation of E&Y is explained. the last section is about how KM and its use of technology can be applied to E&Y in facilitating its service processes to deliver customer and business value.Executive Summary: This report provides information about the meaning of technology and how the use of technologies changes the characteristics of professional services business. The next section is about the use of technology and KM used in E&Y. In this report. 2 . It also analyses the concept „Knowledge Management‟. levels and its application to professional service firms. Ernst & Young is the chosen organization.

As market pressures increase. Thus. knowledge is a capacity to act. As a result. and sharing of insights and experiences.Introduction: For professional service firms. it is worth it to manage that asset and to establish and manage systematically the acquisition. a shortage of high-potential professional service providers has increased the „war for talent‟ in which firms compete in employing the most talented professionals. Indeed consultants are seen as the earliest and most successful adopters of KM. The main assets are intellectual. If knowledge is the „product‟ or the dominant ingredient. and the learning organization. and their exploitation is only restricted by the capacity and readiness of humans to do so. These situations are exacerbated by the decrease in lifelong loyalty. 3 . The core business of these firms is to provide highly developed knowledge-based services grounded on the existence of intellectual assets. there has been a flood of interest in intellectual capital. The capacity to manage human intellect and to convert it into useful products and services is fast becoming the critical executive skill of the era. and the departure and retirement of professionals. a traditional value within professional groups. innovation. Intellectual assets exist in various forms. but astonishingly little attention has been given to managing professional intellect. and they have to seek new ways to leverage their professional intellect. not physical. so does the demand for securing and exploiting knowledge for the firm. In addition. it makes sense that managing those assets effectively is now looked at as a vital aspect of maintaining competitiveness. It is therefore not surprising that the emergence of technologyenabled KM has attracted much attention from those firms. creativity. synthesis. Knowledge can be used to take action and to serve the client.

E&Y‟s success in this field stems from the commitment of their people. capability). and technology. Data is a material and a numerical value which has neither a meaning nor the context in itself (amount of sales). such as standard and materials (report. Its focus is on the management of change. plans and work papers. processes. E&Y‟s employees participate in knowledge sharing networks. quality service time after time. Knowledge is the information to produce value. They continuously improve their infrastructure. processed. As we transition from an era of information scarcity to information surplus. practical service for the customers. It evolved from the need for advancing beyond the failing paradigm of Information Technology Management that accounts for 70%-80% system failures. Information means that data is arranged. from their leaders who address the importance of managing knowledge. manual). choices. uncertainty. there is need for re-focusing on strategic execution. methodologies. and performance. 4 . and given the significance with an intention and the purpose (amount of sales by product). In addition to opportunities for global collaboration. knowledge and wisdom. there is need for re-focusing on human sensemaking processes underlying decisions. to their people worldwide who leverage knowledge to support productive. They have access to the business news. data. As 'IT' becomes more of a commodity and endowed with more complex 'potential' capabilities. from any location in the world. By using globally-consistent knowledge resources and technology. so staff can find one another and exchange ideas easily. incorporating new technology such as internal social media. and intelligence they need to understand their clients and their businesses so they can deliver the most efficient. E&Y professionals can effectively team with their colleagues around the world to work on client engagements.Use of Technology and Knowledge Management in Ernst & Young: E&Y‟s knowledge sharing environment and the resources it offers provide themselves with a competitive edge. and complexity. benchmarks. KM is a new branch of management for achieving breakthrough business performance through the synergy of people. There are four main kinds of knowledge. E&Y‟s knowledge infrastructure allows professionals to leverage knowledge that is accessible both online and offline. analysis. Wisdom is a success pattern of action and philosophy which gives the right decision (experience. information. create thought leadership and are rewarded for sharing what they know.

most of which were discussions in networks and focus groups. and they were already the primary tool for external knowledge searches. As with the knowledge architecture. intuition. policy manuals. storytelling. not technology. Altogether. Individuals with tacit knowledge are usually considered to be experts within their organizations and frequently sought out for guidance and input. frequently in words and numbers. Now. systematic manner. the firm wanted consultants to focus on content rather than applications. and a few others. Lotus Notes had been selected as the primary technological platform for capturing and disseminating internal knowledge. but E&Y technologists at the Center for Business Technology were exploring the possibility of using Web-based technologies for knowledge management in the future. insight. These two approaches are characterized as “tacit knowledge” approach and the “explicit knowledge” approach. However. E&Y was spending 5 . Explicit knowledge can be more easily attained in comparison to tacit knowledge and is often expressed or documented in a formal. Examples include Management Directives. E&Y knowledge managers believe that knowledge primarily resides in people. and knowledge of organizational values. Executive Orders. E&Y had also made major investments in technology infrastructure that were not undertaken only for purposes of KM. The CBK maintained a Notes database of key documents. the scope and geographical distribution of the E&Y knowledge base and its users meant that technology had to be used as an enabler wherever possible. by 1996 it was being accessed over 16. and reference guides. Tacit knowledge can be attained through dialogue. Notes would continue to be the preferred internal platform in the short run. job shadowing. Approximately 12 to 15 applications would eventually support KM.000 times a month. but certainly benefited that cause. including Notes. however. the Web.There are two fundamental different approaches to identifying and managing knowledge in organizations. It usually is rooted in an individual's experiences. the skill database. By early 1996 there were already 2000 different Notes databases. judgment. E&Y had allowed multiple technologies to proliferate in the early days of KM. and sharing of best practices and lessons learned but it‟s not easily transferred. There were between 200 and 300 local applications and databases.

With the extension of the common technology platform around the entire U. A key goal was commonality of hardware and software. a key focus was putting knowledge. significant challenges remained. and had already been used on several client engagements. the buy-in to KM had been good in general. It adopted common operating system. consultants were now evaluated in part on their contributions to and use of knowledge. word processing. While substantial progress had been made in E&Y‟s approaches to KM. Embedding knowledge in technology was an ongoing issue. practice. These standards meant that programs and documents could be exchanged easily around the firm. and e-mail software at the same time.6% of its consulting practice revenues on knowledge management and technology. many industry and business process models for data and activity flows had been put into a form that ASEoriented engagements could employ. In terms of E&Y consulting practitioners. Substantial progress had already been made on the ASE. There were also issues remaining in terms of the culture for KM and use. E&Y had abandoned its support for Apple Macintosh computers and moved to an all-PC standard in 1995. models. and high levels of resources were being directed at KM. The E&Y consulting culture was traditionally based on simplicity and experience rather than a conceptual orientation. The ASE was how E&Y consultants would deliver many of their services in the future. then. Senior management support for knowledge as a key competitive advantage was high. One key means for changing the culture was embedding knowledge orientation into the firm‟s performance evaluation process. One key question among E&Y knowledge managers. with the technology options changing rapidly and the support requirements growing with increased use. spreadsheet. there were many consultants who had entered the firm and prospered under the old model and found it difficult to aggressively pursue structured knowledge in systems and documents. This was also a difficult adaptation for less conceptually-oriented consultants. was how rapidly to proceed in trying to change the receptiveness to a strong knowledge orientation. 6 . but there were still weak spots. while the culture was changing. It was particularly difficult to use technology to support some types of consulting knowledge.S. tools and techniques into the Accelerated Solutions Environment. and the new approach was to provide more background knowledge to allow consultants to improvise an approach to suit the particular client situation. The old culture had also placed a strong emphasis on highly structured methodologies.

While John Peetz. Still. they felt that they were still in the early stages of their efforts. In early 1996 the level of faith was quite high.S. 7 . for example. The only thing of which they were certain was that there would still be many changes and challenges that they would have to face in the future. created a "dashboard" assessing such topics as value delivered. the U. thought leadership. as in virtually all organizations adopting KM.S. and a good networking environment. reusable content created. The perception that KM led to increased performance was undoubtedly aided by E&Y‟s recent performance. consulting practice‟s revenues in 1995 were up by 44%. was assessing its progress and whether the resources devoted to it were justified. and the growing number of E&Y knowledge managers were pleased with the firm‟s progress thus far. For each of the firm‟s knowledge networks Ralph Poole. which surpassed both the FS‟97 targets and all other "Big Six" consulting practices in the U. the CBK director. presence of subject matter expertise. The CBK in particular had made numerous attempts to measure its own effectiveness and that of KM in general. the number of telephone and computer-based requests for its services. Ralph Poole.Another challenge at E&Y. Poole and other E&Y knowledge managers felt that it was impossible to fully justify KM investments and that some level of faith was required. It assessed. and tried to track sales or engagement wins in which knowledge use had been a critical factor. and there was much unreliable evidence of knowledge impact.

Although practice professionals are 'encouraged' to post relevant project documents to the KM system once a project is complete. there should be an 'arbiter of information' . E&Y has tried to maintain a dedicated KM staff.Conclusion: Much of the difficulty to date has been because professional services firms have focused on KM systems as the answer. And as mentioned.While experienced practice professionals are typically generating the content. This provides for little real incentive on the part of the practice professional. E&Y is often left to inexperienced business analysts or librarians. as well as business analysts and librarians to organize and update all of the documents.Typically. for each and every practice professional. there is some type of online depository so that project members can share files.In order to sustain the KM effort.Again. Process: Dedicated KM teams . This leads to improper categorization and a loss of quality information. in many cases the end deliverables are not 8 . and keeping the KM systems up-to-date and useful has been an enormous challenge. the KM database might be separate from project repositories . Information Organization . those that are the end deliverables. These can typically be broken into people. KM systems are meant to organize and share knowledge within a firm. but more often than not. each of these explains the root causes of why KM systems are not working: People: Focus on billable hours .In order to maximize the bottom line. practice professionals' performance goals are rarely tied to KM. process & technology. it is insightful to break down the elements of a knowledge sharing culture. these same practice professionals are reassigned to another project immediately or shortly thereafter. KM not tied to performance . E&Y. Typically. E&Y has a laser-sharp focus on billable hours. Technology: Multiple file repositories .it might only include a subset of all project files. their scope has become too large to manage. more often than not. This staff typically consists of IT personnel to maintain the systems. while KM is encouraged. for each project in E&Y.someone that decides what is important or not. Further.

9 .which is cost prohibitive from generating a real KM. but also creates a vastly incomplete 'KM system'. E&Y deployed Lotus Notes . E&Y can often spend millions of dollars annually on Lotus Notes maintenance and dedicated staff . the system has become burdensome and expensive. this not only creates multiple databases and systems.Through the early and mid-nineties. In the end.a comprehensive e-mail and knowledge management platform. High cost of legacy systems. However. over time. All of the above challenges have impeded the development of a true knowledge sharing culture within E&Y.even uploaded. .AsiaSalary. KMWorld.Malaysia. Ernst & Young | [ONLINE] Available at:http://www. 2011. 2011.AsiaSalary. [Accessed 13 June 2011]. [ONLINE] Available at:http://company. Knowledge Management Resource Center.kmworld. 9. Ernst & Young Auditing | 2011. Will Ernst & Young Survive The Lehman Fiasco?.com/ernstyoung-auditing/. Ernst & Young Malaysia | GRADMalaysia.eoy. Knowledge Management Resource [Accessed 13 June 2011] 3.gradmalaysia. [Accessed 13 June 2011] the editors of KMWorld magazine . Ernst & Young Auditing | Company. Ernst & Young Malaysia | GRADMalaysia.References: 1.from the editors of KMWorld magazine . 2011. Ernst & Young | LinkedIn. [Accessed 13 June 2011] Knowledge. [ONLINE] Available at:http://www. [Accessed 13 June 2011] 2. 2011. [Accessed 13 June 2011] [ONLINE] Available at: http://www.asiasalary. KMICe2010:: Knowledge Management International Conference 2010 :: Universiti Utara Malaysia. [Accessed 13 June 2011].kmresource. [ONLINE] Available at: http://www. [ONLINE] Available at:http://www. [Accessed 13 June 2011] 6. [ONLINE] Available at:http://www. Will Ernst & Young Survive The Lehman Fiasco?. Ernst & Young . [ONLINE] Available at: http://www. Ernst & Young .com 2011. 2011. [Accessed 13 June 2011] [ONLINE] Available at:http://www. KMICe2010:: Knowledge Management International Conference 2010 :: Universiti Utara 10 .

Ernst & Young Global Careers.ftl?lang=en. Ernst & Young Global Careers. [ONLINE] Available at: [Accessed 13 June 2011].10. 2011. 11 .