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Knowledge Management in Consulting Firms

• Efficiency and effectiveness of work done should be
assured for the client when a consultant is hired.
• Strategic focus and line of work can influence this ; an
IT consulting firm in IT security may be supplying one
solution customised to multiple customers while a
strategy consultant will be formulating new strategic
interventions in every project.
• In any case, sharing information on time and across a
wide base will be required in assignments which can be
accomplished only by knowledge management.
• Secondary processes in consulting may be made more
efficient through such management

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Knowledge Management in Consulting Firms

• Many international consulting firms now offer
similar products and ways of delivering their
professional services. Standardized services lead
to lower margins as customization is minimal.
• Efficient learning from projects, economies of
reuse and quality assurance are essential if such
low-margin projects are to be viable.
• Consulting companies must be able to deliver the
same services throughout the world in order to
stay competitive as clients are in a global
economy.

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Knowledge Management in Consulting Firms

• Consultants are among the first to be affected by the
rapid developments that lead to new requirements and
new possibilities. The need to learn and continuously
improve one's own skills and expertise is urgent.
• A knowledge management programme should
therefore support efforts to learn and to introduce new
services, solutions and methodologies.
• Knowledge management programme must ensure that
information and knowledge remain within the
company even when staff members leave. Knowledge
management in this context is a means to reduce the
loss of intellectual assets. It also includes legal
protection of intellectual property

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Knowledge Management in Consulting Firms

• Knowledge management is needed because
– As knowledge is the main asset
– Consulting needs to be efficient and effective
– Consultancies turn services to commodities
– Clients become global
– Competitive response is to be improved
– Intellectual assets need to be protected

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Knowledge Management in Consulting Firms

Certain factors which play a key role in knowledge
management programs are more common in the
consulting environment,
Distributed work environment
Time-bound targets
Client centric solution development
Competitive environment within the firm
Reluctance to share knowledge
Reluctance to adapt solution developed by
someone else effort

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Knowledge Management in Consulting Firms

Establishing a KM program
Strategy: What is the firm's business strategy? How does the
knowledge management programme support this strategy?
Content: What is the relevant content? How can this content be
defined and structured?
Organization and processes: Who in the organization will take care
of maintaining the knowledge processes (generation, capture,
transfer and use of knowledge)? How can the knowledge
processes be integrated into daily work?
Culture and people: What can be done to overcome barriers to
knowledge processes? What does that mean for a knowledge
management programme?
IT: What information technology is needed for knowledge
management?

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Knowledge Management in Consulting Firms

Strategy
The business models of companies like Accenture,
KPMG Consulting or Ernst &Young rely on the reuse
of codified knowledge. Their success depends on
the fast availability of explicit knowledge; these
companies invest heavily in information technology
for knowledge management.
For strategy consultants such as Bain, McKinsey, or
Boston Consulting Group, there is a greater need to
focus on the sharing of tacit, highly context-
dependent knowledge. Knowledge networks and
an enabling cultural context for knowledge-sharing
are essential in these companies.

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Knowledge Management in Consulting Firms

Content
• The knowledge strategy determines what types of
knowledge or information are relevant for the success of
the company.
• It should address specific problems of locating, capturing
and transferring knowledge.
• Only a small portion of relevant knowledge can be
codified effectively. Knowledge can be personal, highly
context-specific and hard to capture by codification. This
tacit knowledge , which cannot easily be copied, is of the
highest value to the company and constitutes its main
competitive advantage.
• Therefore a knowledge management solution for
consulting firms should have two components:

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Knowledge Management in Consulting Firms

Content
1. It should provide a database of explicit, relevant information,
such as market studies, financial information about
customers, daily news, case studies, packages of information
concerning certain services, descriptions and courses for
methodologies, project profiles, etc.
2. It should provide access to tacit knowledge through a
database of experts or a directory. Knowing that someone has
experience in a particular field can be the key to using this
expertise in solving a new problem. The principal purpose of
the database is to tell people in the organization where to go
when they need expertise. The exchange of tacit knowledge
can be enhanced by supporting communities of practice,
organizing knowledge fairs, or introducing a mentoring model
into the company.

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Knowledge Management in Consulting Firms

Organization and Processes
• Knowledge base built up can be put to good use only if the
processes of capture and transfer are regular and updating of
the knowledge base correctly done.
• The firm should distribute the responsibilities connected to
KM among the staff and even appoint special Knowledge
Officers at appropriate levels if required.
• An example is Hansen and von Oetinger’s proposal for a
different organizational role, the T-shaped manager. T-shaped
managers are not only committed to the performance of their
individual business unit but are also responsible for the
sharing of knowledge across business units. Their main focus
is not on capturing and transferring codified knowledge but
on sharing knowledge and enabling the creation of new
knowledge.

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Knowledge Management in Consulting Firms

Organization and Processes
• The knowledge processes (generation, capture,
transfer und use) should be integrated into the
daily work routines. A requirement at the start of a
new project could be the submission of a short
project file describing the mission and the most
relevant data. At the close of the project, a detailed
documentation of best practices could be required,
and could be compiled at a project closure
workshop. This is one approach to managing the
process of converting tacit knowledge into explicit
knowledge.

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Knowledge Management in Consulting Firms

Culture and People
Knowledge by its nature is people driven and it
is more so in a consulting firm.
The ability to manage knowledge creation and
innovative use can even be a factor to be
considered when managers are being assessed
for elevation into partnership roles.

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Knowledge Management in Consulting Firms

Information Technology
The role of information technology in shaping
the knowledge management process in modern
organizations is amply clear from the way MIS
and networked workflow systems are changing
the functioning of firms.
Accelerating adoption of the ‘connected
enterprise model’ has made IT an integral part
of these organizations.

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Knowledge Management in Consulting Firms

Sharing Knowledge with Clients
Professional services like consulting require sharing
of knowledge with the client to a great extent but
certain limitations as to the use outside the client-
consultant interaction is also there.
Client permission to share intellectual property
resources may not be given if it extends to trade
secrets or proprietary processes.
Consultant attitudes can show the client the
importance of KM and will lead to a more fruitful
plan of action regarding KM in assignments.

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Knowledge Management in Consulting Firms

Codification is a strategy used by many large firms
to convert people dependent knowledge to
general reuse. In this client-sensitive
information is removed and the other key
knowledge components like work schedules,
benchmark data etc are pulled out as
knowledge objects for compiling and reuse.
Personalization is another strategy where the
knowledge is interactively transferred to the
people reusing it or requiring support.

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THANK YOU!

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