Consulting and Knowledge Management: Analytical Essay

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Abstract

The purpose of the paper is to introduce the concept of knowledge management. It helps to find a link between business consulting and knowledge management. It also focuses on need of knowledge management for consultants and how they can implement it. Further the paper elaborates the advantages of using knowledge management. It also includes the views of some of the top business consultancies on knowledge management and how they use it. Then the paper showcases some of latest developments in this field.

Introduction to Consulting

Consulting can be defined as the process to transferring knowledge, expertise from one to another in order to provide a solution or a help. There are two side, a client and a consultant and the client pays the consultant. At times, there is a third place which is the ‘problem’ to be solved. The overall process of consulting has various stages taking place in timely manner. First there is analysis of the problem faced to analyse the current business situation of the company. This analysis is provided to the client in a form of a proposal. The proposal included internal and external issues, strengths and weaknesses. If the proposal is accepted by the client, the consultant provided alternatives and recommendations to the client followed by an implementation plan. There are three major reasons behind the need of consultants; one is changes in sectors that encourage businesses to look for more expertise, second is the political aspect where consultants become a further legitimate aid, third is being cost-effective and overcoming budget issues. The consulting approach varies with different sectors and different organizations. Every consulting approach and strategy is based on different values, ethics, goals, outcomes and ideologies. It may focus on either a product or a process. The interactive model of consulting involves clients and consultants working is more collaborative manner to achieve the organizational goals (Jacobson, Butterill, & Goering, 2005).

Introduction to Knowledge Management

Started as an academic theory to becoming an essential part of organizations now, the concept of Knowledge management is being studied for over 30 years now. Defined by O’Dell and Grayson in 1998 as a strategy to provide right information to right people in right time and to help people put their actions into work. The process of knowledge starts with a piece of information. Whenever some information is processed, it has the potential to become knowledge. Information is processed if people are able to relate, link, or find patterns in it. Moreover there are two types of knowledge, tactic and explicit. Tactic knowledge is present in the brain where as explicit is knowledge present on documents. The process of producing knowledge is mainly based on a double spiral movement between tacit and explicit knowledge. There are four modes of conversion of knowledge: socialization (conversion of individual tacit knowledge to group tacit knowledge), externalization (conversion of tacit knowledge to explicit knowledge), combination (conversion of separate explicit knowledge to systemic explicit knowledge), and internalization (conversion of explicit knowledge to tacit knowledge) (Uriarte, 2008).

The need of knowledge management arises because some information is more important to the organization as compared to other information, and it is important to manage this information in order to achieve the organizational goals. When the organization is large, it is more difficult to know who has what knowledge and to make it accessible to all the people. This is the main purpose of knowledge management (Uriarte, 2008).

There are various definitions of knowledge management. One is result-oriented definition, to have the right knowledge at the right time in right place. Another is process-oriented definition, the systematic management of a process where knowledge is gathered, shared, created and applied. Another definition, is business-oriented where knowledge management is a collaboration of business intelligence and search engines (Uriarte, 2008).

Some organizations create a specific role like “knowledge managers”. These knowledge managers help create new initiatives aiming at sharing and developing knowledge. They also take the role of consultants relating the daily tasks to long term goals. They are tech-savvy and updated with latest information in technology. They also promote an environment suitable for knowledge sharing (Kubr, 2002)

Link between consulting and knowledge management

Knowledge is one of the core assets of any business or organization. A business generates its value through knowledge. Current economic models in business focus on the fact that value only comes from physical assets or outputs that can be physically measured. Recent developments show that organizations have been shifting their focus onto intellectual capital such as employee capabilities, company relationship with customers and stakeholders in order to create value. Consulting should be seen an interactive tool for transfer of knowledge between people (Kubr, 2002).

There are three major factors that encourage the use of knowledge in consulting. First is urgency of the issue. Whenever clients are in an urgent need to solve the issue, to overcome the challenges they are facing, they often tend to accept and utilise the knowledge the consultant has to provide. On the other hand when the urgency to reach to the solution is low, or even when the client is unaware of the problem, there is very little knowledge that is being transferred or used. Second factor is the way clients and consultants perceive each other. If the clients perceives the consultant as an expert, organized and credible there are chances that knowledge is more likely to be shared. On the other hand if the client perceives the consultant as more communicative, open-minded and interactive, again there are more chances of knowledge transfer. Third sharing of knowledge is usually facilitated at various stages of consulting to promote client collaboration and participation (Jacobson, Butterill, & Goering, 2005).

Advantages of using Knowledge Management in an organization includes effective operations. The organization is able to utilize time effectively, extra work is avoided with improvement in quality. With the help of knowledge management the responsiveness. As the access to knowledge sources gets easier, processes like providing high quality services, solving queries in timely manner and roll out services improve. Knowledge management also plays an important role in developing core competencies and creating an environment to enhance them through values, incentives and human resource policies. Moreover it encourages to use new ideas and develop new strategies through innovation (Kubr, 2002).

Research shows that knowledge management projects fail if there is a lack of knowledge strategy or a weak anchor-link to the organization. On the other hand if there is explicit knowledge strategy overall supported by management, technology and well- defined structure, knowledge management proves to be more successful (Petersen & Poulfelt, 2010).

The task of a consultant should be developing a knowledge market. An organization has all kinds of people, knowledge buyers, knowledge sellers, knowledge brokers etc. the task of a consultant lies in enabling such an environment where all of these can interact and help the organization eventually. Enabling conditions for knowledge sharing environment not only includes technological advancements but also inculcation soft competencies like values, ethics, mission, vision. Such factors help to create an environment where people start valuing each other and share more knowledge (Kubr, 2002).

In order to understand knowledge management, it is important to understand how knowledge transferred, generates and shared within an organization.

Yellow pages helps to identify people on basis of their competencies. People who have expertise in specific area are grouped together.
Skill profiles and knowledge maps would group people according to what they know. The skill profiles help to define the roles in the company and the competencies required for the role .
The collective memory would include databases for manual, and electronic books and used for high quality content.
· Communities of practice include people of same expertise who come together. E.g. strategic marketing consultants who come together to develop a new approach.
Centers of excellence are units in an organization with committed fill time staff who work together to solve queries, provide response and develop new strategies.

The process of developing Knowledge Management strategy involves knowledge management assessment and benchmarking. This is the first step to analyse the current situation in the organization. To understand what has been done, why it has been done and what are the strengths, weaknesses, gaps and hurdles. The second step would involve a knowledge scan, to be able to run through important procedures and data. After analysis a proper knowledge management strategy should be developed. In order to reduce risk, consultants should also focus on developing a knowledge retention strategy. For large organizations this is more helpful as they have more data to be managed. Moreover rather than depending on single technological tools, there can be a knowledge management framework. A knowledge management valuation also helps in knowing the value of the plan and how much to invest in it. Moreover a knowledge management policy would ease the governance of knowledge management policies and activities (Knoco, 2017).

The implementation paths of knowledge management is most important for consultants.

The first path involves information management to knowledge management: IT systems , yellow pages, databases are used to develop a support structure for information.
The second path involves knowledge managers to change agents: a knowledge manager is appointed to manage the entire network. The success mainly depends on the nature of the manager and his or her abilities to improve structure.
Third is the problem oriented path: Here pilot initiatives are used and project leaders create solutions. The aim it to integrate management initiatives and apply a common IT structure.
Fourth is the top-down approach: here knowledge management is handled directly by the corporate leaders. A corporate knowledge framework is developed (Kubr, 2002).

Top consulting firms on knowledge management

Bain & Company

Bain & Company define knowledge management as the process to create, access and transfer he correct information to make better decisions. It is also the process that helps transform data into actions. There are five stages of how information can be transformed into knowledge: Create, capture, organise, transfer and use. They believe that knowledge management helps to save revenue by providing the right information to the people at right time. When it come to restructuring due to an acquisition or a merger, knowledge management is highly effective. At the time of a merger, knowledge can be combined and pooled in (Horwitch & Armacost, 2002).

Some basic principles of knowledge management to be used by organizations

Knowledge management should serve your strategy. In order to do this there has to be a well defined business strategy by the organization.
Knowledge management should be driven from the top. E.g. in Siemens, the CEO Heinrich Von Pierer admitted that knowledge management became his biggest tool when he had to communicate with shareholders. The company’s strategic goal was that all people can access the pool of knowledge they built.
Good knowledge management is all about brokering and not distributing knowledge. A common mistake organizations make is believing that business can be run without investing in people’s skills. Tim Savino, the head of organizational development at Harley-Davidson, mentioned that the company would check what is working and what’s not and always document their data for future use.
Technology is a critical component for a well built knowledge management strategy. Also a clear focus on the process to achieve the strategic goal of the organization and focus on skills and people.
There should be support from all levels in the company. In the Bain & Company’s Management tool survey, Knowledge management was positioned 19th among all the tools surveyed and about 14% of the senior employees did not utilize it. They believe Knowledge management can be beneficial to an organization only if the senior employees value it and understand its potential (Horwitch & Armacost, 2002).

Deloitte Consulting

According to Delloitte Consulting, knowledge sharing is very important as it helps to avoid knowledge barriers and helps to overcome them. Moreover different organizations have different barriers like poor knowledge sharing resources, short term plans, lack of resources in context to communication trend. The company believes that knowledge management aims at making a balance between people, process and exchange. The two major aspects of knowledge management include giving quality support and enhancing collaboration among people. This can be achieved through providing reward schemes, communicating properly and using KPI for knowledge sharing. Further, knowledge management helps to define a better road map and implement long term strategic plans (Noirhomme, 2019).

Accenture Consulting

According to Accenture, it is difficult to keep up with the voluminous amount of data flow today through knowledge management. This encourages organizations to provide employees with new information to lead them towards the strategic goals of the company. Therefore it is important to move forward leaving behind the traditional tools of knowledge management. Rather than connecting people to people organizations should focus on connecting people to knowledge. There are three steps through which companies can connect knowledge: first by creating a hub for knowledge, organizing more strategically and encouraging team and collaborative work (Accenture, 2012).

Latest Developments in different areas

Knowledge management strategy in development sector: Just like the corporate sector, business strategies in development sect are equally valid. For any development project to achieve success, information of all stakeholders is necessary and to be able to utilize this knowledge in to define the project strategy. Knowledge management in development sector aims at sharing, gathering and using the knowledge for public goods. Development agencies do have a faster pace of acquiring knowledge. Exchange of knowledge should be promoted from successful projects and preventing similar mistakes from unsuccessful projects. Sustainable development is another growing aspect in development sector (Batra, 2017).
Knowledge management strategy in project management: Knowledge management in context to project managements helps in achieving experiential knowledge. When there is no knowledge management system in a business, there is loss of knowledge moving from one project to another. Some of the widely used knowledge management applications for project management are know-how database, project profiles and project memory. Moreover, knowledge is divided into two major components, kernel and ephemeral. Kernel relates to the core competencies of an organization where as ephemeral relates to knowledge that is project specific (Batra, 2017).
Knowledge management strategy in Artificial Intelligence: The aim is to identify and analyse the knowledge assets related processes and proper planning and use of the assets in order to achieve the organizational goals (Girad, 2015). AI and machine learning have started becoming an integral component of Knowledge management solution. This helps companies to identify data gaps, create new data, and improve data integrity (Fluss, 2018).

Conclusion

It is important to understand that a every business can only create a useful product when there is a respectful process followed by knowledge transfer in context of the consultant’s expertise and clients willingness. The scope of this transfer of knowledge should be determined mutually by clients and consultants (Jacobson, Butterill, & Goering, 2005). Technology plays a significant role in knowledge management, but the real hurdle lies in creating a balance between technology and people.

References

Jacobson, N., Butterill, D., & Goering, P. (2005). Consulting as a strategy for knowledge transfer. The Milbank quarterly, 83(2), 299-321. doi:10.1111/j.1468-0009.2005.00348.x
Noirhomme, M. (2019). Main success factors to secure intellectual capital through knowledge management. Deloitte. Retrieved March 1, 2019 from https://www2.deloitte.com/lu/en/pages/strategy/articles/km-main-success-factors.html
Horwitch, M & Armacost R. (2002). Helping knowledge management be all it can be. Bain & Company. Retrieved March 1, 2019 from https://www.bain.com/insights/helping-knowledge-management-be-all-it-can-be/
Accenture. (2012). Transforming Knowledge Management and Collaboration in the Intelligence Community. Accenture. Retrieved March 1 from https://www.accenture.com/in-en/~/media/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Industries_9/Accenture-Semantic-Wiki-Pov.pdf
Batra, S. (2017). Knowledge Management in Development Projects: A Case Study of HIDECOR Project in India. Journal Of Flexible Systems Management. 8(2). 55-64. doi:10.1007/BF03396520
Girad, J. (2015). Defining knowledge management: Toward an applied compendium. Online Journal Of Applied Knowledge Management. 3(1). 15-22. Retrieved March 1, 2019 from http://www.iiakm.org/ojakm/articles/2015/volume3_1/OJAKM_Volume3_1pp1-20.pdf
Fluss, D. (2018). Knowledge management in the era of AI. DMG Consulting. Retrieved March 1, 2019 from https://www.dmgconsult.com/knowledge-management-in-the-era-of-ai/
Petersen, N & Poulfelt,F. (2010). Knowledge Management in Action: A Study of Knowledge Management in Management Consultancies. Developing Knowledge and Value in Management Consulting. Retrieved March 1, 2019 from https://pdfs.semanticscholar.org/c743/14616e2d9d4cf6e60009a046198dd45b1674.pdf
Uriarte, F. (2008). Introduction to knowledge management: A brief introduction to the basic elements of knowledge management for non- practitioners interested in understanding the subject. Retrieved March 1, 2019 from http://www.aseanfoundation.org/documents/knowledge_management_book.pdf
Knoco. (2017). Knowledge Management strategy services. Knoco. Retrieved March 1, 2019 from https://www.knoco.com/knowledge-management-strategy-introduction.htm
Kubr, M. (2002). Management consulting: A guide to the profession. Retrieved May 19, 2019 from http://imc-armenia.org/wp-content/uploads/2016/01/Management-Consulting.pdf

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