The reason for this massive growth, says the report, is that most large organisations continue to recognise the importance of knowledge management’s central message – “that taking the management of knowledge resources or intellectual capital seriously is vital to the success of all modern organisations”.
An extensive survey carried out by US-based research firm IDC bears this out. KM initiatives, they say, have now spread from the professional services industries, across to manufacturing, communications, financial services and even government institutions. The KM industry has apparently passed the innovator phase and is now poised for mass adoption.
If this apparent burgeoning of KM initiatives has passed you by it may be because the term “knowledge management” is being increasingly disguised or even ignored. As the technological and cultural elements have become better understood, so the term itself has been downplayed. Over the past couple of years software vendors and management consultants alike have begun to focus instead on technology-oriented terms such as enterprise portals, push technology or content management.
How has KM developed?
Ernst & Young’s internal knowledge management systems have long been regarded as a model of best practice and, according to Ovum’s specialist report Knowledge Management – Building the Collaborative Enterprise, the company has achieved some of the most significant advances in the field.
Shirley Jackson, senior manager of the Centre for Business Knowledge at Ernst & Young, says: “We’ve been working on knowledge management since the mid ’90s and the system gets more sophisticated all the time.” According to Jackson, there have been some significant cultural changes in business over the past five years which have prompted more awareness of knowledge management. “The competitive environment has sharpened up and the expectation is that we should know about the businesses of our clients before we get involved with them. As firms have become more global, we’ve had to become more clued up.”
The increasing sophistication of Internet technology has also been a major catalyst in the development of KM systems. Intranets are now a key element of the IT infrastructure in most large organisations because of their ability to break down the barriers which have always hindered corporate communication. The intranet has opened up new opportunities for collaboration which are unrestricted by temporal or geographical limits, creating whole new virtual communities within organisations.
One of the most pivotal elements of Ernst & Young’s KM initiative is its Centre for Business Knowledge (CBK) which includes a library, a call centre for answering consultant’s requests and a database of consultant skills. The CBK’s role is to support a knowledge architecture, and define categories for knowledge acquisition and retrieval. It is also responsible for cultivating knowledge networks, and designing databases.
The IT cornerstone of the company’s knowledge management strategy is its Knowledge Web (Kweb) system which blends Lotus Notes and web technology with several types of internal and external databases. The success of the system has been largely due to the effective management of the individual knowledge networks. Close-knit communities of Ernst & Young professionals form virtual teams which are responsible for collecting, storing and advancing the knowledge of the company in a particular business area.
KM projects – where do you start?
One of the basic tenets of knowledge management is that it is not primarily a technical issue. A recent paper from Accenture on KM strategies that create value makes the point that many knowledge management initiatives in large organisations focus almost entirely on tools and technologies.
But in order for knowledge management to improve organisational practices, many factors must be taken into account: “Effective knowledge management requires a combination of many organisational elements – technology, human resources practices, organisational structure and culture, in order to ensure that the right knowledge is brought to bear at the right time.”
Terry Neil, global managing partner at Accenture comments: “It’s a big misconception that knowledge management is about technical infrastructure. Organisations like ours which succeed in this area start with the concept of how to get a high performance human being who is part of a high performance team within a high performance organisation. We now have 80,000 people on a Notes system but the reason it works is because it is part of a culture of sharing and contributing.”
According to Neil, the creation of a knowledge sharing environment is all-important. Without a culture which encourages knowledge sharing, he says, the technology is practically redundant. “In some organisations, there’s a sense that knowledge is power and a feeling that if you keep your knowledge to yourself, you become more powerful.” According to Neil, however, once a culture of knowledge sharing is part of an organisation, people are not only more productive but are also happier. “I think the critical question for most employees is: am I working in an organisation which helps me become more knowledgeable and grow?”
An important part of Ernst & Young’s knowledge initiative has been to build the organisational infrastructure which encourages knowledge sharing. However the scope and geographical distribution of the company’s knowledge base has prompted the effective use of technology wherever possible. Jackson explains: “Technology is not the answer but it is a very important part of the answer. You have to show people where the value is in the technology.”
She says a successful KM initiative must address the basic cultural and organisational issues of how knowledge is shared, distributed and created and how these processes relate to key business goals. This emphasis on the human element of knowledge management does not mean that IT solutions are superfluous, but rather that their success can only be measured against the degree to which they aid communication between people. “Top management needs to understand you have to invest money in systems but they must not forget that their scarcest resource is people,” she adds.
Recognising the importance of exploiting its own knowledge resources, Ernst & Young has created a substantial organisational infrastructure to support a knowledge-sharing culture. KM principles are now formally embedded within all the company’s consulting activities and have become key in strategic processes, improving consulting practices and driving future growth. The company claims to have gained sizeable returns on investment for its knowledge management initiatives which have helped to streamline its proposal and bidding process, allowing the company to gain new business and develop its client base. Jackson says: “You must have a knowledge management strategy that follows the business strategy. Our CBK approach has been developed to drive professional productivity. But the big lesson we’ve learned is that it has to have sponsorship from the top and the culture must be ready for it.”
Just one half of UK practices have implemented a pricing structure around auto enrolment implementation and advice - with many suffering increased costs
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
Accountants should alter their perspective on auto-enrolment to maximise business opportunities, according to Eric Clapton.
Kevin Reed discusses whether new accountancy group Cogital can rival the Big Four...and its likely direction of travel