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In order to consistently deliver high quality expertise in a profitable manner, professional services firms must ensure that this expertise is leveraged, or shared, across the firm - by all professionals who need it. Specifically, with respect to knowledge sharing, most professional services firms share certain needs:
- Leverage the firm's intellectual capital
- Find experts within the firm
- Share best practices internally and with clients
- Aggregate industry-specific research & documentation
- Keep client information secure
Knowledge Management Systems: Misguided Efforts
Despite the pressing need for reliable and timely knowledge sharing, most professional services organizations do not have a high quality mechanism to do so. In fact, 56% of practice professionals' time is spent either searching for information or gathering information. Only 25% is spent on the actual analysis. These statistics point to the need for much improved knowledge sharing.
Much of the difficulty to date has been because professional services firms have focused on 'knowledge management' (KM) systems as the answer. Knowledge management systems are meant to organize and share knowledge within a firm, but more often than not, their scope has become too large to manage, and keeping the KM systems up-to-date and useful has been an enormous challenge.
professional services firms, it is insightful to break down the elements of a knowledge sharing culture. These can typically be broken into people, process & technology; each of these explain the root causes of why KM systems are not working:
People
- Focus on billable hours - In order to maximize the bottom line, professional services firms have a laser-sharp focus on billable hours, or chargeability, for each and every practice professional. Although practice professionals are 'encouraged' to post relevant project documents to the KM system once a project is complete, more often than not, these same practice professionals are reassigned to another project immediately or shortly thereafter.
- KM not tied to performance - Again, while KM is encouraged, practice professionals' performance goals or compensation are rarely tied to knowledge management. This provides for little real incentive on the part of the practice professional.
Process
- Dedicated KM teams - In order to sustain the KM effort, larger firms have tried to maintain a dedicated KM staff. This staff typically consists of IT personnel to maintain the systems, as well as business analysts and librarians to organize and update all of the documents. The median KM cost per employee is $784 among many professional services firms, with some of the largest ones even having a dedicated staff of 40 FTE. This is hardly cost-effective.
- Information Organization - While experienced practice professionals are typically generating the content, the organization is often left to inexperienced business analysts or librarians. This leads to improper categorization and a loss of quality information. Further, should there really be an 'arbiter of information' - someone that decides what is important and what isn't?
Technology
- Multiple file repositories - Typically, for each project in a professional services firm, there is some type of online repository so that project members can share files. Typically, the 'knowledge management' database might be separate from project repositories -- it might only include a subset of all project files, those that are the end deliverables. And as mentioned, in many cases the end deliverables are not even uploaded. In the end, this not only creates multiple databases and systems, but also creates a vastly incomplete 'KM system'.
- High cost of legacy systems (e.g. Lotus Notes) - Through the early and mid-nineties, most large professional services firms deployed Lotus Notes - a comprehensive e-mail and knowledge management platform. However, over time, the system has become cumbersome and expensive. The larger firms can often spend millions of dollars annually on Lotus Notes maintenance and dedicated staff -- which is cost prohibitive from generating a real knowledge management ROI.
All of the above challenges have impeded the development of a true knowledge sharing culture within most professional services organizations.
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