Knowledge Management in Consulting Activities
Eva Gattnar, Jens Schneider, Anna Dehmel, Sebastian Heiland,
Brigitte Stroetmann and Okan Ekinci
Siemens AG Healthcare Sector, Allee am Röthelheimpark 3a, Erlangen, Germany
Keywords: Knowledge Management, Consulting, Strategy, Talent Management.
Abstract: Nowadays, knowledge is key to value-creation in most industries, but for consulting companies, the
knowledge generated and shared in the organization represents the core service. Therefore, a strategy for
active knowledge management and utilization of knowledge in its different state is needed. The present
paper provides a review focusing on the meaning of knowledge for consulting activities. The different
stages of a consulting project are examined and the demand for knowledge management support in the
course of the project execution is analyzed. Additionally it is emphasized that two different management
strategies are applied simultaneously in the companies. With the personification strategy the human oriented
approach is practiced, within the technical oriented approaches of the codification strategy the storage of
explicit knowledge is promoted. Next to the codification and personification strategy the coordination of the
goals within the knowledge management as well as the active knowledge management influence on the
consulting success is emphasized. The paper aims to point out the increase of customer satisfaction, quality
of consulting services as well as the effectiveness in project work based on knowledge management.
1 MOTIVATION
Consulting companies are confronted with a high
fluctuation rate concerning their consultants. Poor
promotion prospects as well as the contempt of
personal commitment are seen as reasons for this.
Thus, saleable working hours provide a central
measure for the advisory services in most of these
companies. This results in a high outward, but low
inward orientation. Furthermore, consultants obtain
a high autonomy. The working process on site with
and for the customer is regarded as more valuable
than the development of the own organization. After
the completion of a project, investing time in the
documentation of the results is not seen as a service
for the customer and thus is more likely to be
neglected. A further barrier, associated with the
documentation of perceptions, is the inner
competitive pressure given the fact that the
documentation is also perceived from other
consultants and hence can be used.
The article describes the characteristics of consulting
activities and knowledge management. The
consulting market is examined in terms of the
characteristics of a professional consultation with its
frames und their classification as knowledge
intensive and professional services. In a second step,
the conjunction with knowledge management in its
crucial phases of a typical consultation project takes
place. Conclusively, the via knowledge management
obtained competitive advantages especially
technology and human orientated strategies as well
as the goal and usage of knowledge management
initiatives within consulting activities are described.
2 THE ENVIRONMENT AND
THE CHARACTERISTICS OF
CONSULTING
2.1 Definition and Minimum
Requirement towards a
Professional Consultation
Consulting is a professional service which is
performed by one or more generally speaking
functionally qualified and from the consulted clients
hierarchical independent people, which is time-
limited as well as in most cases effected for
consideration and has the aim to define, structure
and analyze business problems of the contracting
company interactively with the clients as well as
acquire problem solutions and, if wished, plan their
255
Gattnar E., Schneider J., Dehmel A., Heiland S., Stroetmann B. and Ekinci O..
Knowledge Management in Consulting Activities.
DOI: 10.5220/0005086402550260
In Proceedings of the International Conference on Knowledge Management and Information Sharing (KMIS-2014), pages 255-260
ISBN: 978-989-758-050-5
Copyright
c
2014 SCITEPRESS (Science and Technology Publications, Lda.)
realization cooperatively with representatives of the
client and realize these plans within the company
(Gattnar, Eck, 2013).
The main aim of business consulting is providing
support for the processing of business motivated
issues. Thereby, different aspects can be determined.
Among others, such aspects are strategy topics,
organization and business processes, and
information technology or personnel issues at the
customer. Hence, according to the classification of
Bundesverband Deutscher Unternehmensberater
various consulting focuses exist: the strategy,
organization, IT as well as HR respectively personal
consultancy. (Bundesverband Deutscher
Unternehmensberater, 2008).
In general it is to be noted that business
consulting is fully characterized by customer
independent and generally complex tasks and
parameters which require corresponding customized
solutions even if the scope if individuality can vary
depending on the project type or the consultation
focus.
The recommendation of the consultants
orientates itself towards the goal of the customers
and the therefore relevant topics. The consultant is
characterized as the professional problem solver
which provides the customer with its experience-
based knowledge. Due to this the entire consultation
process, within an ideal typical construction, lies in
the hands of the consultant whereas the aims and the
situation of the customer shape the input for the
consultation process. It is necessary to analyze these
in a prier step to consultation, since in reality the
missing aim on the part of the customer can
sustainably impede the consultation.
The minimum requirements towards a
professional consultation include that consulting is
an external and independent provided service in
order to process problems of a defined customer due
to specifically for this operation obtained knowledge
and abilities. It is performed on terms of a written
contract for money and granted on conditions of
ethical perceptions and moral rules.
Next to these minimum requirements the
consultant know-how shapes the core competence of
a consultant, which defines its professionalism.
These include the knowledge and the ability to
understand which are required for the co-creation
and management von consultation processes in order
to secure oneself and the client the necessary scope
for development to process problems. For the
application of specific methods and technologies the
consultant requires a basis which primarily contains
a basic understanding of consultation processes as
well as knowledge about characteristics and the
organization of the project layout. Professional
consultation additionally concludes the competence
of the consultant in its field of expertise as well as its
abilities to contribute to the setup of a promising
consultant / client relationship. Following points
count to the requirement criteria of consultants:
Ability to explain problems and solutions,
comprehensive expertise as well as experience from
earlier or similar counselling cases. These for all
consultants equally affected expectations are to be
endorsed by problem specific request of the
customers (Gattnar, Eck, 2013).
2.2 Classification of the Consultation as
Knowledge Intensive Process
Consulting companies belong to the category of
„Professional Service Firms“. These are so-called
knowledge intensive non-public companies in which
the value creation process is highly based on people
and their expert knowledge and experience. The
service is primarily generated by employees with
academic or at least higher education. Private
companies as well as public institutions and
establishments belong to the group of customers.
The professional service is generally strongly linked
to the scientific process in the field of know how in
which it is offered (Gattnar, Eck, 2013).
On the one hand „professional services“ are
intangible services which produce an intangible
output (i.e. a concept for process optimization) via
intangible input factors (e.g. methods, processes,
expertise of experts) in a creative performance
process. On the other hand „professional services
are not commodities, but are much more
characterized by heterogeneity respectively
variability. The result as well as the quality of the
service is highly dependent of their provider since
these are performed with a high intensity of the
factor work and within timing by partly different
experts. Due to this, providers of the “professional
services” try to counteract this fact with
standardization, corresponding personnel selection
and knowledge management. However, since these
are, to a large extent, provided customer individually
it is complicated to standardize them.
From the intangibility, heterogeneity and
customer individuality of the professional service
results that the potential customer is confronted with
the high amount of uncertainty in the phase of
acquisition. The quality as well as the qualification
of the company is difficult to evaluate beforehand
for the customer. A further feature is the
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simultaneity of the production of the service and it’s
consume. “Professional services” cannot be
produced in stock or stored as products which makes
the counterbalance between the own interconnect
capacity and the timing highly complex. To a high
extent the service is mostly produced in interaction
with the customer whereas the degree of customer
participation can vary according to the stage of the
project.
All in all „professional services“ are understood
as services which according to Müller are, to a high
extent, customized to individual customer needs and
are mostly provided in close cooperation with the
customer under insertion of distinct expertise and
experience of highly qualified employees.
“Professional Service Firms” with their optimized
key processes (e.g. employee qualification,
knowledge management etc.) and innovative
organization structures frequently obtain a role
model function especially for the customer.
In total, consultation services fulfill the features
of knowledge intensive processes. The effective
usage of available as well as the quick production of
new knowledge for the solution of customer
problems within the work process embodies a major
challenge in consulting. However, the once acquired
knowledge often isn’t sufficient for new projects.
Due to this it is necessary to complement, improve
and to renew this as a product of social interaction
and cooperation within a process. Within this
process it is necessary to frequently considerate the
actualization and preservation of the present
knowledge at the consultation since the aspect of
Figure 1: Several features knowledge intensive business
processes (Remus, 2002).
actuality is especially relevant at consultation
services particularly in terms of experience and
expertise. Hereby, the knowledge intensity can be
used as dimension for the classification of
knowledge intensive business processes (Remus,
2002). Figure 1 illustrates several features which
complement described characteristics of knowledge-
intensive business processes.
2.3 Knowledge Management Support
in the Crucial Stages of a
Consulting Project
Consulting projects are to be seen as projects since
they have a clearly structured beginning and a clear
end whereby a task is to be processed in the
meantime which would not be manageable in this
form for the customer. The graphical illustration in
Figure 2 depicts an ideal-typical procedure of the
crucial stages of a consulting project.
Figure 2: Crucial stages within a consulting project
(Gattnar, Eck ,2013).
Within an opportune case the trigger for a
consulting project illustrates a customer query
mediated by a key account manager. Already in this
early stage of the consulting project assumptions
concerning the contracting authority must be made.
Furthermore, the consultation service is dependent
on the expectations of the consultant based on these
assumptions concerning the situation at the customer
since the consultant obtains needed information
from the difference between the assumptions and
that what he or she finds with the customer.
The decision which consultant participates in the
consulting project is, next to their availability also
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257
based on the assumptions concerning the structure at
the customer. In most cases consultants are chosen
who have already gained experience in similar
projects, which are familiar with the assumed
structures and are available for the assumed project
duration.
All in all the presuppositions are the basis of the
consulting projects from which the consultant can
react in the situation of the initial contact. In order to
meet the presuppositions concerning the background
of the customer query as well as the current situation
at the customer a comprehensive support via
knowledge management is necessary. The
assumptions should be retained within a frame of
problem definition since this is the basis for the
termination of the initial business contact or for the
release of the engagement. Furthermore, the
subsequent consultation process subsists on the
creativeness of this run-up phase.
Every bigger consulting engagement with an
own pre-phase should include a depicted pre-study.
This gives the opportunity to execute a diagnosis of
the situation in terms of an intervention which can
reveal the actual problem, enable an exact time and
cost calculation and is crucial for the composition of
the consulting team.
The in the pre-phase gathered information and
drawn conclusions should be documented and
allocated for other consultants. This can be followed
by a workshop with a joint discussion which can be
helpful in the decision of conducting a consulting
project as well as in the formulation of a contract.
The necessary foreknowledge for the formulation of
a contract is crucial for the sustainability of a
consulting project so that this can be complied with
available resources and a calculated profit margin.
The actual project implementation takes place at
the customer. The end of the consulting project is set
in the initial contact and must be defined in the
consulting engagement. Generally following things
are important in this phase: A retrospective view on
the entire consulting project, an evaluation of the
project results, agreements concerning the aftercare
as well as regulations concerning the further possible
customer contact between consultant and customer.
All these points should be stored within a knowledge
management and be available for follow-on projects.
(Gattnar and Eck, 2013).
3 KNOWLEDGE AS
PRODUCTION AND
COMPETITIVE FACTOR IN
CONSULTING
Consultancy is defined by the fact that the applicable
knowledge and the necessary expertise become
obsolete quickly. The reason lies in that both are
contextual and, due to this, frequently change. Next
to this the staff development in consulting is marked
by a high fluctuation rate. This on the one hand side
requires that the knowledge of outgoing employees
is documented respectively forwarded and on the
other hand that the company conveys knowledge as
quickly as possible to new employees. Additionally,
next to general problem solving technics also
specific know how concerning technologies,
processes and products are important (Broßmann,
M., Mödinger, W., 2011).
Knowledge constitutes a central input factor in
the process of service and is as much important as
much complex and specific the creating service itself
is. Hence, the consultation success is dependent of
this production factor in a particular way. Due to the
fact that the value added is primarily dependent on
high qualified, committed employees, knowledge
management is assigned with the role of a main
respectively key process. In order to counteract the
short half-life period of specialized consultation
knowledge a systematically run knowledge
management for the actualization and preservation
of the input factor knowledge is adduced for
consulting.
In the following consultation is described as a
knowledge intensive service for which knowledge as
a competitive factor is crucial. Next to the strategies
of knowledge management the aims and expected
benefits at consulting activities are discussed.
3.1 Knowledge as Competitive
Advantage
Consulting, understood as a knowledge intensive
service, is based on common knowledge and
knowledge which presents a competitive advantage.
In the course of time the competitive advantage
degenerates while expert knowledge turns into
common knowledge if no new, specific knowledge
is developed. Knowledge is only then a competitive
advantage if it really contributes to a value
generation for the customer and is seldom in
comparison to the competitors. The relative market
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position can be held longer the worse the knowledge
of the competitors is imitable respectively
substitutable.
The goal of knowledge orientated company
management consists of generating knowledge from
information and implementing these in sustainable
competitive advantages which are measureable in
terms of business successes. This means to generate
all steps of the knowledge staircase which are
shaped from basic concepts of knowledge
management. From this three action fields of the
knowledge management can be derived: the strategic
and operative knowledge as well as the information
and data management. While the strategic
knowledge management passes the knowledge
staircase from top to bottom in order to answer the
question which knowledge is needed in order to stay
competitive, the operative knowledge management
contains the networking of information for
knowledge, ability and negotiation.
3.2 Strategies of Knowledge
Management in Consulting
There are two different knowledge management
strategies preferred in the consulting environment. In
some companies information technology plays an
important role in the handling of knowledge. Hereby
this is accurately codified and stored in databases.
Again in other companies knowledge is seen as
closely tied to a person. This is mainly forwarded
via direct interaction with other individuals. The
purpose of the information technology in this case
does not lie within the storage, but in the support and
substitution of information.
The two common knowledge management
strategies can be described as a personification
strategy and as the IT-supported form named
codification strategy. The choice of one of these
management strategies defines the extent of the IT-
support which a company needs. In terms of the
technical oriented approach of the codification
strategy, knowledge is generally compared to
explicit knowledge in documented form. This
knowledge can be provided the consultants with help
of the information technology. Prior functions of
supporting systems should facilitate the
visualization, search, structuring, publication and
presentation. In contrast the human oriented
approach of the personification strategy mainly
deals with implicit knowledge which is not available
in a codified form. Communication, expert search,
cooperation and community support shape the focus
in this case. With their help highly specific
consultation services can be offered.
Furthermore, the study showed that both
strategies appear in consulting to the same extent.
Which strategy dominates is dependent on the
method of how a consulting company generates
value added for its customers. The personification
strategy is useful for companies which are mostly
confronted with new and individual problems during
their consulting activities. Thereby, the implicit
practical knowledge of the partners is in a great
demand. Otherwise a standardized consultation
service such as it was the case at the SAP-
consultation requires access to reusable, codified
knowledge which can be stored and accessed by the
help of information technology. An optimal solution
is given with the deployment of both models in a
proportion of about 80:20. In due consideration of
the expenditure the choice of both models at the
same time is yet not optimal. Despite the relative
low amount of one of the models of approx. 20% of
the entire strategy the effort, which emerges through
the implementation of tools and methods for its
realization, is unlikely higher.
3.3 Aims and Utilization of Knowledge
Management in Consulting
Knowledge management develops direct and
purposive potential in order to improve the
competitiveness of a company and deliver solutions
for the challenges of the market. Customers expect
high problem solving competence, empathy for the
situation and low uncertainty in handling
consultation projects in the course of a consultation
service. On behalf of consulting companies the
economic project execution next to the
comprehensive customer satisfaction is of centrality.
Hence, four aims for the introduction of knowledge
management in consulting arise (Gattnar, Eck,
2013).
- Higher effectivity of the projects
The results of the consultation services are
critically questioned due to the tough
competitive situation. The market pressure
under which the customer companies lie
demands an effective consultation service in
order to win a competitive advantage for the
customer. The improvement of the competitive
situation for the customer is related to
innovative solutions which contain fewer
hazards for the consulting company. However,
prior knowledge is necessary for this.
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- Higher effectiveness in project work
With the strategic setup of knowledge and its
specific reuse the profitability of service
provision is supposed to be improved.
- Enhancement of the own profitability
The image of the consulting company
sustainability determines the price which can be
achieved on the market. An enhancement of the
own profitability on the one hand encompasses
efficiency increasing criteria, but includes the
deployment of available knowledge as
marketing instrument and argument for better
prices.
- High customer satisfaction
Acceptable cost effectiveness must be revealed
for the customer. With each project the
knowledge of the consultants about the
customer is deepened which is the reason why
follow-up projects, due to a shorter project
initiation phase, can be transacted more
economically. That again intensifies the
customer loyalty.
4 CONCLUSIONS
Present paper emphasizes the meaning of knowledge
management for consulting activities. Over and
above the minimum requirements of a professional
consultation this process was classified as a
knowledge intensive process in the entire process
structure of an engagement. Furthermore, the stages
of a consulting project were examined and the
demand for knowledge management support in the
course of the project execution was motivated.
Additionally knowledge in terms of consulting was
defined as a competitive resource. It was
emphasized that two different management
strategies are applied simultaneously in the
companies. With the personification strategy the
human oriented approach is practiced. Hereby the
focus lies on the support of the communication and
cooperation of employees. In contrast thereto, within
the technical oriented approaches of the codification
strategy the storage of explicit knowledge is
promoted. Next to the codification and
personification strategy the coordination of the goals
within the knowledge management were emphasized
with the entire company goals during consulting.
Hereby it became clear that knowledge management
can concretely influence the consulting success.
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