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

 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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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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