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Knowledge management at Ernst & Young UK: Getting value through knowledge flows



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1This case study was prepared by the authors as a basis for class discussion rather than to illustrate good or bad handling of knowledge
management and associated processes.
2The sale of E&Y Consulting business to Cap Gemini was announced on February 29, 2000.
Jean-Noël Ezingeard
Henley Management College
United Kingdom
Simon Leigh
Center for Business Knowledge
Ernst & Young UK
United Kingdom
Rebecca Chandler-Wilde
Henley Management College
United Kingdom
This case study looks at knowledge management (KM) at Ernst & Young UK (E&Y UK), at the end of 1999/
beginning of 2000. The case describes the business processes to be supported by KM in a professional services
firm, and E&Y UK’s efforts in developing a robust Knowledge Management system that can deliver value.
The case describes the electronic resources in place, the key processes and the key roles played by people in
E&Y’s knowledge management efforts. It concludes by asking how the system should be further developed in
the light of the decision to globalize KM in the organization.
Tim Curry was in a rush but he didn't regret taking the call. He had just been invited to prepare a statement for a press release to
be issued with the formal announcement on 5 June 2000 that Ernst & Young (E&Y) had been ranked, for the third year in a row,
in the top 10 “Most Admired Knowledge Enterprises” in Teleos’ annual survey. He jotted a few ideas down on his note-pad, and
rushed out the office. He would make it in time for his next meeting.
Tim Curry is a partner and Chief Knowledge Officer (CKO) of E&Y, one of the largest professional services firms in the UK.
In 2000, the organization employs over 7,000 staff in the UK and many more in overseas locations.
As are most professional services firms, E&Y is structured as a partnership, with 468 partners. The present organization was
created in 1989 by the merger between Ernst & Whinney and Arthur Young. It operates in six distinct service activities:2
Ezingeard, Leigh, and Chandler-Wilde — Teaching Case
3S. Graff and J. J. Gabarro, “The Transformation of Ernst & Young UK,” Harvard Business School Case Study No. 9-498-049, 1996.
4As a partnership with unlimited liability, E&Y UK is not required to produce annual financial statements but, along with KPMG, has
voluntarily produced an annual report since 1996.
Audit and Assurance Services
Information Systems Assurance and Advisory Services
Business Risk Consulting
• Tax
Corporate Finance.
Corporate Recovery
Following a major change program started in the early 1990s3 by Nick Land, the UK Managing Partner, most professional staff
are grouped by industry specialism in addition to the service line (e.g., Business Risk Consulting or Tax). The industry groups
are listed in Appendix 1. E&Y is experiencing substantial growth. Fee income for the UK in their financial year ending in 1998
was i1 billion (increased by 19% from 1997). Nonetheless, the firm faces strong competition in the UK. It is, in fee income
terms, the third of the five major professional services firms present in the UK (with PricewaterhouseCoopers, KPMG, Arthur
Andersen, and Deloitte & Touche).
Professional services firms operate in a fast moving environment. Competition between large players is intense. In specific service
activities such as transaction based auditing and to an extent corporate tax, offering the lowest price for the service can play a role
in winning the business. In other areas such as management consultancy, price is less important than in basic services, but quality
of service is essential. Some of these service areas where service quality is an essential differentiator, such as information systems
and management consultancy, are also more vulnerable to many niche players (including some fast growing new entrants).
Customer retention and ability to cross-sell are essential to maintaining E&Y’s competitive position.
As he walked briskly to the lift, Tim Curry thought about how much had actually been achieved since people first started to talk
about knowledge management at the firm. Knowledge management only arrived formally at E&Y UK in 1996 when it was put
on the corporate map with his appointment as Chief Knowledge Officer for the UK (the firm started to implement KM in the U.S.
in 1993 under the U.S. CKO, John Peetz). Continued commitment to KM has since grown and the company now prides itself in
its ability to manage knowledge. The company’s 1998 annual report4 quoted being “Knowledge Rich” as one of its four value
principles, and describes on the second page of the report:
Ideas, insight and best practice are key elements in helping our clients gain competitive advantage. Our aim
is to fully capture all the expertise and experiences of our people and combine these qualities with extensive
external data together with our own significant global research. We then share the resulting knowledge
throughout our organization in order to make a real difference to our clients’ success.
KM is on the corporate strategy card at E&Y. Nick Land, E&Y’s Senior Partner (CEO), argues:
Our competitive advantage is harnessing the skills and talents of all our people better than our competitors can
or will—learning faster and sharing more.
E&Y’s use of knowledge management is widely recognized as best practice in the industry although most firms now claim to have
a knowledge management system in place.
Professional services firms tend to have complex business processes that are often tailored on an ad hoc basis. They are by nature
a people based business, whose products are intimately linked with the skills and knowledge of the staff delivering the service.
The processes involved will depend greatly on the practice concerned. The range of products and services by E&Y is quite varied,
extending from IT enabled reengineering through to fraud investigation. All services involve varying degrees of customization.
Typically, professional services firms gain business as a result of:
Knowledge Management at E&Y UK
(1) winning over competitors in a competitive bidding situation;
(2) direct approaches from new clients;
(3) direct approaches from existing clients;
(4) on-going relationships such as long term auditing arrangements.
The ability to project the firms capabilities as well as brand name are seen as critical success factors in winning the business.
Once the business has been won, the activities necessary for the completion of an assignment will vary, but typically involve:
Understanding (and sometimes helping shape) a clients requirements
Propose potential solutions
Execution (involving detailed design and implementation if required)
All phases of these processes require a broad range of expertise. This can range from specialist technical knowledge about how
to work around an inflexible feature of an ERP (Enterprise Resource Planning) package though to intimate knowledge about
market trends in a specialist industrial sector. For example, Alan Taylor, Knowledge Manager, discussing one output of the
knowledge, argues:
We use knowledge to ensure that our staff are instantly aware of what is happening in todays rapidly changing
economic and regulatory environment. We help them become experts in their field so that they can help their
clients identify and solve the most pressing business issues.
In addition to the need to support a wide range of knowledge needs, there is also a need for knowledge to be accessible off-site.
E&Y professionals are highly mobile, and up to 90% of them are offsite at any one time.
As summarized by Adrian del Maestro, Senior Manager looking after the requirements of the E&Y UK Energy Services Group
Knowledge Management needs to support three key business objectives:
Speed: Acquire insight in Burgess Hill today; apply it in New Delhi tomorrow
Connectivity: Connected professionals, any time, any place, anywhere
Going beyond the intranet: You rarely find wisdom or even insight in an intranet
3.1 Overall Organization
E&Y has put in place a central service responsible for internal knowledge management, the Center for Business Knowledge
(CBK). The center was originally modeled, together with CBKs in Toronto, Paris and Sydney on the Cleveland CBK. It was given
an official status in 1996 as the knowledge team under the responsibility of Tim Curry. The center is in charge of:
Strategic analysis at both industry and company level.
The knowledge infrastructure. This involves designing tools, processes, and principles for knowledge sharing throughout
the organization.
Specialist research services, offered to the rest of the firm on a cost recovery basis. These services are delivered through
a business research team and a strategy analysis team. These teams carry out in-depth, focused analysis on demand.
The CBK headcount grew by 30% between the middle of 1998 and the beginning of 2000. An outline organizational diagram is
shown in Appendix 4.
The firms approach to KM is, therefore, fairly centralized. E&Y thinks the centralized approach is necessary to ensure adequate
coordination of the knowledge efforts of the firm, develop and apply common standards, and ensure best practice. This is,
however, where the central role of CBK stops. In other words, while the management of the knowledge is supported centrally,
knowledge itself is decentralized. A key feature of KM at E&Y is the building of knowledge networks across the firm.
Knowledge networks are virtual groups of people who participate in a particular industry, process, or discipline. As often pointed
out by CBK managers, the Centers role with regard to these networks can and should only be one of coordination.
Ezingeard, Leigh, and Chandler-Wilde Teaching Case
3.2 Electronic Resources
The main home for knowledge at E&Y is called the Knowledge Web (KWeb). The KWeb is essentially a gateway to:
In excess of 1,000,000 documentsa number which is growing on a daily basis.
5,000 internal Lotus Notes Databases, of which 8% to 10% are full knowledge bases (the others being workflow or
administration databases).
External content, such as Reuters Business Briefing, Gartner Group research, Forrester, OneSource, company financial
databases, etc.
Knowledge bases are collections of knowledge grouped together with the objective of making retrieval, content acquisition, and
management easy. Ownership of the knowledge base is always clearly identified. Knowledge bases are organized following
guidelines that ensure a standard scheme for the logical grouping of the content and the organization of the data.
External content is seen by E&Y as an important aspect of their knowledge management infrastructure. As described by Julian
Hope, E&Y European Director of Business Research, at the Online 98 conference:
Sitting on the external content side of the house, I occasionally wonder whether Im the poor relation.
The vast majority of Ernst & Youngs $100m/a year or so investment in knowledge management is directed
at acquiring, storing, adding value to and deploying the intellectual capital of the firms professionalsthe
firms internal knowledge content. External content is introduced to enrich this, to refresh it and to add insight
and ideas that we dont possess ourselves. But whats the right balance, the most effective blend of internal and
external content? A fascinating question.
Access to knowledge can be gained through two main routes:
A knowledge catalog that provides a navigation framework. The look and feel of the catalog is similar to that of Yahoo!
A full text search engine, with which the users can carry out searches of all documents and attachments. The search
engine was chosen for its advanced search capabilities and its scalability. An important feature of the search engine
chosen was also its easy connectivity with Lotus Notes, which already operated as E&Ys GroupWare platform.
The infrastructure in place to support KM at E&Y is constantly evolving. An important innovation is the use of PowerPacks (see
Appendix 2).
PowerPacks are technically standard knowledge bases, but are specifically tailored to be portable. Limited in size to about 50Mbs,
they can be easily replicated on laptops. The whole PowerPack can be replicated quickly, and regular updates then only take a
few minutes, even over a slow modem connection. All PowerPacks share the same standard design and structure but the content
is specific to service lines or industries.
Specific knowledge bases can also be built for large client engagements. Known as ETD (Engagement Team Databases), they
act as a central repository of information for large projects. This helps the sharing of information between E&Y staff without the
need for formal meetings, and helps new staff familiarize themselves as they start on the project.
The technologists in the CBK have designed Community Home Spaces (CHS). These constitute an intermediate layer between
the user and the knowledge bases and external content that might be relevant to them. CHS constitute an intranet space for
communities that share similar interests. This is done through links to relevant knowledge bases and knowledge sources that have
been selected especially for the community.
These constantly evolving interfaces are making the knowledge management process easier, according to Shirley Jackson, senior
manager in the CBK, but they also have a drawback: the air-time challenge. Every time the CBK puts an innovation in place,
it needs to be communicated to the rest of the firm, and that can be difficult, argues Jackson. There are also practical control issues
that need to be addressed according to Jackson. For instance although PowerPacks are generally seen as very useful sources of
knowledge, the CBK has come to the conclusion that their proliferation could lead to difficulties. In particular, it can be difficult
to locate information that is spread across too many PowerPacks.
Knowledge Management at E&Y UK
4.1 Key Roles: People and Culture
The knowledge management processes at E&Y are embedded in key roles that have been assigned throughout the business. These
are described in Table 1.
Table 1. Key KM Roles
Role Activities
Business Unit Knowledge Manager
Knowledge Network Managers
Knowledge managers have been appointed in almost all business units at E&Y.
Their role is to ensure that KM (including content collection and development)
takes place in their business unit. Knowledge Managers have an important role in
ensuring that KM fits in with the strategic direction of the business unit to which
they belong.
Network Chairs Generally E&Y Partners or Senior Managers, they facilitate the knowledge
management process. Often described internally as being in charge of converting
hearts and minds to KM.
Assignment Knowledge Managers On larger assignments, a professional is usually assigned a KM role. This involves
two key distinct responsibilities. First, they are responsible for the knowledge
process on the assignment and, second, they ensure that the knowledge generated
on the assignment is harnessed.
Subject Matter Specialist Subject Matter Specialists are E&Y professionals that have particular expertise in
an industry, process, or discipline.
These roles are designed to facilitate the networking process. As argued by Séan Ryan:
Its all about networks. We call them COINs (Communities Of Interests Networks). This networking is
necessary to identify hot topics, populate PowerPacks with good ideas, assemble knowledge for ease of use,
filter knowledge and hopefully transfer tacit knowledge.
According to Janice Reid, Knowledge Manager in the Consumer Product industry group, the allocation of responsibilities ensures
that knowledge management work is distributed to everyone, but clearly this can only work if the right knowledge sharing culture
is in place.
There is no pecuniary recognition for sharing knowledge, but all professional staff, fee earners, are expected embrace
knowledge. Annual appraisals contain a section on knowledge sharing.
Building a knowledge sharing culture takes time, though. A senior manager at the CBK carried out research internally, and
suggests that the evidence shows that E&Y are starting to win the battle of developing a true knowledge sharing culture. The key
question, he argues, is if you were the best consultant in the firm but didnt share knowledge, what would happen....Would you
be allowed to continue? Changing attitudes has to an extent been made easier by an already open culture in the firm, but the
CBKs own research suggests that there is still some way to go, particularly in making sure that the Human Resources processes
are aligned with the knowledge sharing strategy.
4.2 Submission Process
A key aspect of E&Ys KM processes is the way knowledge is added to the knowledge bases. This is done through a submission
process, introduced in 1997. Each submission is reviewed by either (1) the Knowledge Manager (of the business unit, network,
or assignment) or (2) a Subject Matter Expert. The process is sometimes bypassed when groups focus on building knowledge
quantity, particularly in the early stages of the life of a knowledge base.
Ezingeard, Leigh, and Chandler-Wilde Teaching Case
Submissions accepted into a knowledge base are reviewed regularly by the central team based at the CBK and network managers.
The objective is to ensure the widest possible diffusion by nominating the submission for inclusion elsewhere. This, in turn,
ensures that best practice is transmitted to other practices or industry groups. When received by other groups, further nominations
may be carried out.
In 1999, a technically streamlined submission process was introduced. Although simple in technical terms, the innovation has
made the submission process more natural. It consists of a folder in employee mailboxes. When a contribution is written, it can
simply be dragged and dropped in the mailbox folder. It is then channeled forward automatically the next time the computer
is connected to the network.
4.3 KM Principles
In 1997, the CBK produced a booklet entitled Delivering Value Through Knowledge. The booklet sets out, for internal readers,
the firms vision for KM. Five knowledge principles are given:
Delivering value
Sharing knowledge
Protecting the firms property
Other peoples intellectual property
These principles firmly ground any knowledge management efforts into the objective of enhanced competitive advantage. They
also acknowledge that certain ground rules need to be adhered to in order to ensure the business ethics of the processes in place.
Copyright agreements with all suppliers are widely published.
5.1 Delivering Value
Delivering value is a key objective of the knowledge management effort at E&Y, but staff in the CBK admit that showing
evidence for this is very difficult. Yet it is the key to maintaining the momentum, both financially and culturally. Financially,
partners need to be convinced that resources (people, time, money, purchase of external content) need to be committed to the KM
efforts. In the first stages of implementation, for instance, the roll-out of the full text search engine was put on hold for a while.
This was partly due to budgetary constraints, essentially brought about by the need for benefits to be demonstrated before further
funds were committed. Demonstrating value is also seen as an important building stone of the knowledge sharing culture. Being
involved in the knowledge process takes time and effort at all levels, and this has to be justified, and justifiable. The firm and,
therefore, the business units need to keep funding the effort, and individuals need to share and use knowledge. It is an onerous
process at all levels.
The CBK staff are now bullish about demonstrating the benefits of KM. Séan Ryan, explains what indicators are used:
We have value measures in place that look at what the client perceives the value or the engagement has been.
Feedback from the client is the real measure. We also measure whether more business has been gained.
Another source of information we use is a monthly survey, distributed to 250 randomly selected professionals
in the firm. Average response rates are in the region of 60% to 70%, which isnt bad. This specifically looks
at what the users think of the KM process and the KM tools.
Usage is also closely monitored, and statistics are available to the CBK showing database hits and the source of the requests.
Knowledge Management at E&Y UK
5.2 Alignment with Business Strategy
Séan Ryan sees a major role for the CBK in ensuring that KM strategy remains aligned with the firms business strategy as well
as the strategy of individual business units. All business units are different. Knowledge needs to be generated, filtered, organized
and distributed. While most business units are very good at generating content, they sometimes need help to develop a knowledge
strategy, although as argued at senior level in the CBK
Strategy, and knowledge strategy, is a word that means different things to different people. But debate is always
This wide variety of approaches sometimes creates difficulties of alignment between the overall business strategy and the
knowledge strategy. While there seems to be no doubt that there is commitment at the top, there are sometimes differences of
opinion about what KM actually means, or what it represents.
Most UK business units now have a KM infrastructure in place. It took most of them between one and two years to reach that
stage. A challenge for the firm is now to ensure that these efforts translate into business benefits. According to Séan Ryan, this
for the firm as a whole, getting the principle embedded into the vision and the culture. This means maintaining
the momentum, constantly review our content, keep a good alignment with strategy, ensure that KM gets
embedded more deeply into the sales process and also the client engagement process.
The challenge of winning the hearts of the users never ends. The firm has created a knowledge sharing culture, but it needs to be
nurtured. Maintaining the momentum means continuing to demonstrate business benefits. It also means that the knowledge
process has to be seen as useful and simple to use. It is also important that people dont feel overwhelmed by the system. The CBK
is aware that this means treading on a thin line.
The simplification of the knowledge process is therefore clearly on the road map, according to Julian Hope:
We need to move beyond knowledge pull into knowledge push. This means that people need to be profiled a lot
better, and we will need to be more aware of their individual knowledge needs. We now have the technology
to help us do that and provide better filtering to match individuals needs. In the early days, we collected as
much as we could and built tools to help us retrieve information. We then put in place portals to knowledge for
groups of people we thought had the same kind of interests. What we now need is almost individual portals.
As he left his meeting, Tim Curry went back to his desk to think about the press release. What did E&Y do well in the way it
managed its knowledge? He looked at the notes he made earlier, and quickly checked the criteria that were used to rank E&Y
against other organizations:
Success in establishing an enterprise knowledge culture
Top management support for managing knowledge
Ability to develop and deliver knowledge-based goods and services
Success in maximizing the value of the enterprises intellectual capital
Effectiveness in creating an environment of knowledge sharing
Success in establishing a culture of continuous learning
Effectiveness of managing customer knowledge to increase loyalty and value
Ability to manage knowledge to generate value
He was confident that the firm would continue to score highly on those criteria in the future, but also realized that there were
significant challenges ahead.
Globalization was one of them. In January 2000, E&Y made the decision formally to globalize its knowledge management efforts
(he was now the head of Global Knowledge Management).
Weve globalized because thats what our customers in E&Y tell us they want. Global reach, common
standards, consistent processes, greater specialization and the economies of scale that come from doing things
together. But, with globalization we'll need to think really hard about how to stay close to the customer and
Ezingeard, Leigh, and Chandler-Wilde Teaching Case
about how we balance consistency with speed and the need to cater for the linguistic and cultural differences
that exist in an organization such as ours. At the moment, we know the processes work fairly well. We see that
people use our infrastructure, participate in COINs and, generally, tell us that they are getting value but we
can't rest on our laurels. We always need better content and in spite of the increasing sophistication of our
retrieval systems, knowledge overload remains a real problem. We need better navigation, more filtering and
the ability to push content in context to usersotherwise the system will become unmanageable.
At the same time, we also need to expand the base of our knowledge systemsextranet links with some of our
clients, for instance. This raises a whole host of complex business and technical issues and, if we're not careful,
we'll get distracted from our real roleto drive professional productivity in Ernst & Young.
The support of Ernst & Young in writing this case study is gratefully acknowledged.
Appendix 1.
Industry Expertise
Source: visited on 03/03/2000
Knowledge Management at E&Y UK
Centre for Business
Centre for Business
The Powerpack
Appendix 2.
The PowerPack
The generic structure of a PowerPack is:
Network Communications, made up of industry news and
events details
Sales and Marketing Material, comprising brochures,
presentations, proposals, credentials, client and compe-
titor information
Service Delivery, made up of exemplary client deliver-
ables, tools and methodologies, internal best practices
and war stories
PeopleCVs and skills
Process Models, Benchmarks and Leading Practices
such as external practices, processes and performance
Regulations and Technical Standards, which are industry specific regulations and standards
E&Y Articles, Publications & Research, such as published articles, speeches, white papers, and position statements
Learning Resources, which are training materials and external reference material
Ezingeard, Leigh, and Chandler-Wilde Teaching Case
Strategic Analysts
TMC Team
Network c oordination
Knowledge web
Knowledge Infrastructure Specialist research services
London and Birmingham
Head: Tim Curry
Strategic Analysts
TMC Team
Network c oordination
Knowledge web
Knowledge Infrastructure Specialist research services
London and Birmingham
Head: Tim Curry
Appendix 3
(end 1999) Turnover/Gross fees
(1998)a in imTurnover/Gross fees
(1999) in i m
PwCb16,000 Not available Not available
KPMG UKc10,520 2,539.6 2,003.6
E&Y UKd7,770 1,163.2 1,032.6
Deloitte & Touchee7,000 1,115.3 918.9
Arthur Andersenf6,500 758.7
aWhen reported in Pounds Stirling, figures converted on the basis of £ 1 = i1.631.
bSource: PricewaterhouseCoopers UK Factsheet, 1999.
cSource: 1999 Annual Report.
dSource: 1999 Annual Report. The 1999 revenue attributable to the management consultancy activities sold to Cap Gemini in 2000 was im
eSource: visited on 5/3/2000.
fSource: visited on 5/3/2000. UK only figures not given in global annual report.
Appendix 4
Teaching Note
Knowledge management (KM) has emerged as an important driver of competitiveness in professional services firms. By their
very nature, professional services firms are knowledge intensive throughout their business cycle. Typically, these firms rely
heavily on knowledge to win new business, to design and deliver the services sold, and to maintain on-going client relationships.
Not surprisingly, therefore, professional services firms have been among the earliest adopters of KM technology.
This case study is designed to help explore the issues connected with KM, in the context of a typical business school MIS course.
What is KM?
What are the benefits from KM?
What are the key enablers of KM, including the relationship between people, organizations, and technology?
What is managing the strategic impact of information systems?
The case was researched over a period of eight months, through unstructured interviews, structured interviews, and analysis of
secondary data.
It is often worthwhile spending a little time discussing the circumstances surrounding the case before students are asked to discuss
the case in detail. This is all the more important here as professional services firms such as E&Y can be a little mysterious in what
they do. In particular, both the input and output of E&Ys processes are knowledge. A simple discussion based on input/process/
output can quickly ensure that the class is familiar with the background. This can be wrapped up using a definition of
professional services firms by Nachum (1999):
The production processes of these services are based on manipulation and application of this knowledge by
highly educated employees to provide a one-time solution to specific clients problems.
It can also be useful at this stage to briefly review the competitive position of E&Y UK, and some of the CSFs of E&Y UK. This
Quality of service
Customer retention
Ability to cross-sell
3.1 What is Knowledge Management
Fahey and Prusak (1998) argue that the first error in KM is not to develop a working definition of knowledge, and it is useful
to ask participants the basic question, What is KM? as a way of exploring what issues need to be addressed when exploring
the case further. The discussion can be started by asking the participants whether, having read the case, they agree with the
definition of KM given by Ruggles (1998).
Ezingeard, Leigh, and Chandler-Wilde Teaching Case
Knowledge management is an approach to adding or creating value by more actively leveraging the know-how,
experience, and judgement resident within and, in many cases, outside an organization.
The discussion can be structured using a three column matrix on the board, breaking down answers under three categories:
people, organization (and process), and technology, as shown in Table 1.
Table 1. What is Knowledge Management?
People Organization/Process Technology
The aim of this exercise is to show that, in the context of E&Y UK, knowledge management is a broad concept. Once some ideas
have been captured under each of the three headings, it is possible to begin exploring what knowledge actually is. It may seem
paradoxical to start by discussing knowledge management before discussing knowledge, but this can be useful for two reasons:
Knowledge is context dependant, and it can be useful to wait until some of the issues have started to emerge under Table 1
to ask this fundamental question.
Practically, it can help focus participants thinking and, therefore, avoid long discussions of a philosophical nature about
3.2 What is Knowledge?
A useful traditional MIS tools that can be used to explore the question is Burnstines Customer Resource Life Cycle (CRLC) (Ives
and Learmonth 1984). When using the CRLC, it is useful to ask participants to think about how customers select a professional
services firm. The case provides enough information for the cycle shown in Table 2 to be built. If the class is familiar with the
CRLC, this can be done with two groups of participants, each taking a different point of view, namely E&Ys and that of the
customer. If the class has never been introduced to the CRLC, it can be worthwhile to prompt answers in the second column of
the table, while leaving the class to identify the knowledge needs from the case (third column). This exercise is useful as the case
tends to focus on the E&Y view of what is needed, rather than what knowledge gives E&Y an advantage, and at what stage. It
is also interesting to identify the role clients play in professional services firms. Clients are active participants in the service, and
in the context of E&Y UK, any working definition of knowledge needs to capture their involvement.
Table 2. Customer Resource Life Cycle Applied to E&Y UK
CRLC Steps undertaken by the customer E&Y UK Knowledge Needs
Requirements Identify the need to employ a professional services firm (PSF)
Specify work to be undertaken and allocate resources
Acquisition Call for tender
Evaluate tenders
Select PSF
Draw up contract
Stewardship Communicate with consultants
Manage the assignment
Review the project
Retirement Evaluate work
Check Bills
Assess the need for further work
Knowledge Management at E&Y UK
At this stage, it is possible to introduce (or remind participants of) Nonakas definitions of tacit and explicit knowledge (Nonaka
1994), and ask participants to revisit the third column of Table 2 and classify the knowledge needs as explicit or tacit. This will
be useful when looking at the suitability of the supporting technology and processes.
4.1 Structure vs. Infrastructure
The supporting technology can be looked at through a simple question:
Does the technology provide adequate support for the KM needs at E&Y UK?
The exercise can be structured using Table 2 again. Each knowledge need can be mapped to supporting technology, and this can
help identify areas whether good support is provided (such as the delivery of the service through PowerPacks and Engagement
Team databases) and areas where no tools seem to be in place (such as project evaluation). Appendix 2 in the case study can be
used here, as the structure of the PowerPack described maps clearly onto the Requirements, Acquisition, and Stewardship phases
of the CRLC.
In looking at whether the technology is adequate, some participants may take the view that it seems to be lagging behind the needs
of the company and in particular the risk of proliferation of knowledge sources. Much effort seems to be on-going to simplify the
technology. Participants may point towards:
The user friendly nature of the PowerPacks
The knowledge catalog
Community Home Spaces
It is interesting to point out that many of the changes and on-going technical improvements described in the case are not concerned
so much with the infrastructure per se, but rather seem to focus on find better ways to structure knowledge and its retrieval.
Suitable infrastructures seem to be in place, but the structure of the knowledge repositories needs to be improved.
4.2 Technology and Tacit Knowledge
A more traditional MIS answer to identifying suitable IT support would be to use a tool such as Edwards et al.s formality/routine
map (1995). A short debate about whether it is applicable in the case of KM rather than information management is interesting.
Some participants may argue that knowledge (whether tacit or explicit) is informal, and that its management is a non-routine
activity. The case is, however, not so clear cut, and clearly indicates a degree of routine management of the knowledge. This
could also take the debate back a step about what knowledge, and knowledge management, actually are.
It has been suggested that two different IT strategies emerged to support KM depending on the competitive strategy of the
organization (Hansen et al. 1999). While some organizations rely on a codification strategy that seeks to make knowledge
independent of individuals, others rely on a personalization strategy that emphasize the channeling of individual expertise to the
right place at the right time. Strategies based on codification are often heavily supported by database technology whereas
personalization strategies are often only moderately supported by technology with a greater emphasis on building relationships.
At this point, it can be useful to draw two columns on the board, as shown in Table 3, to emphasize the different characterizations
of Knowledge that have been discussed so far, and ask which applies to the E&Y UK.
Table 3. Different Characterizations of Knowledge
Tacit Explicit
Informal Formal
Personalization Codification
Ezingeard, Leigh, and Chandler-Wilde Teaching Case
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Initial comments are likely to be that an effort is being made by the organization to codify and formalize knowledge, and make
it as explicit as possible. This is the view that Hansen et al. have of E&Y.
There is, however, evidence in the case that the picture isnt as clear cut as it first appears. In particular, there seem to be
mechanisms in place that recognize the need for an element of personalization. This includes Subject Matter Experts and COINs.
As pointed out by del Maestro in the case, you rarely find wisdom in an intranet.
In his article about knowledge management in the consulting industry, Sarvary (1999) argues that when evaluating KM systems
potential for building competitive advantage, one should also evaluate the ways in which it will be used by the members of the
organization. Although the case does not describe the knowledge process explicitly, it is possible to infer from the description
of the various roles, the description of the submission process, and the description of the infrastructure that the process follows
a fairly standard path, such as that described by Zack (1999) (see Figure 1).
Figure 1. Knowledge Process Path
Key issues that can be debated around this process include:
How well is each phase likely to work, based on the information provided in the case about the mechanisms,
technology and roles in place?
How would you assess how well each phase of the process is performing?
An important aspect of any KM process is, of course, whether knowledge is actually used (and acted upon). Any discussion about
the evaluation of the process will, therefore, need to address what comes after the presentation phase of the process shown in
Figure 1. The case gives evidence that knowledge is actually used. Although no direct user experience is related, it is clear from
the case that processes are in place, and the importance attached to issues of alignment and value demonstration indicate that were
the knowledge not used, this would emerge (although some students might find that this is open to debate). Measurements that
are taken tend to focus on one end of the process or the other.
As Leidner (1999) points out, In understanding the potential impact of KMS on organizations, it is first necessary to understand
the cultural implications of such systems.
An interesting question that can be asked is:
What is the difference between an information management initiative and a knowledge management initiative?
This can be structured using models of information systems with which students are familiar, such as Laudon and Laudons
people/organization/technology model (1998). The aim is to emphasize the importance of culture in KM initiatives. Culture is
widely acknowledged as one of the key enablers of KM initiatives, which differ from most information management projects
because of the difficulties associated with managing human factors (Davenport et al. 1998). This is identified in the case by issues
such as:
The air-time challenge
Need for central coordination
Difficulties in developing a knowledge strategy
What would happen if the best consultant in the firm wasnt sharing knowledge
Knowledge quantity vs. knowledge quality
Knowledge Management at E&Y UK
Figure 2. The Knowledge Management
Wisdom Connectivity
Figure 3. The (Conflicting?) Objectives of KM
At this point, an interesting debate can be prompted by asking
participants to build a sand cone pyramid showing which of aspects of
knowledge management need to be in place before others, as illustrated
in Figure 2. Getting a knowledge culture in place is perhaps the most
important aspect of any KM initiative, and without this sandcone
would fall. This has to be followed by the right processes around
knowledge to ensure that it is structured appropriately. Only once these
two elements are in place, it is worthwhile thinking about the
information management infrastructure and the technology. As argued
by McDermot (1999), The great trap in knowledge management is
using information management tools and concepts to design knowledge
management systems.
The key challenge now facing E&Y is the globalization of its KM
efforts. This can be addressed by a fairly general question:
Where should E&Y direct its efforts to ensure that
globalization is a success?
The final section of the case identifies issues that need to be addressed. These include:
Culture: nurturing the knowledge culture, embedding KM in the client engagement process
Structure: filtering to prevent information overload
Infrastructure: extending KM.
It is also interesting to ask a more focused question at this
How is the globalization of KM at E&Y
going to impact the firms competitive
Although the case does not give the reasons behind the
decision to go global, it will clearly support two key
objectives: speed and connectivity. Are these two objectives,
however, in conflict with the third objective quoted by del
Maestro: going beyond the intranet (see Figure 3). The risk
is perhaps that going global could require even more
codification than is currently in place, to the detriment of the
processes that rely on personalization.
Davenport, T. H., DeLong, D. W., and Beers, M. C. Successful Knowledge Management Projects, Sloan Management Review
Winter 1998, pp. 43-57.
Edwards, C., Ward, J., and Bytheway, A. The Essence of Information Systems (2nd ed.), Upper Saddle River, NJ: Prentice Hall
International, 1995.
Fahey, L., and Prusak, L. The Eleven Deadliest Sins of Knowledge Management, California Management Review (40:3), 1998,
pp. 265-276.
Graff, S., and Gabarro, J. J. The Transformation of Ernst & Young UK, Harvard Business School Case Study No. 9-498-049,
Hansen, M. T., Nohria, N., and Thierney, T. What's Your Strategy for Managing Knowledge, Harvard Business Review,
March-April 1999, pp. 106-116.
Ezingeard, Leigh, and Chandler-Wilde Teaching Case
Ives, B., and Learmonth, G. P. The Information System as a Competitive Weapon, Communications of the ACM (27:12), 1984,
pp. 1193-1201.
Laudon, K. C., and Laudon, J. P. Information Systems: A Problem Solving Approach (4th ed.), Orlando, FL: Dryden, 1998.
Leidner, D. E. Information Technology and Organizational Culture, in Strategic Information Management, R. D. Galliers, D.
E. Leidner, and B. S. H. Baker (eds.), London: Butterworth Heinemann, 1999, pp. 523-550..
McDermott, R. Why Information Technology Inspired but Cannot Deliver Knowledge Management, Sloan Management
Review (41:4), 1999, pp. 103-117.
Nachum, L. Measurement of Productivity of Professional Services: An Illustration on Swedish Management Consulting Firms,
International Journal of Operations and Production Management (19:9), 1999, pp. 922-949.
Nonaka, I. A Dynamic Theory of Organizational Knowledge Creation, Organization Science (5:1), 1994, pp. 14-37.
Ruggles, R. The State of the Notion: Knowledge Management in Practice, California Management Review (40:3), 1998, pp.
Sarvary, M. Knowledge Management and Competition in the Consulting Industry, California Management Review (41:2),
1999, pp. 95-107.
Zack, M. H. Developing a Knowledge Strategy, California Management Review (41:3), 1999, pp. 125-145.
... Put all this compound information to use in solving business problems (Ezingeard et al., 2002;Griffiths & Remenyi, 2008;Ruggles, 1998;Sarvary, 1999) which denotes a highly social connotation to knowledge management. One such model is that presented by Griffiths & Remenyi (2008) that breaks down approaches to knowledge management into People-driven networks and Technology-driven networks, and establishes a link between the emphasis on these kinds of network and the value discipline of the organisation (Treacy & Wiersema, 1995). ...
... Organisations need to find the right balance, the most effective blend, between internal and external content, and avoid the trappings of being too introverted, too satisfied with their own view of the world. Their internal networks need to link up with other networks in their areas of expertise (Bartlett, 2000;Collins, 2002Collins, ,1998Ezingeard et al., 2002) This can be represented in a two-dimensional space as shown in Figure 1. One axis represents the degree of development of knowledge management founded on Technology-based networks, from Low to High. ...
Conference Paper
Knowledge and knowledge sharing are recognised as being important resources for competitive advantage, and key to enhancing the innovation of organisations. It is argued that the encouragement of knowledge‐sharing cultures within learning environments such as universities, can increase the quality of education and can create opportunities for innovation. This research aims to examine the impact of sharing (donating and collecting) knowledge on product and process innovation. A total of 230 usable questionnaires were collected from private colleges in Iraq. Structural equation modelling with AMOS 20 confirmed the importance of knowledge sharing in developing innovation in higher education. The results revealed that collecting knowledge has a greater effect on product and process innovation than donating knowledge. Guidelines are developed for academics as well as leaders, and evidence is provided in support of the use of sharing knowledge in enhancing product and process innovation within higher education in developing countries generally and in Iraq in particular. The implications of the findings and suggestions for future research are discussed.
... Takeuchi's knowledge spiral with data mining to achieve a unique collective of knowing that resides within a community. The emphasis on interpersonal interaction in personalisation placed ICT in a supporting role in knowledge sharing and collaboration (Ezingeard et al. 2000). A wide variety of different communication channels are used to facilitate such knowledge sharing (Oerlemans & Meeus 2005) of which two are relevant to my research: creating expertise location systems and establishing knowledge networks (Alavi & Leidner 2001). ...
... databases successful examples include BP, Buckman Laboratories, HP, and Shell (Kankanhalli et al. 2003). Expertise databases ensure the required knowledge is channelled to those who need it when they need it (Ezingeard et al. 2000). The 'experts' with the knowledge are categorised for easy location, once located interpersonal interaction ensues between the expert and the user seeking the information, either electronically or in person. ...
... Many large companies use Lous Notes as a tool for knowledge management. The consultancy company Ernst & Young in the UK claims to have more than 1 million documents available on their Intranet in addition to their 5.000 internal Lotus Notes databases (Ezingeard et al., 2000). Medium-sized companies will certainly not have systems of this size, and will probably also use more low-cost solutions like Intranets than larger companies. ...
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Companies that develop software have a pressure from customers to deliver better solutions, and to deliver solutions faster and cheaper. Many researchers have worked with suggestions on how to improve the development process; software process improvement. As software development is a very knowledge intensive task, both researchers and industry have recently turned their attention to knowledge management as a means to improve software development. This often involves developing technical tools, which many companies have spent resources on. But the tools are often not used in practise by developers and managers in the companies, and it is often unknown if the tools improve how knowledge is managed. In order to build efficient knowledge management tools, we need a better understanding of how the tools that exist are applied and used in software development. We present and analyse eight case studies of knowledge management initiatives from the literature. We found evidence of improved software quality, reduced development costs and evidence of a better working environment for developers as a result of these initiatives. Further, we examine success criteria in knowledge management codification initiatives, based on Intranet tools in medium-sized software companies. In addition, we investigate how knowledge management tools are used for different purposes by different groups of users in two software consulting companies. They use tools both as support for personalization and codification strategies. The consulting companies are two medium-sized Norwegian companies with 40 and 150 employees, which work in development projects that lasts from a few weeks to several years.
... As already observed, consultancies such as Ernst and Young [12,13], frequently take this subject most seriously. Typically they have a combination of part-time knowledge management enthusiasts in their operating units and full-time knowledge management specialists in a central unit. ...
This chapter provides an overview of the knowledge management (KM) problems, and opportunities, faced by large organizations, and indeed also shared by some smaller organizations. The chapter shows how semantic technologies can make a contribution. It looks at the key application areas: finding and organizing information; sharing knowledge; supporting processes, in particular informal processes; information integration; extracting knowledge from unstructured information; and finally sharing and reusing knowledge across organizations. In each application area, the chapter describes some solutions, either currently available or being researched. This is done to provide examples of what is possible rather than to provide a comprehensive list. The chapter also describes some of the technologies which contribute to these solutions; for example, text mining for analyzing documents or text within documents; and natural language processing for analyzing language itself and, for example, identifying named entities. Most fundamentally, the use of ontologies as a form of knowledge representation underlies everything talked about in the chapter. Ontologies offer great expressive power; they provide enormous flexibility, with the ability to evolve dynamically unlike database schema; and they make possible machine reasoning. The chapter concludes by identifying the key trends and describing the key challenges to be faced in the development of more powerful tools to support knowledge work.
p> Little evidence is available that meaningfully describes how organisational members share knowledge among themselves. Informed by the literature on Knowledge Management, this research employs an ethnographic research approach to investigate if narratives may be conceptualised as a means to transfer and exchange knowledge within the context of daily operational work activities. Additionally, questions regarding the context of narrative performance and the significance of such contexts are examined. Lastly, the research analyses the knowledge content of narratives in order to inform the development of frameworks for knowledge exchange within organisations, potentially moving beyond the use of information technology. This research is premised on an empirical investigation of two contrasting settings - one within the public sector, the other a private sector organization. The interpretive research undertaken has collected data through an ethnographic Participant Observation method in both settings. The uniqueness of this research is in its use of narrative. While narrative has been used within interpretive research frameworks before, this research does neither elicit narratives by prompting story-telling, nor does it create, or recount, a narrative out of non-storied data. This research identified and observed narratives as and when they occurred. It is established that communication among team members takes a narrative form more often than anticipated, which may suggest that this is not necessarily coincidental. This occurrence of narrative forms in daily communication is particularly apparent in face-to-face encounters. Furthermore, the research provides evidence that narratives are replete with various types of knowledge.</p
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The archivist persona is frequently described in terms of passive, introverted attributes, which are then viewed as contributing to critical concerns for the sector, such as a lack of visibility, perceived effectiveness, and funding. This study is the first to assess the archivist persona through a discourse analysis, examining the usage of words promoting value and positive benefits in archival studies publications. Titles and abstracts from research articles published in five prominent journals between 2015 and 2019 were analysed for a set of 57 words connoting value or valuable benefits, including terms such as “innovative”, “positive”, and “strategic.” An identical analysis of research articles published in five knowledge management (KM) publications over the same timeframe was also completed in order to provide a comparative dataset from an adjacent, yet more corporate-embedded information practice. The results demonstrate that archival studies researchers use value words to promote the benefits of their research, but do so at a significantly lower frequency and density when compared to KM. A qualitative analysis of the results shows that archivists leverage a passive lexicon to promote value and benefits, relying on generic adjectives and indirect claims, whereas the lexicon of KM communicates direct, actionable outcomes that more readily align with business stakeholders’ priorities. These findings suggest practical communications recommendations for the archives sector, which could enhance business stakeholders’ perceptions of archivists and the value of archival work.
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Conference Paper
Research performed in the latter part of the prior decade arrived at a strategy-intellectual capital (IC) management alignment framework that presented two alternative orientations for managing IC: People-based networks, and Technology-based networks. Interestingly it was found that these two types of networks were mutually exclusive, that is that organisations would opt for one or the other, not both. Under suspicion that there could be a shift in this paradigm over the last five years, this research is conducted to find out if organizations really have to choose between these two types of network. The strategy-knowledge management alignment model is tested by doing a survey on knowledge orientation in 54 Chilean companies, and it concludes that, in effect, that the model is no longer valid. On the positive side, this research finds a set of variables that closely represent the three constructs.
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Existing measures of productivity were designed to measure productivity in industries in which both input and output are tangible standardised quantities. They are inadequate for productivity measurement of professional services, where intangible and specialised factors of production are in use. This paper seeks to address the difficulties associated with the measurement of productivity of professional service firms and to propose a more adequate measure of productivity in these industries. This measure is tested on a sample of Swedish management consulting firms, and is assessed in relation to several performance indicators of these firms. The findings illustrate the inadequacy of the manufacturing-based measurement procedures and demonstrate that a measure which acknowledges the unique characteristics of professional services correlates better with firms’ performance. As this field of research is in its infancy, these findings are only suggested as indications for direction in which future research is needed.
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This article draws attention to a number of errors that could potentially cripple the efforts of any organization attempting to generate and leverage knowledge. Many of these errors are associated with the concept of knowledge itself—how knowledge is understood in organizational settings. The article notes the sources of each error as well as some key implications for managing knowledge. It concludes with some brief suggestions on how to avoid, or at least ameliorate these errors.
This article analyzes how Knowledge Management (KM) is likely to affect competition in the management consulting industry. KM represents a fundamental and qualitative change in this industry's basic production technology. Because management consultants acquire information directly from their customers, for these firms, KM technology exhibits increasing returns to scale. As such, although KM clearly represents an opportunity for some consultants to build a sustainable competitive advantage, it is likely to lead to a shake-out. Based on the industry's early experience with KM systems, this article describes a number of possible future outcomes as well as strategies that consultants can follow.
To a growing number of companies, knowledge management is more than just a buzzword or a sales pitch, it is an approach to adding or creating value by more actively leveraging the know-how, experience, and judgement resident within and, in many cases, outside of an organization. Based primarily upon the results of a study of 431 U.S. and European organizations, this article describes what firms are actually doing to manage knowledge, what else they think they could be or should be doing, and what they feel are the greatest barriers they face in their efforts.
Recent developments in information technology have inspired many companies to imagine a new way for staff to share knowledge and insights. Instead of storing documents in personal files and sharing personal insights with a small circle of colleagues, they can store documents in a common information base and use electronic networks to share insights with their whole community, even people scattered across the globe. However, most companies soon discover that leveraging knowledge is actually very hard and is more dependent on community building than information technology. This is not because people are reluctant to use information technology, rather it is because they often need to share knowledge that is neither obvious nor easy to document, knowledge that requires a human relationship to think about, understand, share, and appropriately apply. Ironically, while information technology has inspired the "knowledge revolution," it takes building human communities to realize it.
A characteristic of the information age is the dramatic increase in expenditures by organizations on information technology (IT). As a result of these investments, managers generally anticipate productivity gains, which are commensurate with the costs of IT. However, several empirical studies in the 1980s and early 1990s found no statistical association between IT spending and financial performance (the productivity paradox, PP). One possible source of this paradox was proposed by Brynjolfsson [Commun. ACM (1993)]. He proposed that during the pre-1991 period, IT might have increased slack, but neither organizational output nor profits. We test whether the relation between investment and IT in the productivity paradox era was due to increased slack. We find that overall, IT investment led to an increase in slack in the period prior to 1991, but not after. Our results are primarily driven by manufacturing companies.
Predictions of the effects of office automation on organizations vary widely. This article focuses on changes in individual work patterns, management control, and organizational structure that may occur as a result of implementation of office technology. The most significant change predicted is that organizations will no longer be limited by a central office work environment operating between the traditional office work hours of nine and five. Computer and communications technology will facilitate the relaxing of those physical constraints as necessitated by social and economic pressures. Relevant research to date regarding the effects of the new technology on organizational behavior is reviewed. Management guidelines for preparing for the coming changes are included.