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Request for Proposal: A Guide to KM Professional Services
Posted May 18, 2000
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Executive Summary

Many professional services firms today claim to be experts in knowledge management, so selecting the right one to help design and implement your KM project can itself be a challenging exercise. Because companies typically spend far more on consulting and system integration services than on hardware and software, the choice of services partner may mean the difference between a project success and failure

How should companies go about identifying the professional services firm best suited for their job? Unlike for technology products, there are few accepted metrics or evaluation criteria for selecting technology services partners. Too often, companies make choices based on insufficient knowledge of the options and inadequate research into the firms' competencies, vendor relationships and project experience.

To help user companies address this problem, Knowledge Management Magazine surveyed a sampling of strategic consulting firms about their KM practices and offerings. This is not a comprehensive review of all options but a first look at the range of options available. Nevertheless, at least one conclusion became clear: The field for KM consulting services is broad and growing.

Project Scope

KM services providers run the gamut from high-end strategic business consultants to global and regional systems integration houses to specialized technology implementers. According to Mary Ann Hedin, research analyst at International Data Corp. in Framingham, Mass., most user organizations should look for KM consultants that have expertise in both business and technology. Unlike some other IT service requirements, knowledge management addresses a strategic need of organizations, and therefore it makes sense to select a consultant that is equally conversant with strategy and technology, she says.

We looked closely at the most concentrated sector of KM expertise- -the so-called Big Five accounting firms, each of which also has substantial offerings in technology consulting. According to Andrew Parker, an analyst at Forrester Research in Amsterdam, the Netherlands, this sector is undergoing a significant shift in its business model. "The Big Five firms have been wedded to the [financial] partnership model since the 19th century, but now regulatory pressures and commercial imperatives are causing them to reorganize. Reinvention of the consulting groups of the Big Five will give large businesses the support to move forward aggressively on e-business," says Parker

Among the Big Five, we covered Arthur Andersen, Ernst & Young, PricewaterhouseCoopers and KPMG. (Deloitte Consulting, a unit of Deloitte Touche Tohmatsu, also offers KM-related services.) We also looked at Andersen Consulting, which differs from the others in that it is not affiliated with an accounting practice, and IBM Global Services, representing the market segment consisting of the services arms of major technology providers. To round out the picture, we included one of the classic strategic management consulting firms, Bain and Company; two long-established, operations-oriented firms, Arthur D. Little and A.T. Kearney; a strategic IT integrator, Renaissance Worldwide; and a more tactical IT services firm, Teltech Resource Network.

While there is some commonality among the services offered, each firm has developed its own spin on KM. Some firms started implementing KM (at least on an internal basis) during the early 1990s, while others are relatively new to the practice. Some firms target knowledge management as a specific practice area, while others include it in broader services focused on e-business or another strategic approach. Nearly all of the firms reviewed here have both internal and external KM practices. While our focus here is on the external offerings, we also weighed some of the larger internal efforts, which may have carry-over benefits for clients.

Project Cost

Project costs for a KM engagement can range from $50,000 for a simple one- to two-week diagnostic to a multiyear effort costing more than $5 million, according to IDC's Hedin. She pegs the typical assignment cost at $1 million to $1.5 million.

Deliverables

Just as there is no single knowledge management technology solution, nor is there a one-size-fits-all option for KM services. Each consultancy offers unique client value. "Although there are many good examples of those that have gained impressive results from KM, there are no guarantees that such a program will provide a winning solution," says IDC's Hedin. "The caliber of the outside expert selected is, however, critical to successful implementation."

Says Forrester's Parker, "Despite globalization, it's important to take into account regional strengths and weaknesses. In Europe, for example, the KM consulting leaders are different from those who are strong in the United states."

While engaging a KM consultant is not a straightforward decision and is in many ways a subjective matter, the analysts offer some general tips to help the potential buyer make an appropriate selection.

First, define your problem from a business point of view, then decide how KM enters into the business equation.

Consider the issue of buy-in. Will the consultant work side-by-side with your staff? Is the consultant more oriented toward management or the grass-roots level?

Does the consultant have expertise specific to your industry? To the relevant functional area? To the geographic region or culture? To your particular process? To the e-business implications of your solution?

Look for a match across the spectrum, from strategy to implementation. Does the consultant understand process, organization and people? Can the consultant assist with both current implementations and future technology recommendations? Are you better off with a full-service provider or a specialist?

What investment in KM has the firm made within its own organization? How does that investment benefit clients? How well can the consultant explain and demonstrate these benefits?

With these points in mind, continue to look inward to your own organization's processes, markets and business challenges. And remember, as in any relationship, what you get out of a knowledge management consultant's expertise and capabilities will be reflected by what your company puts into the relationship.

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