17 November, 2003
Knowledge Management (US, NL, D)
© Beep Knowledge System and case owners, 2002-2003
Large scale project by International company to develop and implement an on-line knowledge management system using both Intranets and the Internet. Heavy initial investment has paid off.
Cases in Work and Skills
Executive summary of the case:
Timing of case
Kworld’s rollout began in 1999 and is still continuing in all major
KPMG locations across the world.
Geographic setting
The setting is international – with implementation in the US, UK,
Germany, Netherlands, Canada and Australia.
Type and use of ICT
Compaq hardware has been used for the required IT infrastructure and data
storage, while various Microsoft products have been used for online capabilities
including search facilities and messaging systems.
Main contributors
The main contributors are the software and systems’ developers and
architects responsible for the design and implementation of the various
Kworld components.
Main beneficiaries
The main actors are the 103,000 + employees of KPMG worldwide.
Background
KPMG has worked on knowledge management strategies since 1989. In June
1999, KPMG began the global rollout of Kworld, a knowledge management
system that integrated all of KPMG’s existing knowledge sharing network
and intranets on a worldwide scale.
Objectives
The aims of the Kworld system are to make significant time and labour
savings on information retrieval and research on news, products and clients
in addition to improving the quality of bids and proposals through an
enhanced quality of back up information
Resources (apart from ICT)
The initial upfront investment in Kworld was approximately US$60 million,
and the company spends 1% if its US$ 10 billion annual revenues, both
locally and globally, in ongoing management costs.
Activities
Kworld’s three main components are the external KPMG website with
company information and analysis; Kclient, the KPMG electronic collaboration
space, allowing employees to communicate with team members and clients;
and the X-tranet, KPMG’s employee-only Internet space that contains
accounts of experiences with clients, a database directory of firm members’
resumes and contact information, as well as storage of internal KPMG communications
and marketing materials.
Outputs and results
Kworld has already paid for itself in direct savings alone. The re-use
of technologies and processes around the world have saved not only time
but also money. KPMG can also both tender for and deliver solutions to
clients faster and more efficiently by drawing on the experience within
the firm worldwide.
Lessons and conclusions
The creation of appropriate rewards, recognition and compensation to drive
knowledge management is essential. Incorporating contribution to knowledge
sharing in employee evaluations is also beneficial. Assessing the worth
of information is important in helping to refine methods. A simple hit
count on information use reveals little about its worth; one needs to
know by whom and for what information is used.
Case description:
Background
KPMG is an accountancy, audit and tax consultancy firm that currently
employs more than 103,000 professionals providing services in 159 countries.KPMG’s
strategy has been to increase market share of accounting and consulting
services and to improve productivity to enable itself to gain the leading
position in the industry. In order to achieve this strategy, the firm
began three phases of Future Directions focused on major firm restructuring,
human resource management, and internal processes and technologies early
in the 1990s. KPMG’s knowledge management strategy was presented
formally in 1989 in the form of a proposal and a system prototype called
Shadow Partner. In 1991, Shadow Partner re-merged as Knowledge Manager
(KMan), the system for which was implemented using a commercially available
software package called FirstClass. The firm also developed Knowledge
Web (KWeb), a web based knowledge management system accessible to all
the firm’s employees. Capabilities included knowledge capture and
dissemination, access to internal and external databases, messaging and
collaboration tools.In June 1999, KPMG began the global rollout of Kworld,
a knowledge management system that integrated all of KPMG’s existing
knowledge sharing network and intranets on a worldwide scale.
Objectives
The aims of the Kworld system are to make significant time and labour
savings on information retrieval and research on news, products and clients
in addition to improving the quality of bids and proposals through an
enhanced quality of back up information. Various components allow interaction
with clients and, in this way, aim to provide a secure and real-time environment
in which to lever and manage knowledge in the firm for the benefit of
its clients, so providing a marketing differentiator.
Resources
The initial upfront investment in Kworld was approximately US$60 million,
and the company spends 1% if its US$ 10 billion annual revenues, both
locally and globally, in ongoing management costs. The investment included
capital outlays for hardware, software and the development cost of executive
and management time for planning and testing the system.
Activities
The rollout of Kworld initially started with the largest practices –
US, UK, Netherlands and Germany in June 1999. Australia was the fifth
country location to undertake implementation in October 2000. Kworld is
designed to offer the right information, when required, while in the office
or from a mobile computing location. It leverage’s the firm’s
collective thinking by providing:
- The knowledge and experience of KPMG leaders in the form of presentations,
white papers, best practice proposals, articles and other intellectual
capital.
- The tools required to serve clients: software, methodologies, professional
practice guidance and other firm standard documents and applications.
- The tools required by each employee to undertake their responsibilities: time reporting, human resources, travel services and other organisation websites.
It uses Compaq for its infrastructure and Microsoft products. Information stored and updated on Kworld is predominantly written in English, followed by German and Dutch. Kworld is made up of 3 components:
1. KPMG’s Website
This houses company information and analysis, accessible by anyone.
2. Kclient
This is KPMG’s electronic collaboration space, allowing employees
to communicate with team members and clients. To support this space, KPMG
has worked with Microsoft to find the most effective way to use Microsoft
Exchange 2000 Server, exploiting such features as the Web Storage System,
powerful search and indexing functions and security options. Earlier versions
of Kclient allowed KMPG teams to share information and collaborate internally
on large projects, publishing information to clients rapidly and efficiently
but not at the point of collaborating with them.
3.X-tranet
KPMG’s label for an Internet space that contains accounts of experiences
with clients and is accessible only by KPMG’s employees. There is
also a database directory of firm members’ resumes and contact information,
as well as storage of internal KPMG communications and marketing materials.
There is a news service about KPMG, its clients, and other topical issues
from Reuters, Dow Jones and other key sources. Intelligence is also provided
from OneSource, Lexis-Nexis, Gartner and other leading research services.
Additionally, there is the ability to send e-mail messages directly from
the knowledge management environment without operating a separate messaging
window. This X-tranet also has powerful search facilities for instant
and easy access to resources.
Content managers work with subject matter experts to decide on appropriate content for publishing, such as best practice proposals or letters and professional information. Client names and confidential information are removed from stored documents which are used as examples of best practice.
Output and Results
Kworld has become as fundamental to the organisation as an audit process
and has already paid for itself in direct savings alone. The re-use of
technologies and processes around the world have saved not only time but
also money. In addition, all of KPMG’s international manuals, policies
and corporate communications are now stored online in one secure spot.
By updating and publishing this information only once and eliminating
the need for multiple replications, the firm has been able to close down
major print and distribution centres, resulting in substantial cost savings.
It has also resulted in consistency because all of KPMG’s employees
around the world now view the same document.
Other less tangible benefits include the ability of KPMG to both tender for and deliver solutions to clients faster and more efficiently by drawing on the experience within the firm worldwide. Communications barriers have also been broken down between offices in different regions.
Lessons and conclusions
When adopting a knowledge management system, an organisation can run into
three major cultural problems. Firstly, some people do not like to share
their best ideas since they believe this may reduce their standing within
the organisation. Secondly, some people prefer not to use other colleagues’
ideas for fear that it makes them look less knowledgeable and dependent
on others to do their job. Finally, some people consider themselves to
be experts and therefore prefer not to collaborate with others. This mindset
has to be changed for true knowledge management to be successful. A cross-functional
team comprised of both creator and user of information is a useful way
of enhancing teamwork. Incentives are also a key component of cultural
change to knowledge sharing. The creation of appropriate rewards, recognition
and compensation to drive knowledge management is essential. Employee
evaluations can be an alternative way to encourage involvement –
online participation and contribution to knowledge sharing can be included
in the evaluation process If a business case needs to be made for investment
in knowledge sharing systems, it is useful to put in place processes that
measure how many times knowledge applications are used, that encourage
people to share their experiences and which can gauge how much these have
enabled others to improve service to clients.Assessing the worth of information
is a crucial step if a company wants to refine its methods or create a
reward system for the employees who have generated the ‘best’
knowledge. A simple hit count on information use reveals little about
its worth, since it is necessary to know who is using the information
(e.g. decision-makers) and for which purposes. The organisation that tackles
the valuation issue will have a head start in the employee incentive problem
and an edge on refining knowledge management processes for maximum profit.
References and links
‘Kworld -KPMG’s Knowledge Management System’ Management
Consultancy, 1 December 1999
‘Kworld- A Knowledge Management Case Study’ Natalie Southwood, Globaltechnology.com, 1 November 2000
KPMG Website (section on ‘Sharing Knowledge’)
www.kpmgcampus.com/campus/know/who/knowledge.asp
‘KMPG Peat Marwick US: One Giant Brain’ Hyanyong Kim (case study) www.cba.unl.edu/faculty/mgt/fnah/mngt950_spring99/cases/kpmg2.html
‘Turn knowledge into profitable power’ Keith Power, CFO Magazine,
May 2001
www.cfoweb.com.au/stories/20020501/14189.asp
‘The Knowledge Factor’, CIO Magazine, 15 December 1998
http://www.cio.com/archive/010199/know.html