Knowledge Management: What It Means in Your Firm

By Roman H. Kepczyk, CPA, CITP

As an industry analyst for the accounting profession, InfoTech Partners North America, Inc. was asked to write the Knowledge Management section for the AICPA's e-MAP Handbook (Management of an Accounting Practice) as well as present a program at last month's AICPA TECH 2001 symposium. Through our research, we found that Knowledge Management is garnering acceptance within CPA firms, but the term means something completely different to every firm, as well as every person within the firm. So the question arises as to how firms can learn to define what knowledge management is for them and then focus on developing a knowledge management system that can effectively capture this knowledge.

A general definition of knowledge management systems could be an infrastructure that provides the right information to the appropriate people, at the time at which they need the information, regardless of their location, so they can make informed decisions. The difficulty arises in determining what is the right information. The examples and case studies we reviewed pointed towards identifying the knowledge the firm had which had the highest value, and then determining how to maximize the use of this information. Only then should firms look to the technology tools and infrastructure that would be used to share the information. Below, we discuss four questions to help you get started on determining what your knowledge management system should capture:

  • What unique knowledge or skills do we have as an organization that can provide a competitive advantage in our location or region? Firms must first identify their strengths or areas where they would like to develop competent knowledge. Most begin by looking at their profitable business services and niche practices where they have unique experience already garnering higher fees when utilized. An example would be a person that thoroughly understands the mechanics of a difficult calculation, such as the LIFO calculations that are performed within the automotive industry.

  • In what ways can we package and expand this information, so that its value can be maximized? At the completion of every project, firm personnel should be allocated time to analyze what they learned from the engagement, discuss how they could have improved upon the engagement and how this information could be applied to other engagements or future opportunities. The results of these meeting should be documented, including supporting schedules and processes, and other potential benefactors of the information should be identified. Continuing the automotive example above, a spreadsheet or database application could be developed so the calculations could be quantified and used on multiple clients. A listing of clients and prospects, will also help determine the potential value of this information if it were reused.

  • How can we capture the best way of using this knowledge, standardize it, and deliver it to our people with training, so they can effectively implement it in the shortest amount of time? Once the information can be procedurally captured in writing (also consider audio or video capture), it must be thoroughly tested on other client's engagements to ensure that the use of the information or process leads users to the appropriate results. This information should then be directed to the firm's training coordinator so training can be immediately scheduled. Any information that has the possibility of being made available to personnel outside the firm's workgroup, should be "sanitized," by removing specific client references and data to maintain confidentiality. If appropriate, the findings or process could also be turned into an article that can be used to publicize the firm's expertise. In the case of the automotive calculation, firm personnel would be shown how to use the database and directed when to use it. Additionally, the firm could look for other non-competing firms that would benefit from this knowledge and could either purchase a "franchise" or participate in the development of the knowledge tool.

  • What tools do we have available or can we acquire that can deliver the above information to our end users the most effectively? In many cases, the analysis done at the completion of an engagement can be turned into a white paper, procedural outline or tool, that can be used in training other personnel. This information and the supporting schedules should then be placed on a network directory, intranet, or the firm's groupware application to be re-used by firm personnel. Again, we want to stress that the information should always be captured first and the appropriate tools decided last.

As our firms move more towards a digital environment, the amount of knowledge that we have to maintain will increase dramatically. A firm's ability to effectively "farm" and "harvest" this information will determine its future profitability. For more information on selecting a system, please review our other articles on Knowledge Management.

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