Knowledge Intensive Services' Suppliers and Clients

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These seem to be highly promising approaches to better understanding the
(changing) roles of KIBS – and perhaps to add some much-needed depth to analysis
of the knowledge-based economy.
3.2.2 Knowledge management in KIBS
Hansen et al (1999, pp108) argue that “because knowledge is the core asset of
consultancies, they were among the first businesses to pay attention to and make
heavy investments in the management of knowledge”. But some firms do
extensively use IT-based Knowledge Management systems. In a small set of case
studies of large US firms. Including health care services and especially
consultancies, Hansen et al, (1999) report on more established use of such systems.
They note two main successful use strategies, arguing that while a mixture of the
two is common in practice, companies have to decide to make the one most
appropriate to their core services the centre of their strategy. They suggest that a
balance of roughly 80/20 is effective.) The two strategies are:
• Codification. Information systems are established to enable rapid reuse
of information resources (presentations, templates, algorithms, etc)
developed by staff. Aim to reuse these assets many times, providing
minor variants of relatively standardised solutions to frequentlyencountered
client problems.This makes it possible for there to be
relatively many junior and few senior staff (associates and partners,
respectively), often working in large teams and generating large overall
revenues. Incentive structures need to reward contributions to the pool
of knowledge assets.
• Personalisation. Information systems are more oriented to facilitating
communication among members of staff, who typically work on
challenging problems with many new features, requiring bespoke or
highly customised solutions.Work is executed through high ratios of
senior as opposed to junior staff, working at high fees with a focus on
high profit margins rather than volume of business. Systems are
developed to allow individual expertise to be located and consulted (and
to exercise oversight) as appropriate. Incentive structures need to reward
contributions to other’s problem-solving.
In each case we might anticipate that the use of IT-based systems will lead to more
rapid internal diffusion of innovations in service products and processes. Whether
the codified strategy may suppress the original generation of innovations, however,
by encouraging reuse of earlier work and thus – while limiting needless redundancy