Close menu

The Importance of Knowledge Management for Consulting Firms

Victoria Fiorini
5 mins
business advisors in a meeting use knowledge management for consulting firms

As a consulting firm, knowledge is the lifeblood of your company. Because it can be fast-changing or tied to the expertise of individual people, you need a reliable way to keep track of all that information. Not doing so can cause your employees and clients to search helplessly and end up frustrated.

Since knowledge sharing is a crucial activity for consulting firms, everyone needs to have access to the same information. Without that, your workers can’t effectively leverage it, causing inconsistency. Clients won’t receive accurate information, which can harm your reputation and lead to costly errors.

That’s not a pretty picture to think about. But don’t worry: we have the solution.

Here’s what you need to know about knowledge management for consulting firms.

What Is Knowledge Management? 

Knowledge management (KM) refers to storing, organizing, and sharing your consulting firm’s collective knowledge and insights. That collection of internal and external knowledge sharing can then be transmitted within (between employees) or outside (from company to client) the organization. The best KM for consulting firms will be easy to access, navigate, update, and manage. 

The types of knowledge your firm will deploy:

Implicit knowledge — Implicit refers to the learned skills an employee discovers through real-life experiences, often without even realizing it. For new hires, this would be the information they bring to your consulting firm from their previous job experience. 

Tacit knowledge — Similarly, tacit knowledge is the knowledge your employees gain from experience, but they cannot easily document. Good examples of this would be a team member’s ‘natural talent’ or behaviors and instincts. 

Explicit knowledge — Explicit is the basic knowledge that sets the foundation for what you do. For employees, an example would be learning the basics of consulting in your organization (i.e., guides, how-tos, training manuals, etc.). For a client, an example would be an introduction to your consulting services. 

The Benefits of Knowledge Management for Consulting Firms

For consulting companies, knowledge is the product. So, knowledge management is a critical component of the business. A ResearchGate publication reported that consulting firms are more likely to leverage KM as a competitive advantage because the information created and shared within the organization represents the core service. 

Here are the additional benefits of knowledge management for consulting firms. 

Increases Collaboration

Not only do studies reveal that nearly 75% of employees classify collaboration as important, but connected teams that collaborate are also 21% more profitable. With the help of a knowledge management system, consulting companies can create a better learning space for employees to share their knowledge and expertise, answer questions, and contribute advice to client cases.

Improved Client Services

There are at least two ways you will improve client services with information systems:

  1. Internal knowledge sharing keeps all your consultants up-to-date on the latest and optimally prepared to give clients their best.
  2. External knowledge sharing allows clients to access important information regarding your firm and its expertise, like FAQs, how-tos, guides, etc. 

Since one study found that a shocking 82% of respondents wanted an immediate response to their company questions, leveraging knowledge management for consulting firms can help you effortlessly deliver.

Eliminates Duplicate Work

Duplicate work takes busy employees away from more important matters. It also wastes the company’s money and slows down productivity. Having a single source that everyone can reference ensures more than one employee doesn’t complete the same task. 

Education and Training

Knowledge sharing is a crucial part of any education and training. Although there will be plenty of formal training opportunities, it can be more beneficial for workers to access training and learning materials on their own time. This is likely due to most (58%) of workers preferring to further their education or training at their own speed. 

Improves Employee Efficiency

Less time spent searching for information means more time spent consulting or preparing for consultations with clients. Quick and easy access to important knowledge also ensures your staff is up-to-date and informed on all the latest in their specialty and practice. This, in turn, makes them more efficient at their jobs. 

Better Employee Engagement

When every team member in your organization has access to knowledge sharing, engagement improves almost immediately. This is because staff members feel closer to co-workers as they find meaning in sharing their experience and expertise and get value out of learning from others. 

A McKinsey study found that clear communication and regular access to information were the best way to stimulate employee engagement. Your staff can achieve both with the right knowledge management system. 

Ensures Knowledge Is Not Lost When Employees Leave

Most people think of the money lost when employees leave, but few stop to think about additional losses that are arguably more important: specifically, the employee’s knowledge. 

Without knowledge sharing, the unique perspective and insight an employee brings to your firm can be lost at the drop of a hat when they exit. Knowledge management systems eliminate that issue by giving employees a way to preserve their know-how throughout their tenure at the company. 

Increases Innovative Processes

Innovation is crucial to keeping your consultancy ahead of the competition. This is because it stimulates creativity, prompts new ideas, and keeps your consulting services and products fresh. 

Without it, you risk falling behind or being unable to differentiate your brand. On the other hand, knowledge sharing allows staff to exchange unique perspectives, views, advice, and ideas to enhance innovation. 

Examples of Knowledge Management Tools Used by Consulting Firms

There are many great tools when you leverage knowledge management for consulting firms. Here are our top examples. 

Collaboration Platforms 

Collaboration platforms allow employees to share files, documents, schedules, and more. This tool is essential in this industry because collaboration and knowledge differentiate your firm from others. Regular access to each other, especially within a platform that is easy to navigate and enables asynchronous collaboration, also benefits your staff in the following ways:

  • Saves time and resources
  • Improves communication
  • Encourages greater teamwork and alignment
  • Increases productivity and reduces downtime

Intranet

The intranet is a company’s private computer network that staff use to share information among employees. They can also use it to distribute announcements, updates, and other information that the workforce needs to stay informed. Major benefits for consulting firms include:

  • Better communication between internal teams and individuals
  • Helps staff locate important information
  • Connects in-person, remote, and hybrid staff members 
  • Streamlines communication

Video Conferencing

Video conference tools allow communication through video, as the name suggests. It’s a great way to bring together staff members who are not physically able to meet. 

Whether the conference is an update on best practices or an overview of a big client, meetings over video connect everyone without the typical limitations of phone calls or emails. In fact, some studies have shown that 87% of workers admit feeling more ‘connected and involved’ during video conferences, and 55% of companies say it increases employee engagement. 

Knowledge Bases

A knowledge base is a platform that stores answers and solutions to various issues–and allows people to find that information through a simple search. It’s a great way to connect staff members with important information and resources they need to consult their clients on a job. Among many benefits of a knowledge base, it also:

  • Reduces training and onboarding time
  • Increases productivity and engagement 
  • Reduces reliance on email for knowledge sharing
  • Empowers remote employees
  • Generates more revenue
  • Informs decision-making
  • Improves cross-functional collaboration

Portals

With portals, users have personalized capabilities through customization and integration of multiple sources. The portal is the source of reliable and trustworthy information about the organization, its practices, and the specialized consulting it delivers. Portals can either be employee- or client-facing.

For consulting firm clients, in particular, client portals can help streamline business processes and improve transparency between consultants and clients. Client portals allow clients to access shared documents and resources, track projects in real-time, and communicate with leading consultants assigned to their account. 

Enterprise Social Networks

Enterprise social networks are internal social networking platforms used for communication within the company. Considering an incredible 86% of employees and executives find the leading cause of their workplace failures to be a result of ineffective collaboration and communication, this tool can make a significant difference. More specifically, your staff will benefit from better cross-functional communication, a sense of belonging within your company, and access to an open knowledge repository.

Consulting firms need knowledge management to deliver excellent client experiences and avoid risks of errors, duplicated work, and knowledge loss. Knowledge management for consulting firms is also an essential component of remaining competitive. Interested in learning how a knowledge management platform can benefit your firm? Schedule a call with our team. 

October 25, 2022

The Ultimate Guide to a Modern Knowledge Management Strategy

Learn more about how to get started with a knowledge management strategy for your consulting firm.

Read Now

Subscribe to the Bloomfire Blog

Transform your business with exclusive strategies and data driven insights from Knowledge Management experts.