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1. KNOWLEDGE
MANAGEMENT AT
ERNST &YOUNGBY MARIAM RASHID

2. BACKGROUND & HISTORY
• John Peetz- Chief Knowledge Officer.
• John worked for improving the firms progress by implementing a
new vision for managing its internal knowledge resources.
• In 1992, ‘Knowledge Management’ had been identified as a key
component of Ernst & Young consulting corporate strategy.
• In 1997, firm made significant progress in establishing the
infrastructure and processes.
• Firm was classified as first to discover its ability to use its own
intellectual capital.
• These efforts captured the attention of Ernst & Young’s clients

3. MANAGEMENT CONSULTING
INDUSTRY
• In 1995, management consulting was estimated to be a 40 billion
dollar industry worldwide, with over half the market being in the
United States ($21 billion).
•Ernst & Young is one of the “Big Six” accounting firms which offers
management consulting services.
•Formed in 1989 with the merger of Ernst & Whinney and Arthur
Young.
• Ernst & Young offered accounting, tax, and management consulting
services.
•Offered smart people who wee capable of tackling a wide array of

4. Exhibit 1: U.S. Management Consulting
Revenues and Growth Rate by Segment ($ in
Millions, 1995)Generalist/Strategy CPA
• McKinsey & Co. $ 720 20% • Andersen Consulting $1,272 24%
• Booz-Allen & Hamilton $ 470 30% • Ernst & Young $1,050 27%
• A T Kearney $ 370 4% • Coopers & Lybrand
Consulting
$ 691 44%
• Gemini Consulting $ 216 -17% • Arthur Andersen $ 684 36%
• Bain & Co. $ 200 33% • Deloitte & Touche $ 655 33%
• Boston Consulting
Group
$ 175 13% • KPMG Peat Marwick $ 630 54%
• Price Waterhouse $ 166 -8%
Benefits Grant Thorton $ 65 67%
• Mercer Consulting
Group
$ 613 11%
• Towers Perrin $ 604 18%
• Hewitt Associates LLC $ 425 11%
• Watson Wyatt
Worldwide
$ 389 18%
• Milliman & Robertson $ 166 15%
• The Hay Group $ 110 18%
• Sedgewick Noble $ 67 -9%
• IBM Consulting Group $ 276 39%
• American Management
Systems
$ 235 24%
• CSC Consulting Group $ 230 15%
Information Technology

5. EMERGENCE OF
KNOWLEDGE MANAGEMENT
• ‘Knowledge Management’ describe how a firm acquires, stores
and applies its own intellectual capital
• In 1990, firms started appointing CKO to design KM system by
using the collective experience and knowledge of their
employees.
• The emergence of KM was the result of the rapid development
of IT industry.
• KM has become popular in every industry(production,
manufacturing, distribution, services).

6. KNOWLEDGE MANAGEMENT IN
CLASSIC STRATEGY
CONSULTANTClassic Strategy Consulting Firm(McKisney, Bains, BCG):
KM system is decentralized and their focus is on connecting people.
These firms were small and as a result consultants know each other.
They easily share their knowledge and respond quickly to request for
help from other consultant and project teams.
• Bain’s BRAVA
Provides an information system to link one consultant with another
anywhere in the world.
• McKisney & Company
Created ‘Knowledge Resource Directory’- yellow pages for firm’s topic
experts. The directory is compact and consultant can carry a copy easily

7. PROBLEM FACED BY CLASSIC
STRATEGY CONSULTANT
These were the formal and decentralized mechanism which resulted in
difficulty with rapid growth in term of increasing number of consultant and
geographical locations.
There arise an increased need to synthesize the entire firm’s wide range of
experience.
Solution:
• With the rise of IT, most of the firm have transitioned from having paper
based centralized libraries to on-line information networks.
• Utilizing technology to manage both internal and external information
flows.
Example- McKinsey, Bain having hybrid database, bulletin boards,

8. KNOWLEDGE MANAGEMENT
IN IT BASED FIRM
• Development of KM within these firms has been relatively centralized
and proactive.
• The focus of internal system was changed from ‘providing
methologies’ to ‘decision support’.
• Providing consultants with access to relevant internal and external
information to ensure they are working as efficiently as possible.
• System implemented people connection to offer assistance with insight
and intuition which are difficult to implement in formal system.
Example: Arthur Andersen, Xchange, Price Waterhouse’s Knowledge
View and Coopers Intellectual Capital System.

9. KNOWLEDGE MANAGEMENT
AT ERNST & YOUNG
PROACTIVE APPROACH:
•Managing The Development
•Capture, Storage
•Dissemination Of The Knowledge management

10. KNOWLEDGE MANAGEMENT
AT ERNST & YOUNG
IN 1980’s:
•CBT (Center For Business Transformation)
•MCIC (Managing Consulting Information Center)

11. KNOWLEDGE MANAGEMENT
AT ERNST & YOUNG
IN 1992’S:
To extend business:
•MCIC (managing consulting information consults).
•CBK (center for business knowledge).
•CBI (center for business innovation).

13. ERNST & YOUNG CENTER
FOR BUSINESS
KNOWLEDGE-CBK
• It was actually developed out of the MCIC
• Based in Cleveland
• Considered the core of Ernst & Young knowledge
Management System
• Responsible for gathering and filtering the firm’s
knowledge
• 200 professionals working at CBK

14. SERVICES OF CBK
• Knowledge navigation “call center”
•Business research
•Business analysis
•Knowledgebase administration
•Coordination of the knowledge networks
•Management of relationships with external information
vendors

15. ERNST & YOUNG CENTER
FOR BUSINESS
TRANSFORMATION CBT
• It is responsible for developing the technology
•CBT employs 120 people
•It develops methods and tools used by consultants

16. ERNST & YOUNG CENTER
FOR BUSINESS INNOVATION
CBI
•Based in Boston, is a sort of ‘’think tank”
•It is designed to bridge the gap between academic
leading edge thinking and more practical application
•It employs about 30 people
•Usually five research initiatives at any given time

17. KNOWLEDGE SME
NETWORKS
•Individuals with specialty in an area band together to
form knowledge networks
•12 people in a core knowledge network
•Knowledge networks are designed by the top
management
•Networks have responsibility of identifying new topics
•Responsibilities also includes designing the training
curriculum

19. THE EY/KNOWLEDGE WEB
•It is a basic interface between knowledge and
consultant
•Large document repositories(LDRs)
•Power packs
•EY/info link

20. ORGANIZATIONAL
INFRASTRUCTURE
•The culture at Ernst & Young has always been very collegial
•Historical performance evaluations were based on utilization
•Firm initiated a change in performance metrics
•Through the incorporation of these matrices and internal processes & use of
technical interference, John worked to make sharing easy
•In 1993 Phil Laskawy spearheaded a firm wide strategic innovation "Call to
action’’
•1995 Johan became Ernst & young’s first Chief Knowledge Officer.

22. CONTINUED INNOVATION:
THE “ERNIE” PRODUCT LINE
•In 1996, the Entrepreneurial Consulting Division launched online
consulting service called Ernie.
•Allows businesses to access Ernst & Young’s expertise (across
its accounting, tax and consulting business lines) via website.
•Subscribers have paid 6000$ per year to post questions to the
firms expert.
•Subscribers can get an answer within 2 business days.

23. CONTINUED INNOVATION:
THE “ERNIE” PRODUCT LINE
•The clients can access to updated database of frequently
asked questions.
•Access to custom designed news clipping service.
•Business research service
•Proprietary content
•Ernst & Young is the first consulting firm to utilize internet to
distribute its services.

24. CONTINUED INNOVATION:
THE “ERNIE” PRODUCT LINE
•It brought $1 million in revenue in its first six months. The reason
behind its successfulness is:
•The service runs on auto-pilot as it directs questions to consultants
using a database of business line/process/industry experts.
•Allows Ernst & Young to serve a market segment by increasing
number of potential clients.
•Allows consultant flexibility since they can answer the questions
wherever and whenever they want.
•250 organizations have signed up for the service.

25. CURRENT CHALLENGES
1. How much should Ernst & Young continue to invest in KM?
How should it measure the value of the KM system?
• A lot of investment in knowledge management has to be made
efficient measurement system are developed and implemented
because its difficult to measure the performance of knowledge
management system.
2. Can Knowledge Management be a sustainable competitive
advantage?
• CBI(Center for Business Innovation) offers a competitive
in its ability in detecting new business concepts- it can then

26. CURRENT CHALLENGES
3. Does the corporate culture support knowledge
management? Are incentives aligned for efficient
sharing?
•Whether Ernst & Young truly has open sharing culture
is essential to the optimal operation of Knowledge
Management system.
•Current resistance may be due to client confidentiality
mistrust that their information will be used correctly.

27. CURRENT CHALLENGES
4. Is the current system overwhelming? In what direction
should the system evolve overtime?
Consultants are overwhelmed with firms KM system given the
large number of databases available
consultants needs should be anticipated.
The system should deliver the information to consultants
before they know they need it.
Consultants must receive customized context- based
information.

28. CURRENT CHALLENGES
5) How to leverage Ernst & Young’s expertise in building KM
system?
Unique expertise must be provided that could be leveraged in other
industries.
6) How to achieve worldwide coordination of Ernst & Young’s KM?
As the firm grew global, the international practice needs to be
integrated in firms’ knowledge.
7) Looking Ahead… Global State ’02
In 1996, Young & Ernst developed its next generation strategy
known as “Global State ‘02”. The theme of this strategy is no
boundaries and idea is to expand the firm’s scope beyond

29. THANK YOU!