KM & BI

These two apparently isolated areas are closely related for companies that provide services and mainly for the law firms.

Traditionally, “BI” is regarded as a tool in order to deeply understand the business, extracting from its figures the statistics that may give a sober analysis of how “things” are going; to show trends and to provide groundings to strategic decisions that will impact the future of the company. Perfect!

Now the Knowledge Management is a relatively new concept (mind you, I did not say a tool!), which involves more tacit information and less numeric or explicit than BI. In my humble opinion, however, I may say it represents a fundamental difference to obtain the strategic differential in the present and for the future, mainly to the providers of intellectual services and, again, especially to the law firms.

As it was already mentioned in (my) other previous articles, Knowledge Management is still beginning in most companies, being mixed up with drafts (repositories of document templates) or even disregarded to the condition of simple activities of document compilation, norms, templates, etc. and still as an activity under the exclusive responsibility of the libraries or the  CEDOC´s. A great mistake!

Knowledge management is “To deliver the correct information to the right professional in the shortest period of time”, according to the author Patrick DiDomenico and it is in this much more comprehensive definition that most of other dozens of definitions that “BI” becomes a very important ally.

We usually associate Knowledge Management to the following questions which it should answer:

– What is the best document I should use for this topic or solution to the challenge?

– Where is this document?

– Who prepared it?

– Who has the necessary knowledge to address the matter or the problem? And this one being the most difficult question to answer!

But, there are some other questions that are much more important under the viewpoint of pricing of their works and mainly a strategic one, which can only be answered with the combination of “KM” and “BI”!

Again, I am going to focus on the law firms, the combination of the information contained on the timesheets, on the previous invoices, on the clients’ record sheets and their respective cases and on GED (document electronic management), we can obtain statistic information that may answer much more complex questions, such as:

– how much time did a professional use to elaborate this said document?- – what documents are or were part of a given work?

– what “works” were performed in a given case or topic and by whom?

– what is the statistic distribution of the types of work per client, per case, per market niche that the company performs, per type of professional?

There are several other questions that can be answered, depending on the specific characteristics of the type of company, what are their habits, and what charging forms it is used to. And therein lies the danger:  The habit is the enemy of innovation!

By answering these and other specific questions, the ‘marriage’ between “KM” and “BI” can and should help the companies a great deal. (again the law firms):

– to improve their methods of elaboration of proposals and pricing of their works (substantially decreasing the “safety coefficient” that is inserted in all the proposals due to uncertainties);

–  to have a clearer vision of the efficiency of their sectors, teams or professionals (including per category), improving their assessment systems and “accountability”.

–   to better support the “cross-selling” decisions.

–  to support the strategic decisions of investment (in a broad sense, that is, efforts in areas, sectors, teams, contracting,  etc.).

And just to mention a few …

The help by an outsourced consultancy firm, that is experienced and is exempt from the internal interactions and relationships may really help a more effective and professional management of companies (mainly in challenging times like the current one).

José Paulo Graciotti, is consultant and founding Partner of GRACIOTTI ASSESSORIA EMPRESARIAL, engeneer by Escola Politécnica Universidade de São Paulo, with Financial MBA at FGV and specialized in Knowledge Mnagement by FGV. ILTA Member since 1998 (International Legal Technology Association) and ALA (Association of Legal Administrators), with more than 27 years managing Law Firms in Brazil – www.graciotti.com.br