Knowledge management in small and medium sized professional accounting firms: Progress and challenges
Business and Public Management
For professional service firms, their main assets are intellectual not physical. The core business of these firms is to provide highly developed knowledge-based services to their clients in return for professional fees. Recent developments such as deregulation and the changing nature of services [ACSI98] has increased competition in the services market place. “Thus, it makes sense that managing those assets effectively is now looked at as a vital aspect of maintaining competitiveness” [Davi98,11]. Innovative firms are able to gain competitive advantages through adopting Information Technology (IT), including Knowledge Management (KM) systems. The interest in KM is readily apparent in the professional accounting sector. At present the concept appears to have been embraced mainly by the larger or so called ‘Big’ firms, as they increasingly look to the use of IT to support the creation and dissemination of knowledge about their international clients between global offices [SiGr98]. The emergence of new IT, mainly in the form of the Internet and World Wide Web, however is providing increasing opportunities for the majority of professional accounting firms, who are of a small and medium size, to share in the benefits that KM systems can provide. The purpose of this paper is to evaluate the current interest in KM among small and medium sized professional accounting firms. The aim of the paper is to provide an assessment of where these firms are currently at, to identify strategic issues and opportunities to increase knowledge and thereby their competitive position, and to provide an analysis of where they and future research may be heading. This objective will be achieved by examining the suitability of enabling technology and related organisational and client service issues in theory and practice. As will be discussed later in the paper, they were regarded the driving forces in the move towards effective KM.