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An oPERATions REsouRCEs PERsPECTivE on PRoduCT And sERviCE dEvEloPmEnT 303
Knowledge management technologies

In many professional service firms, such as management consultancies, service devel-
opment involves the evaluation of concepts and frameworks that can be used in client
organisations to diagnose problems, analyse performance and construct possible solu-
tions. They may include ideas of industry best practice, benchmarks of performance
within an industry and ideas that can be transported across industry boundaries. How-
ever, the characteristics of management consulting firms are that they are geographi-
cally dispersed and rarely are staff at their offices. The consultants spend most of their
time in client organisations acquiring knowledge day by day. Yet, at the same time, it
is vital for such companies to avoid ‘reinventing the wheel’ continually. Any means of
collectivising the cumulative knowledge and experience within the organisation must
greatly assist the development of new concepts and frameworks. Most consultancy
companies attempt to tackle this problem using knowledge management routines
based on their intranet capabilities. See the section on knowledge management in the
previous chapter. This allows consultants to put their experience into a common pool,
contact other staff within the company who have skills relevant to a current assignment
and identify previous similar assignments. In this way, information is integrated into
the ongoing knowledge development process within the company and can be tapped
by those charged with developing new products. 19
The significance of most of these development technologies is that they help to
reduce the impact both of uncertainty and complexity. Simulation technologies allow
developers to reduce their own uncertainty of how products and services will work
in practice. Similarly, knowledge management systems consolidate and juxtapose
information on what is happening within the organisation, thus presenting a more
comprehensive vision and reducing uncertainty. CAD systems also help to deal with
complexity by storing data on component details as they develop through various
interactions. The absolute size and interrelatedness of some large products requires
sophisticated CAD systems if they are to be developed effectively. One of the most
reported examples was the development of Boeing’s 777 aircraft. The powerful CAD
system used on this project was credited with Boeing’s success in being able to involve
its customers in the design process, allow more product configuration flexibility (such
as the proportion of seats in each class etc.) and still bring the huge project successfully
to completion.

The organisation of product and service development

Among the criteria that are used to assess the effectiveness of different organisa-
tional forms, two in particular are important to product and service development –
specialisation and integration. Specialisation is important because it encourages the
depth of knowledge and technical understanding that is required in a concentrated
form during the development process. Because of the (normally) finite time allowed for
product and service development, technical knowledge needs to be deployed in a con-
centrated manner during limited windows of opportunity. Clustering resources around
technical specialisms encourages the development of such concentrated knowledge.
Integration is important because both product and services are composed of smaller
components or subsystems. Coordinating the efforts of developers in different parts
of a project and integrating their technical solutions in such a way as to reflect the
market priorities within the development project is clearly an important aspect of any

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