The purpose of this study is a conceptual description of the implementation of knowledge management systems (KMS) as a mechanism for universities’ strategic development. Knowledge management (KM) practice from around the world proved the positive influence of KMS on productivity of educational institutions. The theoretical provisions and concept for KMS are determined based on an analysis of international experience of KMS use in higher education (HE). Theoretical provisions consist of 1) the staff activities as an object of KM and knowledge because of these activities, 2) the specificity of HE restrains a transfer of the KM mechanism from business to HE, and 3) the uniqueness of each university determines the structure and content of KMS for strategic development. The KM process in HE is reflected in the Socialization-Externalization-Combination-Internalization (SECI) model, where each stage contains a list of staff activities and a set of digital services. The novelty of the KM process model in HE is that knowledge flows in a wave, not a spiral. In this motion, knowledge passes from uncodified to partly codified and codified form. The study demonstrates that knowledge can go the from stage of partly codified to uncodified for revision, and knowledge flow can stop at any stage. The advantage of the concept we designed is the ability to control the flow of knowledge before it takes the codified form of a document. The digital environment for KM first allows management to control faculty activities at the initial stage of uncodified knowledge through measurement of activities, and then to estimate the knowledge flow itself. The gathered indicators help to make decisions to motivate or restrain faculty. The university management gets a complete picture of faculty activities with knowledge and the intensity of knowledge flow in training courses and educational programs.