KNOWLEDGE MANAGEMENT FOR ENTERPRISE SYSTEMS: OBSERVATIONS FROM SMALL, MEDIUM AND LARGE ...

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KNOWLEDGE MANAGEMENT FOR ENTERPRISE SYSTEMS:

OBSERVATIONS FROM SMALL, MEDIUM AND LARGEORGANIZATIONS

Knowledge Management for Enterprise Systems

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28 September 2010

Presented By:Ankit Luthra 06502922Ankush Sharma 0960907Namrata Mittal 09609145


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IntroductionEnterprise Systems have emerged as possibly the most important andchallenging development in the corporate use of information technology.Organizations invests heavily in these large, integrated application

software

Resource requirements in ES implementation and lifecycle widemanagement have traditionally restricted these applications to largeorganizations

ES vendors are now focusing on Small and Medium organizations withscaled-down ES

Both Large and SMEs face different type of issues and receive differentbenefits from ES


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Does Organizational size have any relation with the

existence ofInformation System success?

Studies investigating the impact of organizational size in relation to the

antecedents of Information System success

Paper attempts to minimize this gap by focusing on lifecycle-wideknowledge managementin small, medium and large organizations


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The number of employees in an organization has been employed as acommon tool to classify organizations.

Organizations are classified into:SmallMedium &Large

In the context of Enterprise System (ES), the classification of large,medium and small is similarly unclear.

ReviewonInformationSysteman

Organizationalsize


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After studying MIS, researchers have identified organization size as acritical variable

Organization size have greater importance because of its influence on:Resource availabilityRequirements necessary for integrationDegree of formalizationLead time for planning and implementation

Researchers recognized organization size as an uncontrollable variableand states that IS projects are less likely to succeed in SMEs

Small business are prone to : Software,Hardware, & Implementation problems


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It can be concluded form various researches and studies that firm sizeis:

Directly related to firms computer operations Inversely related to amount of external programming that arebeing used Directly related to portion of revenues allocated to Electronic DataProcessing (EDP) Inversely related to percentage of EDP costs that are used forpurchasing computer hardware

Considering application types:F

irstly it was found that small and mid-sized organizations place agreater emphasis on accounting and inventory controlFurther it was identified that inventory control software was highly

problematic in such organizationsThen, budgeting and inventory control were the primary uses of IS in

small organizationsKnowledge Management for Enterprise Systems

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A study of mid-sized organizations identified that user-friendlyinterfaces are a key factor for end users satisfaction

Investigation on IS acquisition in medium and large organization hashypothesized a positive relationship between firm size and softwaresophistication

Some researchers suggests that the resource constraints faced by SMEsmay hinder their ability to maintain technology up to date


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ReviewofKnowledge Management

LifecycleCreation Retention Transfer Application

Acquisition

Generation Capture

Storage Share

Disseminate Utilization

Use

These were the four phases common to all theinventors of knowledge Management.


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Knowledge CreationReplacing existing contentwithin the organizations tacit andexplicit knowledgebase.Required all throughout thelifecycle key players-consultants, vendorsand clients.The areas of concern before werecost, time ignoring external

parties.

KnowledgeTransferInformal meetings etc.,promotes socialization in small

orgs. But, prevents widedistribution.Formal training etc., widerdistribution of context specificknowledge.Formal training is imp. For

effective ES implementation.

Knowledge ApplicationImportant in maintenance andup gradation.Constantly evolving ES should beapplied to the real worldproblems.

Knowledge RetentionEmbedding knowledge fordeveloping persistence

Evolves through observations,experiences & actions.Failures can be led by StaffPoaching & Knowledge Drain.

KnowledgeManagementLifecycle


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Study Context2 organizations, belonging to a state Govt. in Australia running a marketleading Enterprise System for more than a decade.

199 ,state Govt. commenced Financial module across all state Govt. agencies(later Controlling, Materials Management and Human Resources also).

Homogeneous environment due to same ES software, similar versions, samephase of lifecycle with installed Financial Accounting and Controlling, MaterialsManagement modules.

Broad objectives of ES(1) support the Managing for Outcomes (MFO)framework and financial management improvement activities, (2)encouragebest practice for resource management, ( )consolidation of state Govt. financialinformation, (4) meet the business needs of agencies and ( ) achieve economiesof scale in main operations.


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PredispositionsA small agency that provided corporate services to agroup of other small agencies demonstrated theirdissatisfaction with the ES.

Senior management believed that the system was toocomplex and too expensive for a small organization,despite its richness in functionality.

After three years of using the implemented EnterpriseSystem, the agency decided to replace that with a locally-owned, small scaled ES.


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ClassificationofOrganizationsDiscussions with the strategic management in organization managing theES for other organization revealed that they employ the number of user

licenses to usefully classify organizations:

Small : Where the number of user licenses

below 200

Medium : Where the number of user licenses is in

between 200 999.

Large : Where the number of user licenses is

above 1000.

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Impactofsizeoforganizationonperceive

valueinthefourKM phases Knowledge Creation

The differences between thethree organizational sizes inrelation to the knowledgecreation items remainminimal.

Considering the knowledgewithin the client organizationat the time of the

implementation, the largeorganizations possessed moreinternal knowledge than thatof small organizations

There were no substantial

differences between the threeor anizational cohorts.

Descriptive Statistics of the KM Process

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Knowledge Retention

The mean scores descend with the declining organizational sizes.

The observed differences are then statistically tested using the pairedt-test, where the observations are confirmed at significance level .01.

The lack of planning and resources in small organizations retainnecessary knowledge for the lifecycle-wide ES-success.


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Knowledge Transfer The mean scores descend with the declining organizational sizes.

The observed differences are then statistically tested using the pairedt-test, where the observations are confirmed at significance level .01

Knowledge Re-use The issues pertaining to knowledge retention and transfer, theES-knowledgebase in small organizations remain relatively infertile.


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Satisfaction levels of three organizations

Despite the equal knowledge creation at the time of the

Implementation small organizations tend to face issues in relation toretaining, transferring and using knowledge throughout the ES-lifecycle.

Small organizations demonstrate lower satisfaction in theirknowledge management activities.

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Pathmodelofknowledgemanagement1



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The strength of the paths between KM activities duringand post ES-implementation and the overall goodness ofthe KM process:

The r-square of the overall goodness of KM process, decline with the

declining organizational sizes Larger organizations tend to explain the overall goodness using the KM

activities post implementation

The overall goodness of small organizations is still relying on theknowledge creation that had taken place

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Conclusions Enterprise Systems are well-suited for large organizations than small andmedium organizations. All organizations require a lifecycle wide knowledge management strategy to

reap benefits from Enterprise Systems.

Even with similar knowledge creation outcomes, small and medium sized

organizations demonstrated lower mean scores in relation to lifecycle wideknowledge management activities

Respondents from small and medium organizations reported lower levels ofsatisfaction towards the overall goodness of the knowledge management in theirorganizations.

Findings highlight the capabilities of small organizations to maintain a lifecycle

wide ES knowledge management strategy, even with the same levels ofknowledge creation at the time of the ES implementation.

Reasons behind incapability of small organizations:

Lack of adequate resources.

High reliance on external expertise in system implementation.

Lack of IT sophistication.

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28 September 2010 Knowledge Management for Enterprise Systems

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