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The role of organizational knowledge management in successful ...


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  1. 1. Knowledge-Based Systems 21 (2008) 920–926 Contents lists available at ScienceDirect Knowledge-Based Systems journal homepage: The role of organizational knowledge management in successful ERP implementation projects Ramin Vandaie * DeGroote School of Business, McMaster University, Hamilton, Ont., Canada L8S 4M2 a r t i c l e i n f o a b s t r a c t Article history: Special attention to critical success factors in the implementation of Enterprise Resource Planning systems Received 26 April 2006 is evident from the bulk of literature on this issue. In order to implement these systems that are aimed at Received in revised form 27 May 2006 improving the sharing of enterprise-wide information and knowledge, organizations must have the capa- Accepted 13 April 2008 bility of effective knowledge sharing to start with. Based on a review of the literature on the knowledge Available online 20 April 2008 management in enterprise system implementation projects, this paper identifies two major areas of con- cern regarding the management of knowledge in this specific type of projects: managing tacit knowledge, Keywords: and issues regarding the process-based nature of organizational knowledge viewed through the lens of Enterprise system implementation Organizational knowledge management organizational memory. The more capable an organization is in handling these issues, the more likely it Process-based knowledge is that the implementation will result in competitive advantage for the organization. The competitive Tacit knowledge advantage arises from the organization’s capabilities in internalizing and integrating the adopted processes with the existing knowledge paradigms and harmonizing the new system and the organizational culture towards getting the most out of the implementation effort. Ó 2008 Elsevier B.V. All rights reserved. 1. Introduction cessful outcomes only if it is accompanied by the evolution of human capabilities to understand the implications and handle In order to be able to respond to the fast-changing business the consequences of the new system and business processes environment of the contemporary markets, enterprises have felt defined for it [34]. Enterprise system as a technology is designed the urgent need to integrate business functions into a single sys- to enable firms to better manage their knowledge by integration tem. Such solutions often referred to as Enterprise Resource Plan- of business processes and have better control of information and ning (ERP) systems, efficiently utilize information technology, data in the organization. Ironically, to implement the technology and enable the internal sharing of data and information as well that is aimed at improving the sharing and integrity of information as the required communication with third-party vendors and cus- and knowledge in the firms, organizations must have the capability tomers [18,27,15]. ERP systems focus on the integration of business of effective knowledge sharing to start with [10]. The knowledge functions throughout the entire enterprise by facilitating the flow required during enterprise system implementation includes a vari- of information across the line of the business processes as they ety of expertise, experiences and skills and therefore cross-func- cross the departmental boundaries. ERP systems run off a single tional and cross-divisional transfer of knowledge is necessary to database and enable various departments to share information ensure that the requisite enterprise system knowledge is available and communicate with each other. for a successful implementation [2]. ERP implementation is so Given the high risk of failure associated with enterprise system knowledge-intensive that the fate of the whole project is in hands implementation projects [30,26] special attention to critical suc- of a group of knowledgeable employee from across the organiza- cess factors in enterprise system implementation is evident from tion and success of the project relies heavily upon effective man- the bulk of literature on this issue [14,3,33]. These success factors agement of knowledge into, within, and out of this team during range from technical know-how and expertise to people and orga- enterprise system life cycle. Implementation team members are, nization management skills required during a typical enterprise by definition, knowledge workers [5] who put their experience system implementation project [8,15]. Optimal implementation and knowledge into work, are influenced by the knowledge they of enterprise systems requires attention to the technology as well gain during the enterprise system project, and become more valu- as people [27,13,17]. Developing the technology side of an enter- able for the organization as they grow more and more knowledge- prise system to cover all organizational processes can lead to suc- able about the new system [23]. ERP knowledge does not reside exclusively on the supply side, * Tel.: +1 905 525 9140x26179; fax: +1 905 521 8995. nor can it be transferred directly to the user organization. Rather E-mail address: this knowledge is dispersed within the organization (across func- 0950-7051/$ - see front matter Ó 2008 Elsevier B.V. All rights reserved. doi:10.1016/j.knosys.2008.04.001
  2. 2. R. Vandaie / Knowledge-Based Systems 21 (2008) 920–926 921 tional divisions, work groups, etc.) and outside the organization systems in facilitating the management of organizational knowl- (with consulting partners or software vendors) [20]. During a suc- edge [7,31]. cessful ERP implementation project this knowledge must be com- From the epistemological perspective, knowledge is known to bined and integrated and transformed into applicable knowledge be either tacit or explicit. Explicit knowledge refers to knowledge [21] in the particular context of the project. Typically this is that is transmittable in formal, systematic languages. Tacit knowl- achieved by setting up a team to evaluate the existing solution edge on the other hand is personal, context specific, and therefore and then design and implement the chosen system. By mapping hard to formalize and communicate. Assuming that knowledge is existing organizational process, identifying processes embedded created through the interaction between tacit and explicit knowl- in enterprise system package and defining new organizational pro- edge, Nonaka and Takeuchi [21] introduced their spiral of knowl- cess that fit both the new systems and the organization, the ERP edge creation in which knowledge contents interact with each implementation team configures the package to suit the organiza- other to interchange from tacit to explicit or vice versa. The hierar- tional context. Disperse, function-embedded, and process-oriented chical view of knowledge which includes Data, Information and knowledge must be gathered and combined with the knowledge Knowledge in the ascending order of complexity is widely embedded in the ERP package. Therefore knowledge needs to flow accepted. Data is the raw facts which are processed to become among team members, and between team members and other information. Authenticated information by human perception is organizational members or external consulting staff. Fundamen- considered to be knowledge. In practice, what organizations actu- tally, successful completion of these activities will depend on ally manage under the name of knowledge management, is a mix how well the ERP-specific knowledge is handled and managed to of knowledge, information and data; so, as we see, it is very diffi- ensure the access to requisite knowledge whenever, wherever, cult to distinguish between these different dimensions of knowl- and by whomever it is needed. edge in real world experiences [4,7]. The hierarchical nature of Based on a review of the literature on the knowledge manage- knowledge is also reflected in knowledge management initiatives. ment in enterprise system implementation projects, this paper Organizations focusing on data and information levels, are more identifies two major areas of concern regarding the management likely to choose approaches involving data warehouses, statistical of ERP knowledge. The first area concerns the effects and implica- analysis and other similar tools; while focus on knowledge level tions of the tacitness of a great portion of ERP-specific knowledge. normally leads to initiatives like communities of practice [1]. The The challenge of tacit knowledge sharing is partly due to the fact understanding of this characteristic of knowledge as well as recog- that the process knowledge is by and large routinized so that nizing the tacit or explicitness of knowledge residing in the minds employees may be subconscious about the separate steps which of individuals or in the collective organizational memory, act as a are gone through in the process and have difficulty expressing basis in determining the type of knowledge management strategies it explicitly. When any of these employees are selected as the and initiatives for an organization. ERP implementation team member, the need for communicating All in all, identifying what is meant by knowledge for an orga- this type of knowledge is magnified. Based on the process-based nization is the first step. It is the next step, however, which is nature of this type of knowledge, the second area examines the the challenge; namely, what can be done to improve the creation, application of organizational memory in ERP knowledge manage- storage and dissemination of knowledge in organizations. Next, the ment. Organizational processes embed substantial knowledge of issue of identifying the characteristics of knowledge in the specific the organization’s history and paradigms and since this knowl- context of enterprise system implementation projects is discussed edge is not confined to a specific mind’s cognition and is stored and a knowledge-based view of ERP projects is presented. in form of processes, it can be regarded as the organizational memory. Viewing the ERP knowledge from the lens of organiza- tional memory has certain implications for managing the knowl- 3. Knowledge-based view of ERP projects edge in these projects in terms of its enabling or impeding factors in enterprise system projects which makes it an interesting issue Enterprise system allows companies to have a convergent and to consider besides the important problem of tacit knowledge integrated view of the organizational information by means of sharing. This paper begins with general definition of organiza- centralized databases and integrated business processes across tional knowledge and knowledge management and transitions the lines of different divisions and departments [9,23,19]. It could into ERP-specific knowledge management issues. Enterprise sys- be said that as the result of enterprise system implementation the tem tacit knowledge sharing and organizational memory perspec- organizational information and knowledge converges across dif- tive of ERP knowledge are discussed following the definition of ferent divisions and departments on an organization-wide scope. basic concepts and are followed by conclusion and discussion of IT experts need to know more about the business processes and these identified issues. business process experts need to leverage their knowledge about the IT systems in place in their organization. Eventually, the over- 2. Organizational knowledge and knowledge management lap between the knowledge of different divisions increases and the knowledge on the organizational scale follows a converging Although the concept of knowledge has been addressed by pattern. However this convergence on the organizational level scholars for a long time, the concerns about managing organiza- tends to turn into divergence as we move down to the individual tional knowledge has been introduced and gained spectacular level [2,17]. A broader knowledge of the organization is required acceleration during the last few decades [28,1,6]. This ‘‘knowl- for end users of enterprise system systems compared to the tra- edge wake” has taken special advantage from the overwhelming ditional legacy systems that were adapted to each island of auto- advances in information technology, such that design and imple- mation. As the view changes from task-focused to the process- mentation of information systems in support of organizational focused by implementing enterprise systems, employees need to knowledge management has found an established ground in know how their task fits into the overall process and how that Information Systems research [1,24]. Yet, designing information process contributes to the achievement of organizational objec- systems to support knowledge management initiatives is impos- tives. For example, an employee working in customer billing sec- sible unless an understanding of the nature and types of knowl- tion will need to know more about the IT systems as well as other edge in organization exists. Such an understanding is a key business areas such as production and accounting. Similarly, the element in formulating and analyzing the role of information IT experts need to know more about different subject areas to
  3. 3. 922 R. Vandaie / Knowledge-Based Systems 21 (2008) 920–926 adapt the new system to their requirements and configure the 5. Knowledge management and enterprise system, enterprise system to operate optimally. Therefore, as the organi- contradictory or complementary? zational view of knowledge regarding the tasks and processes that are conducted in the organization tends to converge by the Considering simultaneous implementation of enterprise system use of enterprise system, the individual knowledge must diverge and knowledge management systems in organizations implies to accommodate for the changes posed by enterprise system some sort of contradiction by its nature. Enterprise systems are implementation [2]. One major implication of such a view of meant to increase the organizational efficiency by enhancing the enterprise system projects is that knowledge sharing needs to information processing capability of the enterprise [15,19]. This be significant across organizational boundaries to allow for the capability enhancement is enabled by the systematization and cen- maximum sharing of observations and experiences among tralization of information management and the adoption of stan- employees from different organizational divisions with different dard approaches to the codification and processing of mindsets about how the business is done along the line of pro- information. On the other hand, Knowledge management initia- cess. Knowledge sharing in enterprise system projects exists tives aim at mobilizing the knowledge through organized knowl- along different lines of interaction among organizational mem- edge repositories of explicit knowledge and communities of bers, ERP team, and external consultants which echoes the need practice as a means of sharing and creating tacit knowledge, having for improved knowledge sharing along different organizational their overall focus on improving innovation capabilities by increas- dimensions and in different levels of engagement with the imple- ing flexibility [4,7,24]. While it is traditionally believed that it is mentation project. Next section reviews different lines of ERP- impossible for an organization to focus on both efficiency and flex- specific knowledge sharing in more details. ibility, Newell et al. [19] show, by analyzing a case, that enterprise system and knowledge management initiatives are complemen- 4. Different lines of knowledge sharing in enterprise system tary rather than contradictory. Assuming enterprise system sys- projects tems as integrated databases of organizational information and explicit knowledge as opposed to knowledge management initia- ERP team is the center of activities in every ERP implementation tives being methods of managing tacit knowledge, their findings project [23,12]. This team is in charge of implementing enterprise suggests that a balanced perspective of enterprise system and system in multiple stages beginning with the examination of the KM systems can assist in exploiting explicit knowledge as well as current business processes (referred to as the ‘as is’ phase), fol- exploring and sharing tacit knowledge simultaneously. In other lowed by identification of the gap between the ‘as is’ status and words, utilizing the respective strength of enterprise system and the ‘to be’ status which is determined by the best practices KM in tandem enables the alignment of organizational capabilities included in the enterprise system package. The final step of the in information processing, knowledge exploration and exploitation ERP team’s mission is installing the new processes and training [19]. the users to use them without getting stock or crashing the new Knowledge management techniques are used over the course of system [12]. The members of this team come from different enterprise system implementation and during different steps of departments carrying the knowledge which is specific to their implementation projects to facilitate this knowledge sharing [8]. department and as part of mapping organizational business pro- Detailed view of how knowledge of ERP project members evolves cesses, is required to be shared with other members of the team. during these different stages is discussed next. Therefore one major part of knowledge management in every implementation project deals with facilitating the sharing of knowledge among members of the ERP team [2,16,5]. 6. Knowledge management in enterprise system life cycle In addition to the group knowledge sharing, the enterprise sys- tem team also has a great deal of communications and interactions Knowledge management can assist the adopting companies and with end users and user managers to both become aware of their the consulting firms through different stages of the enterprise sys- expectations of the new systems and keep them informed about tem life cycle. On a general view, enterprise system life cycle the changes that might occur after the implementation. Since the involves selecting, implementing, and using the enterprise system sharing of knowledge in this level is directly influenced by the [22,23]. In selecting stage, knowledge management systems could users’ capability of handling the changes in roles as a result of be designed to organize the information regarding different types the new system [3,13], this part of enterprise system knowledge of enterprise system packages so that firms looking for an ERP management must be incorporated into the change management package can compare and choose the one that best fits their orga- strategy of the organization. nizational context and fulfills their requirements. The implementa- A third line of knowledge sharing is between the ERP imple- tion stage of enterprise system life cycle is characterized by the mentation team and the consulting firms hired to convey their pro- occurrence of various problems in design and practice of the new fessional knowledge of the selected enterprise system package into system [16,27,30] and keeping an organized record of these prob- the organizational [23,26]. The knowledge that team members lems along with their tested answers is a valuable resource for seek from the integration partner is not restricted to the manuals every enterprise system implementation effort. In the using stage and the documented information about the package. Thus, it is issues range from compliance of the data plugged into the system important for the consulting staff to work side by side with enter- by the standard settings of the software for data entry to configur- prise system team members so that they can learn what is hard to ing the system to generate the desired output reports [25]. Avail- document as instructions and manuals [11]. ability of knowledge management systems that provide the Facilitating knowledge sharing requires adopting knowledge accurate and timely information for such issues seems to be a management initiatives along with the ERP implementation pro- necessity for every adopting organization. jects. But the simultaneous implementation of knowledge manage- In all stages of the enterprise system life cycle, the part of the ment initiative and enterprise system might have certain knowledge which is hard to capture and document (i.e. the tacit complexities. Next section discusses different views stated in the knowledge) can not be organized using formal knowledge reposi- literature on the issue of contradictory or complementary effect tories [28,10] and the knowledge management techniques facili- of having KM and enterprise system initiatives in place at the same tating the access to this type of knowledge differ in nature from time. the explicit knowledge management systems [22]. The challenge
  4. 4. R. Vandaie / Knowledge-Based Systems 21 (2008) 920–926 923 of tacit enterprise system knowledge sharing is partly due to the The next step is to merge the non-canonical processes underlying fact that the process knowledge is by and large routinized so that system with existing culture in the organization to complete the employees may be subconscious about the separate steps which knowledge transfer process. The integration phase, however, may are gone through in the process and have difficulty expressing it not be as easy as the implementation phase since the new values explicitly [10]. When any of these employees are selected as the may conflict with the old ones [27]. These conflicts may reflect enterprise system team member, the need for communicating this as the resistance to change among employees which in turn will type of knowledge is surfaced. Transferring the experiences gained deviate the implementation process from its planned desired out- during enterprise system project from and to the members who comes. Internalization of the non-canonical processes increases the transition on and off the enterprise system team, transfer of exper- appreciation for the new values in the organization and mitigates tise from external consultants to the enterprise system team mem- the negative effects of the organizational resistance [3]. bers, and transferring the contextual knowledge of enterprise Distinguishing the implementation and integration phases system which could help users to better understand the underlying provides an initial explanation for the basic question of how assumptions of the enterprise system are among other challenges companies can gain competitive advantage from ERP system if posed by the tacitness of ERP-specific knowledge [28,23,10,17]. the competitors use the same standardized set of best practices Due to the significant emphasis of the literature on the issue of ta- [2]. The implementing of best practices is the common part cit knowledge management in ERP projects, following sections re- which has almost the same implications for different organiza- view this subject in deep and discuss different methods adopted by tions. The competitive advantage arises from the organization’s organizations to face its complexities. capabilities in internalizing and integrating the adopted pro- cesses with the existing business values and harmonizing the ERP technology and the organizational culture towards getting 7. Managing the tacit ERP knowledge the most out of the implementation effort. Part of this capability could be in the form of restructuring the organizational roles in Two different categories of business processes have been iden- order to increase the cross-functional knowledge transfer and fill tified in the literature: canonical and non-canonical [2,17]. Canon- the gap between the knowledge base of employees and the ical processes are the abstract representation of the organization enterprise-wide knowledge requirements of the system [16]. and they map complex tasks to a set of simple canonical steps. Therefore, it is reasonable to assume that the competitive advan- Non-canonical processes refer to what actually happens during tage in adopting enterprise system relies mainly on the tacit the work and represent informal processes governed by communi- knowledge handling capabilities of the organization. Next section cation and interpersonal relationships used for getting advice for reviews the different areas where necessities for tacit knowledge on-the-job practices [2]. One implication of identifying these two sharing exist in every ERP project and classifies them according types of business processes is that the transfer of ERP knowledge to their idiosyncrasies. also should be considered from a two-dimensional perspective. The reference models or best practices in ERP packages are canon- 8. Tacit knowledge sharing in enterprise system projects ical processes which are explicitly coded and represent the explicit part of the knowledge transfer in enterprise system projects. These Enterprise system as a technology is designed to enable firms to best practices are reference models for the chains of activities better manage their knowledge through effective knowledge shar- which are adopted by the organization implementing the system. ing as a consequence of tight integration of processes and better However, the knowledge transfer is not limited to this explicit control of information and data [10]. Ironically, to implement the dimension and ERP systems are not just pure software packages technology that is aimed at improving the sharing of knowledge which can be tailored to the organization [30,10]. In fact, in addi- in the firms, organizations must have the capability of effective tion to the cleanly codified procedures, they also entail non-canon- knowledge sharing to start with. It may appear at first that the ical processes related to organizational dimensions that affect the knowledge required for enterprise system implementation can ways in which business is carried out throughout the organization easily be codified and distributed along with the ERP package since and influence the company’s strategy and culture. Therefore, it is basically a set of transaction processing systems. However implementation of enterprise systems includes the transfer of ex- knowledge sharing during ERP implementation involves more than plicit as well as tacit knowledge of business processes. just communicating how different procedures and modules of the Transfer of the explicit part or the codified business processes to enterprise system operate [16,28,10]. It requires that organiza- the adopting organization is part of the standard ERP implementa- tional members, especially those who are in the core implementa- tion procedure and generally does not pose much complexities tion team, have a clear understanding of the underpinning [23]. However, transferring the tacit part of this knowledge urges assumptions of the system as well as the environment of the for intimate communication and informal relationship between adopting organization. Only when this kind of tacit knowledge is the source and the recipient of knowledge [28]. Such kinds of rela- integrated into the implementation effort, the organizational tionships are limited in enterprise system implementation projects members will start to appreciate the value of enterprise system and as a consequence, the adopting organization’s capability to ad- and this integration is one of the most difficult phases in every just the existing organizational norms and culture to the implicit ERP implementation [16]. fundamentals of new business processes plays an important role The challenge of tacit knowledge sharing is partly due to the here. In other words, implementing the best practices changes fact that the knowledge needed to make processes work may the way business have been conducted for a long time and suffi- have become so routinized that the performing employees may cient understanding of the proper actions to face this change is not be conscious about the separate steps which are gone through not possible just by installing the system and its components. in the process and have difficulty expressing it explicitly [10]. By focusing on the transfer of explicit and tacit knowledge dur- When any of these employees are selected as the enterprise sys- ing enterprise system implementation, this process can be divided tem team member, the need for communicating this type of into two separate phases: implementation and integration[2]. knowledge is surfaced. The knowledge that team members need Implementation phase refers to implementing the canonical pro- for enterprise system project is more diverse than the knowledge cesses of best practices provided in the ERP package which are required for their jobs and is mainly in the form of know-how comparatively easy to transfer and map into the organization. and individual experiences. Therefore, facilitating the sharing of
  5. 5. 924 R. Vandaie / Knowledge-Based Systems 21 (2008) 920–926 tacit knowledge exhausts a great part of the implementation 9. Process-based nature of ERP knowledge through the lens of team. organizational memory Tacit knowledge sharing can be classified into different catego- ries [10]. First category concerns the knowledge sharing within the Organizational processes embed substantial knowledge of the ERP team and among team members. The team must also interact organization’s history and paradigms that can be brought to bear with other organizational members to gather information about when making decisions in ERP projects [29]. As a matter of fact processes across the enterprise and also to keep them informed they can be regarded as the organizational memory since they about the progress of the project and its effects on their jobs. Exter- are not confined in a specific mind’s cognitions and are stored nal consultants are also an inseparable part of every ERP imple- in form of processes [17]. Process modeling is used to translate mentation project and therefore, knowledge sharing, especially in process knowledge into models that can be used to configure tacit form, exists between the members of the enterprise system the enterprise system and adjust the organizational processes. team and the external consultants as well. This is especially impor- One important issue in enterprise system implementation is tant since normally the consulting team leaves the firm after a determining the extent to which organizational processes need while and it is up to the ERP team to salvage the knowledge trans- to be changed to fit into the enterprise system framework and ferred by them into the organization [20,22]. Retaining the knowl- the extent to which the enterprise system must be customized edge after the transition of the knowledge owner is also an to address existing routines in the organization. The process important issue when members of the enterprise system team knowledge and paradigm in the firm may not necessarily be the leave the team for whatever reason at various phases of the enter- same as the one incorporated within the enterprise system [23] prise system project. New members can not catch up with what and if this mismatch is not reconciled, it is expected that the the former member left just by reading the manuals and docu- ERP implementation will be sub-optimal. One way of approaching ments of the project since a major part of the enterprise system this issue is to have a clear understanding of the underlying knowledge gained by the former member was in tacit format. structure and organizational culture behind the processes and Tacit knowledge sharing facilitators during enterprise system to interrelate them with ERP knowledge incorporated into best implementation can be classified into two categories [28,20,10]: practices. structure of team interactions and atmosphere of the team. Struc- The perception of the process-based organizational memory ture of team interactions refers to factors that determine and regulates the handling methods in dealing with the mismatches structure the interactions between team members. For example, during ERP projects [29]. One extreme of such behaviors is to adopt the physical work space where the team is assigned to work in the entire process knowledge from the new system and change the can affect the pattern of interactions among team members organization’s paradigm accordingly. On the other extreme it could [28]. Hierarchy of the team membership is another structure fac- result in extensive customizations of enterprise system to incorpo- tor that influences the tacit knowledge sharing. Atmosphere of rate the organization’s process knowledge and paradigms into the the team considers the factors that are less tangible and define system. Considering processes as a medium for organizational the behavioral norms within the team. This atmosphere might memory, Stijin and Wensley [29] suggest that the new processes make team members feel inhibited from openly sharing their introduced by enterprise system may well embed some, but by opinions or inversely, foster open communication of ideas. no means all, of process knowledge that resides in organizations. Depending on the organizational strategies, firms may choose to Careful considerations are necessary in identifying exactly where emphasize one of the two tacit knowledge facilitators for tacit different types of process knowledge reside in organizations and knowledge sharing in enterprise system teams. For example, the decisions will have to be made as to what type of process knowl- project managers in one of the companies in Jones’ case study edge can be integrated into the new system and what other types [10]organized the team based on process rather than functions will continue to reside in other memory media [34]. Moreover, while deemphasizing ranks and seniorities and providing equal interactions must be available among the process knowledge bonus to all team members. They also made knowledge sharing stored in these different media so that informed decisions can be part of the contract with the external consultant. Such a structure made and the knowledge can be updated as the enterprise system that governs team interactions facilitates sharing of tacit knowl- project progresses. edge during the enterprise system project. Another company in Huang et al. [9] describe the dynamics of the process by which the same study focused more on providing an atmosphere where existing organizational memory and processes knowledge is mod- team members felt free to express ideas and others were willing ified as a result of implementing the new ERP system. They argue to listen. There were also off-site meetings arranged for team that organizational processes as representations of cross-func- members to provide more intimate knowledge sharing atmo- tional knowledge are continuously redefined by the various initia- spheres which could help preserve knowledge while people tran- tives implemented in the organization. As mentioned before, this sitioned on and off the team. echoes the concept of organizational memory which is constantly Although tacitness of the enterprise system knowledge is the reconfigured through incremental or fundamental changes. The most important characteristic of ERP knowledge which is reflected impact of ERP-induced business process redesign (BPR) on the pat- in the literature, the effects of the process-based nature of ERP terns of organizational memory in the organization under study in knowledge is also addressed in many research works [14,29,17]. [9] was found to be in the form of the redirection of knowledge Process-based nature of knowledge implies that organizational flows across the organization. The organizational memory was pre- processes embed substantial knowledge of the organization’s his- viously shaped around fostering organizational boundaries which tory and paradigms and since this knowledge is not confined to a served as ‘vales’ in controlling the availability and accessibility of specific mind’s cognition and is stored in form of processes, it information. Adopting the enterprise system tended to reshape can be regarded as the organizational memory. Viewing the enter- the organizational memory in a way that minimized the informa- prise system knowledge from the lens of organizational memory tion boundaries. Nevertheless, they also suggest that although has certain implications for enterprise system knowledge manage- the enterprise system facilitates the free flow of information, the ment in terms of its enabling or impeding factors in ERP projects. challenge of knowledge integration may still be remaining and de- The following sections review the issues related to enabling and spite the successful implementation of enterprise system and ben- impeding effects of organizational memory on ERP knowledge efits from ongoing capital investment, patterns of organizational management. memory might be deviating from the ideal ERP knowledge integra-
  6. 6. R. Vandaie / Knowledge-Based Systems 21 (2008) 920–926 925 tion requirements, which in turn can flaw the implementation in organizations, especially consulting companies, which regularly the long run. extend lucrative offers to ERP-Savvy employees. External consultants also operate as intermediaries who facil- 10. Organizational memory, barrier or enabler? itate organizational learning by bringing in external knowledge [33,23]. ERP technology is new and complex for many firms In their exploratory study of ERP implementation issues, Robey and it is difficult for a company to embark on such an endeavor et al. [23] discovered that most of the managers in their study who without external knowledge. With their expertise in configuring were involved in implementation projects reflected a concern with the organizational processes and adjusting them to the new sys- learning and knowledge. These managers believed that the main tem, consulting partners act as accelerators of organizational barrier to a successful enterprise system implementation was the learning and alleviate the negative effect of the organizational firm’s knowledge of existing systems and business processes. In memory of old processes. However, most successful firms limit other words, they saw the so-far-shaped organizational memory their dependence on consultants and take measures to ensure as an obstacle to acquiring the knowledge paradigm of the new the transfer of external knowledge into the organization [8]. system. Managers who were trying to comprehend the new busi- Effective use of consulting requires a firm to remain in control ness processes enabled by the enterprise system needed to recon- of the consultant-client relationship and make sure that the req- cile the demands for new knowledge with their knowledge of old uisite knowledge is transferred into the organization so that the systems and procedures. The issue reflected in this case study possibility of resuming the past status of organizational memory raises the question of whether or not the organizational memory under the resistance force is minimized. embedded in its processes acts as a barrier to enterprise system implementation. 11. Conclusion and discussion ERP implementation challenges established knowledge of the organization in two ways. First, packaged format of ERP allows lit- By means of a rather comprehensive review of the literature on tle customization. Second, as enterprise system replaces existing enterprise system knowledge management, this paper investigated legacy systems, it also replaces the processes supported by those the major concerns of the different lines of research which arise as systems that requires the organization to assimilate new business the consequences of two distinct characteristics of ERP-specific processes and manage its consequences. Old processes are deeply knowledge: tacit and process-based nature of enterprise system embedded into organizational memory which induces some sort knowledge. Fig. 1 summarizes these two areas of concern in enter- of resistance against assimilating the best practices. In addition, prise system knowledge management along with their facilitators organizational memory is supported by organizational structures that moderate their negative effects which are identified to be pre- which might even exacerbate the resistance during the change valent in cases studied by different researchers. The first area con- process. Typically high and medium level managers traditionally cerns the effects and implications of the tacit chunk of ERP-specific enjoy great autonomy in the organizational structure and pro- knowledge. The subject of tacit knowledge management is cesses [3]. Enterprise system is designed to restructure a process- addressed extensively in the literature and different issues along centered paradigm in the organization [32]. As a consequence, with their respective mitigating solutions are provided in various enterprise systems typically require organizations to get rid of research works [16,5,10]. most of their organizational memory about technical infrastruc- Tacit knowledge sharing facilitators during enterprise system tures and especially, about their business processes. Most firms implementation are classified into two categories [28,20,10]: struc- have had built information systems to support existing processes ture of team interactions and atmosphere of the team. Proper utiliza- prior to implementing enterprise systems; while by implementing tion of each method can assist the adopting organization in the ERP system, they are using it to change their business processes overcoming the difficulties of tacit knowledge sharing. Organizing [17]. These new demands require substantial organizational learn- communities of practice composed of the different groups involved ing, and different firms use a variety of means for overcoming in different stages of the enterprise system life cycle is one way to knowledge barriers associated with it. In simple terms, implement- overcome the difficulties of transferring such knowledge from ing an enterprise system means that organizations must learn to where it resides to where it is needed. In case of running the enter- function in radically different ways than what they have learned prise system project on distant locations [18], virtual communities during the course of past experiences. Ignoring this essential char- centered around company intranets or the internet acts as the acteristic of ERP implementation can heavily hamper the success of facilitating bridge among separate bodies of knowledge across the whole project. the entire enterprise. Arranging powerful core enterprise system implementation Process-based nature of organizational knowledge, is the sec- teams and effective utilization of external consulting are believed ond area of concern in enterprise system knowledge management to be effective methods of dealing with the knowledge barriers which was examined from the lens of organizational memory. connected with assimilating new processes and overcoming resis- Organizational processes embed substantial knowledge of the tance due to past organizational memory [9,29,23]. Core ERP teams organization’s history and can be regarded as the organizational that stay together, act coherently and are motivated by incentives memory. Viewing the ERP knowledge through the lens of organiza- to finish the project are very influential to overcoming knowledge tional memory sheds light onto some interesting issues of concern barriers. Core teams become a key repository of new knowledge in ERP implementation projects. Arranging powerful core enter- that facilitates the transition of the organizational memory to the prise system implementation teams and effective utilization of new knowledge paradigm. They also help to distribute knowledge external consulting were identified to be among most preferred throughout the organization as they come into contact with users methods of dealing with the knowledge barriers connected with and start transferring their expertise to others. If organizations enterprise system configuration caused by difficulties associated manage to retain the core team, the transformation and transition with organizational memory. of the organizational memory can be completed and the essential The standardization which results from adopting the same best knowledge integration will be accomplished [29]. However, retain- practices of enterprise system packages by many organizations ing an effective core team is not easy since as repositories of prac- might give rise to concerns about loosing competitive advantage. tical knowledge, members of core teams became valuable to other In particular, the two subjects reviewed here are very illustrative
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