Overcoming Knowledge Integration Barriers in ERP implementation Using Action Research Approach

1. Overcoming Knowledge
Integration Barriers in ERP
implementation Using Action
Research Approach
Víctor W. Bohórquez and José Esteves
IE Business School
AMCIS 2009 – San Francisco, USA

2. Agenda
• Introduction
• Theoretical Background
• Methodology
• Setting the Scene
• Theoretical Model
• Analysis and Lessons Learnt
• Conclusions and Further Research
AMCIS 2009 – San Francisco, USA

3. Introduction
• Growing popularity of ERP (Davenport 2000)
(Davenport,
• ERP implementation can be complicated and
problematic (Davenport, 1998)
• Lack of studies about ERP implementation in terms of
knowledge integration(Esteves and Bohórquez, 2007)
g g ( q )
• Essence of knowledge integration: environment in
which knowledge infrastructure can effectively support
the core organizational capabilities (Grant, 1999)
• Successful ERP implementation develops new cross-
functional k
f ti l knowledge, capabilities and competence f
l d biliti d t for
the organization (Wan, Shan and Huang, 2001)
AMCIS 2009 – San Francisco, USA

4. Theoretical Background
Knowledge Integration
• It is based on 4 distinctive but interrelated
dimensions: structural, technological,
intellectual and socio-emotional (Huang,
Newell, Pan and Galliers, 2001)
, , )
• Tacit knowledge within the system and within
the organization makes knowledge integration
g g g
in implementations slow and painful (Nonaka,
1994)
AMCIS 2009 – San Francisco, USA

5. Methodology
• AR provides a potential avenue to improve
the practical relevance of IS research
(
(Baskerville and Myers, 2004)
y )
• AR enables to investigate the complexity
within the organizational context (
g (Braa and
Vidgen, 1999)
• Because one of the Authors:
– Part of the consulting team
– Total immersion within the context of the study
– Inevitably influenced by what was happening (McNiff,
Lomax and Whitehead, 2003)
– Participant and agent of change (Coughlan and
Coghlan, 2002)
AMCIS 2009 – San Francisco, USA

6. Methodology
• Focus: Problems of knowledge integration
g g
between organizational culture and best-
practices supported by an ERP system
• Unit of analysis: Implementation team
• Period: Three months
• Data collection: multiple interviews, informal
conversations, workshops, brainstorming
, p , g
sessions, socialization, discussions and
meetings.
• Action Research allowed to:
Build a complete picture of the ERP
implementation process
AMCIS 2009 – San Francisco, USA

7. Setting the Scene
• The company
– Over 250 employees
– Annual sales close to US$50 million
– Within the 200 largest companies in Peru
• The consulting firm
– One of the best known consulting firms in Peru
– With presence in other Latin-American countries
– Clients are leading Peruvian organizations
– More than 100 full-time consultants
• The context
– Islands of information
– Power of IS department
– Decision to ERP adoption
– ERP Implementation process
AMCIS 2009 – San Francisco, USA

8. Theoretical Model
ERP Best‐Practices
ERP B P i
Knowledge Integration Barriers
Intellectual and
Structural Technological Socio‐
Barriers
B i Barriers
B i emotional
i l
Barriers
Organizational Culture
Organizational Culture
AMCIS 2009 – San Francisco, USA

9. Analysis and Lessons Learnt
Structural Barriers
• Organizational structure limits the interaction among different functional areas
• Rigid and hierarchical organizations inhibit change (Mohamed et al., 2004)
• Relationships among areas are crucial to identify complexity and to determine
implementation requirements
• Firms do not know their real complexity
• Fi
Firms perceived ERP i l
i d implementation as disruptive (Ross and Vitale, 2000)
t ti di ti (R d Vit l
• ERP increases bureaucratic effect because it increases formalization,
standardization and centralization (Govers and Van Amelsvoort, 2007)
• Implementation only succeeded when the organization was able to re-structure
itself (Markus, 1983)
• Strategic g p formed by key users could connect hubs of knowledge
g groups y y g
facilitating the processes of knowledge sharing (Pan et al., 2001)
Strategic groups were formed after the first knowledge integration problem
Build a new organizational structure to support ERP implementation process
AMCIS 2009 – San Francisco, USA

10. Analysis and Lessons Learnt
Technological Barriers
• Islands of information with different programs that fulfill
different tasks; hence, there is no central ownership of data
• IS department was the author of the previous system
• IS people were not comfortable supporting new ERP system
• Parallel use of legacy systems
g y y
• Comparison between legacy systems and new ERP as well
as a considerable duplication of effort
• Routines th t coordinate efforts among all th related users
R ti that di t ff t ll the l t d
facilitate knowledge integration (Gersick and Hackman, 1990)
Use of legacy systems only for validation reasons
g y y y
Users should focus only in the new ERP
Users should understand their contribution
AMCIS 2009 – San Francisco, USA

11. Analysis and Lessons Learnt
Intellectual and Socio emotional Barriers
Socio-emotional
• Intellectual dimension: learning and knowledge of users
• Socio-emotional dimension: feelings and the willingness to improve
skills of users
kill f
Main barriers:
• Individual knowledge isolated in organizational silos
• Knowledge transfer between legacy system and new ERP system,
and between consultants and ERP users
• ERP users were trying to make sense of the change
Create knowledge-enabling structures around existing IS
Enable intra-organizational knowledge transfer and sharing
User t i i as a key requirement for ERP implementation
U training k i tf i l t ti
Shift user perspective from individual level to organizational level
AMCIS 2009 – San Francisco, USA

12. Conclusions and Further
Research
• Very little is known about how organizations adapt to new
ERP system that implies significant contextual, social and
cultural changes (Wan et al., 2001)
• This study provides managers with practical suggestions to
surpass knowledge integration problems:
– Structural barriers: Promotion of new organizational structures formed
after the appearance of the first knowledge integration problems to
support the ERP implementation process
– Technological barriers: IS people were reinforced in their knowledge
related with the new ERP systems, and legacy systems were used
only for validation purpose
– Intellectual and socio-emotional barriers: Improvement in the transfer
socio emotional
of knowledge between consultants and ERP users; more training to
make sense of changes; and collaboration among departments
Training ith h li ti i i i
T i i with a holistic vision is an ignored frequent issue, and a
i df ti d
promising topic to further research
AMCIS 2009 – San Francisco, USA

13. Questions?
Thank you…
AMCIS 2009 – San Francisco, USA