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KNOWLEDGE MANAGEMENT FOR

ENTERPRISE SYSTEMS : OBSERVATIONS

FROM SMALL, MEDIUM &LARGE

Management Information & Control Science

Submitted By :

Priyanka PandeyAbhay Singh

Richa Sharma

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Objective

The paper explores the alleged differences in the knowledge

management practices across small, medium and largeorganizations that had implemented a market-leading ES.

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Introduction

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Enterprise Systems (ES) have emerged as the most important and

challenging development in the corporate use of information

technology.

Organizations have invested heavily in these large, integrated

application software suites expecting improvements in

Business processes

Management of expenditure

Customer Service Competitiveness

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Introduction (Contd.)

Initially some researcher and practitioners claim

that ES are best suited for large corporations

because :

Substantial resource requirements in ES

implementation

lifecycle wide management

Recent changes - ES vendors to focus on Small and

Medium organizations (commonly referred to asSMEs)

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Introduction (contd.)

This research DOES NOT focus on the SMEs that have implemented a

scaled-down ES that is designed specifically for the SMEs

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Observation from Small, Medium & Large organization 5

What does this research paper include?

Different types of issues faced by large & SMEsand purportedly receive different benefits and

impacts from ES compared to their smaller

counterparts.

The impact of organizational size in relation to

the antecedents of Information Systems success. Attempts to minimize this gap by focusing on a

lifecycle-wide knowledge management in small,

medium andlarge organizations

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Literature Review: Information System &

Organization Size

Tool for classification: Number of Employee

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Country Number of Employee

Belgium 90

USA 100

Germany 250

Small Organization

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Organization Size (contd.)

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Observation from small, medium and large organization

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European Union guidelines:

Organization Size Number of Employee

Small < 50

Medium 50 > but

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Whisler (1970) - Firm size was directly related to performance of

Information System .

Cheney (1983) investigated various factors affecting small businesses

in using information systems and found that small business are

prone to:

o Software,

o Hardware

o

Implementation problems in Information Systems.

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DeLone (1981) studied the relationship between the size of

manufacturing firms and Information System usage

He concluded that firm size is:

o Directly related to the age of the firms computer operations,

o Inversely related to the amount of external programming that are

being used,

o Directly related to the portion of revenues allocated to Electronic

Data Processing (EDP)o Inversely related to the percentage of EDP costs that are used

for purchasing computer hardware.

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Some More Findings

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Observation from Small, Medium & Large organization

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Relation Remarks

Application Types 1. Small to mid-sized organizations place a greater

emphasis on accounting and inventory control

IS acquisition in

medium and large

organizations

1. SMEs require assistance from external sources in IS

adoption and management.(Turnor)

2. SMEs are better placed for developing, implementing &

administering their own applications in-house, compared

to their larger counterparts.(Raymond)

Consultant

engagement in IS &

organization size

Resource constraints faced by SMEs hinder their

ability to maintain technology up to date.

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Literature Review on Knowledge

Management

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It tells about the four phases in the process of knowledge

management

Creation1 Retention2 Transfer3Applic-

-ation4

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Phases of Knowledge Management

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KnowledgeCreation

Developingnew content

Done byexternalplayer whobring newknowledgeon the

software

KnowledgeRetention

Involvesstorage of

information

KnowledgeTransfer

Providingtraining

Smallorganization informally

Largeorganization proper

training

KnowledgeApplication

Makingemployee

know of theimp. of theinterpretationof thedatabaseused for

futuredecisionmaking

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How it can be used?

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Knowledge Creation- Knowledge of activities of suppliers andsubcontractors and who to contact when there is a problem.

Knowledge Retention- Recording the valuable experience inelectronic form lets says storing the emails. Emphasis should be

on converting the tacit knowledge in to explicit knowledge.

Knowledge Transfer- A formal training program should beconducted only to let the people in the know of how interestedor reluctant a supplier is in serving the company. How has hisrecord been in the past.

Knowledge Application- Now while considering differentsuppliers, the attitude of the suppliers and their past experience with the company can be a great help while selectingor rejecting one.

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The Study Context

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Observation from Small,Medium & Large organisation

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The study gathered data from 27 organizations running a market

leading Enterprise System for last one decade.

It was a financial Management Software.

All the 27 states belonged to the State Government in Australia.

Broad Objectives of the Enterprise System were-

Financial Management improvement activities.

Best Resource Management.

Consolidation of State Government financial information.

Meet the business needs of agencies.

Meet economies of scale.

All organizations had same version of ES software.

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How effective was this ES?

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So if the Software was this much a convenience, organizations wouldhave wanted to work with it for good.

Well, this was not the case. The organizations went for changing theEnterprise Software.

As the members of the

organizations were

reported as saying

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Why was this SO SUCCESSFUL ER was

a flop for these organizations?

In the words of top management in these organizations-

The software is just perfect forlarger organizations but for smallerorganizations like us it is too complex and too expensive.

The Interpretation was that different ES systems are needed fordifferent sized organizations. Those ERs which are a hit in Largeorganizations may be a fiasco in smaller organizations.

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The analysis divides the 27 organization in to 3 parts on the basis of

user license:

Small (User license below 200)

Medium (User license between 200-999)

Large (User license above 1000)

Analysis objective

To assess that whether the organization size perceived value in the

4 KM phases. To analyze whether the respondents of the three organizational

sizes demonstrate differences in relation to the Knowledge

Management (KM) activities derived through the literature

Results And Analysis

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Satisfaction Level of Employees

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Through descriptive statistics, it is observed that managing knowledge

at the two main stages of the ES lifecycle

Pre ES implementation stages

Post ES implementation stages

It could be somewhat different in the three organizational sizes.

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Results And Analysis(contd.)

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Path Model

The path model has been developed

and tested using Partial least Squares

The three PLS models below

investigate the relationship between

KM atimplementation post

implementation KM activities and

their relationship with the overall

goodness of theKM process

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Results

Results observe the strength of the paths between KM activitiesduring and post ES-implementation (independent variables) and theoverall goodness of the KM process (the dependent variable).

It is evident that the r-square of the overall goodness ofKM process,decline with the declining organizational sizes, attributing to theoverall goodness ofKM activities in large organizations.

Observing the path coefficients of the during and post implementation paths, it is clear that larger organizations tend toexplain the overall goodness using the KM activities post implementation, compared to the small organizations where theoverall goodness is still relying on the knowledge creation that hadtaken place.

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Conclusion

The study results demonstrated that, even with similar knowledge

creation outcomes, small and medium sized organizations

demonstrated lower mean scores in relation to lifecycle wide

knowledge management activities

It was also observed that respondents from small and medium

organizations reported lower levels of satisfaction towards the overall

goodness of the knowledge management in their organizations

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Conclusion(contd.)

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Path model developed, found that compared to large organizations,

small organizations still assess the goodness of knowledge

management process in light of the knowledge created at the time of

the implementation

These findings highlight the capabilities (or lack of ) of small

organizations to maintain a lifecycle wide ES knowledge management

strategy, even with the same levels of knowledge creation at the time

of the ES implementation

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