Information Systems Strategy, Information Information Systems Strategy, Information Systems and Globalization: Systems and Globalization: when ‘best practice’ meets cross-cultural when ‘best practice’ meets cross-cultural communicationcommunication

Bob Galliers, Provost, Bentley ESRC Seminar

Nottingham University 10 May, 2004

Bentley???Bentley???

Bentley – the US’s first Bentley – the US’s first business universitybusiness university

Bentley is a business university. We do for students interested in business and related professions what the leading technological universities do for students of science and engineering.

                                                            

Bentley blends the breadth and technological strength of a university with the values and student experiences of a small college.

Bentley – the Business School for Bentley – the Business School for the Information Agethe Information Age

The campus … and the The campus … and the facilitiesfacilities

Center for Marketing TechnologyCenter for Marketing Technology

The Trading RoomThe Trading Room

Today’s agendaToday’s agenda

• To surface issues confronting multi-national companies, relating to cross-cultural communication and relationship management

• Focusing on:– Information systems strategy and development– “Best practice solutions”

• Two case vignettes

Towards a more inclusive framework for Towards a more inclusive framework for Information Systems StrategizingInformation Systems Strategizing

Collaborative and competitive environment

Collaborative BusinessStrategy

INFORMATION INFRASTRUCTURE

STRATEGY(Socio-technical environment)- IT, standards, data, architecture- Information services (sourcing)- Human resources (skills, roles)

EXPLOIT-ATION

STRATEGY(Deliberate)- codified ‘solutions’

e.g., ERP systems- standardized

procedures- rules- ‘knowledge

mgmt.’

EXPLOR-ATION

STRATEGY(Emergent)

- communities ofpractice

- flexible projectteams

- knowledge brokers,sharing & creation

- bricolage/tinkering

CHANGEMANAGEMENT

STRATEGY

ON-GOING LEARNING& REVIEW

Socio-political, technologicaland economic environment

Source: Galliers, 2001

Two vignettesTwo vignettes

• Case company A:– Engineering– ERP & KMS– Newell, Huang, Galliers, Pan (Bentley,

Nottingham, NUS)

• Case company B:– Financial services– Software development– Chand, David, Moore and Vasudevan

(Bentley)

Case Company A: backgroundCase Company A: background

• Multinational engineering company• Designs and manufactures standard

and custom-built products; provides consulting services

• Corporate clients from over 70 countries

• 60,000+ employees• $8 billion sales turnover in 2000

Case company: organizationCase company: organization• Four main product divisions – global basis:

– Power Generation– Transport– Infrastructure– Gas & Oil

• Fifth division – regional basis:– Logistics and Warehouse

• Support functions at HQ, e.g.:– Finance– HR

• Consulting arm – project-by-project basis

Implementing ERP and KMS in tandemImplementing ERP and KMS in tandem• Efficiency and innovation

• ERP– Integrate business functions into single system with

shared database (Lee & Lee 2000)– Overcome problems of ‘legacy systems’– Common business processes– Improved competitiveness through increased

productivity

• KMS– Improved competitiveness through knowledge

utilization– Free flow of knowledge across organization(s)– Knowledge capture and transfer through ICT– Data mining

Efficiency and/or flexibility?• Burns and Stalker (1961): mechanistic

versus organic organizational designs• Mintzberg (1979): machine bureaucracies

versus adhocracies• Senge (1990): adaptive learning versus

generative learning• March (1991): exploitation versus

exploration

Flexibility is achieved at the expense of efficiencyFlexibility is achieved at the expense of efficiencyHannan & Freeman (1989)

Efficiency and/or flexibility?Efficiency and/or flexibility?

• Long history of polarity, but empirical evidence limited and contradictory (Adler et al. 1999)

• Evidence for (Hayes & Wheelwright 1984)• Evidence against (MacDuffie et al. 1996)• ‘Ambidextrousness’ (Daft 1998; Tushman

& O’Reilly 1997)

Research methodResearch method• Interpretivist case study (Gopal & Prasad 2000;

Walsham 1995)• Data sources:

– 37 semi-structured, face-to-face interviews (1998-99)– Interviews via telephone and email– Informal dialogue– On-site observation– Documentation

• Open coding (Strauss & Corbin 1990)• Adler et al.’s (1999) theoretical framework

used as a ‘sensitizing device’ (Klein & Myers 1999)• Unintended negative consequences (Robey &

Boudreau 1999)• Conceptually clustered matrix (Miles & Huberman

1994)• Process of reflexivity (Alvesson & Sköldberg 2000)

The ERP initiative: backgroundThe ERP initiative: background

• 1995: Four month evaluation study conducted by IT service provider

• 2nd Q 1996: top management go-ahead, for:

• 3 year project – Europe and North America

• “One of the most important in terms of capital investment and coverage in company’s history”

The KM initiative: rationaleThe KM initiative: rationale

• “… trying to start KM is more than just catching up with the latest managerial fashion. The people at the top are constantly going on about how critical innovation is to us and how desperate they are to develop an innovative culture. But innovation has to come from somewhere … Personally, I believe KM is the philosophy that provides the inspiration to create the innovation.” (Consulting division)

The KM initiative: implementationThe KM initiative: implementation

• Project team Corporate Knowledge Center (CKC)

• Web-based, corporate-wide knowledge directory (“K-bank”)– 11,000 personal homepages– Standard info plus personal info column

• Product-based learning and innovation communities (LICs) - spread across the globe– 100 or so– 60 through CKC workshops/training programs– 50 with continuously updated websites

FindingsFindings• Complementary or contradictory nature of ERP and

KM systems?Both judged to be successful, and complementary

– ERP:• Faster strategic info• Better coordination of activities

– KM:• Effective exploration and exploitation of knowledge

(March 1991) both intra- and inter-organizationally• Improved continuous learning (Fiol & Lyles 1985)

Mutual reinforcement of ERP and KMS: Mutual reinforcement of ERP and KMS: unintended consequencesunintended consequences

• Internal boundaries reinforced in products divisions– Emphasis on individual department performance through ERP

internal competition rather than collaboration– KM’s LICs set up with representatives from single production

units no cross-unit learning

• Reduction in social capital– Reduction in suppliers and service providers critical

source of knowledge for innovation being cut off

• Creation of inter-group conflict and resistance– Shift in information ownership from ERP negative impact

on KM initiative

Case Company B: backgroundCase Company B: background

•Founded in 1946 •Headquartered in Boston, MA•The largest mutual fund company in

the United States•More than $880 billion under

management as of June 30, 2003•More than 19 million customers

company wide•Products include mutual funds,

brokerage, insurance

Globally distributed software developmentGlobally distributed software development

• Information services in financial markets• A profit center – competing for company

business with third parties• USA, Ireland, India• India – a threat to Ireland, and esp. USA• Low cost imperative• Standardized technology, software,

methodology imposed top-down

Research Project ActivitiesInterviews

– 18 interviews conducted with:• Engagement Managers in Boston and Ireland• Project Managers in Merrimack, Dublin,

Galway, and Gurgaon• Team members in Merrimack, Dublin

Galway, and Gurgaon

Field research– Site visits to Boston, Merrimack, Dublin,

Galway, and Gurgaon– Attended 9 Engagement Manager video

conferences (8 in Boston and 1 in Dublin)

Summary of Preliminary FindingsSummary of Preliminary Findings

1. The importance and challenge of building team cohesion among distributed personnel

• Recognizing the role of team cohesion as an important variable in team productivity

• Allocating people to teams based on past cohesiveness index

• Installing project initiation techniques that increase cohesiveness of the team

Summary of Preliminary FindingsSummary of Preliminary Findings

2. The need to develop integrative and collaborative work among distributed teams

– Providing the social networks to develop rapport, relationships, and trust among team members

– Balance formal and informal communications among team members

– Building and creating an in-company culture to offset other cultural differences

Summary of Preliminary FindingsSummary of Preliminary Findings

3. The reliance upon standardized processes, best practices, development methodologies, and information and communication technologies

– While the standardization of work can aide in establishing understanding and increased productivity among distributed teams, it can also have negative effects, e.g.,• minimizing innovation• hurting morale• limiting development of employee skills

– Needs to be a balance between imposing a global work culture and allowing one to emerge

Summary of Preliminary FindingsSummary of Preliminary Findings

4. Evolution of roles versus planned assignment of roles

– Emergent sense of anxiety and uncertainty over changing roles

– Perception of inter-center competition, which can hurt collaboration

– Importance of articulating and, preferably, negotiating a shared common vision of the roles and responsibilities of different solution centers

From “Knowledge Management” to From “Knowledge Management” to “Relationship Management”“Relationship Management”Through Processes

– Standardized methodologies– Best practices– Technological pipelines

Through Technologies– Telephone Sametime (IM)– Conference calls Webcams– E-mail Video conferences– Bulletin boards On-line discussion groups

From “Knowledge Management” to From “Knowledge Management” to “Relationship Management”“Relationship Management”Through Processes

– Standardized methodologies– Best practices– Technological pipelines

Through Technologies– Telephone Sametime (IM)– Conference calls Webcams– E-mail Video conferences– Bulletin boards On-line discussion groups

Through Face-to-Face

Summary Implications

1. Increasing dependence on ICT in accomplishing distributed work

2. Substitution of face-to-face interaction for technologically-mediated communication in team building

3. Development of a more fully realized cost model in project off-shoring, including “hard” and “soft” costs

4. (Over?)reliance on standardized processes and methodologies in coordinating distributed work

5. More structured approach to communication

Towards a more inclusive framework for Towards a more inclusive framework for Information Systems StrategizingInformation Systems Strategizing

Collaborative and competitive environment

Collaborative BusinessStrategy

INFORMATION INFRASTRUCTURE

STRATEGY(Socio-technical environment)- IT, standards, data, architecture- Information services (sourcing)- Human resources (skills, roles)

EXPLOIT-ATION

STRATEGY(Deliberate)- codified ‘solutions’

e.g., ERP systems- standardized

procedures- rules- ‘knowledge

mgmt.’

EXPLOR-ATION

STRATEGY(Emergent)

- communities ofpractice

- flexible projectteams

- knowledge brokers,sharing & creation

- bricolage/tinkering

CHANGEMANAGEMENT

STRATEGY

ON-GOING LEARNING& REVIEW

Socio-political, technologicaland economic environment

Source: Galliers, 2001