Knowledge-Based Systems

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1 Knowledge-Based Systems 21 (2008) 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 article info abstract Article history: Received 26 April 2006 Received in revised form 27 May 2006 Accepted 13 April 2008 Available online 20 April 2008 Keywords: Enterprise system implementation Organizational knowledge management Process-based knowledge Tacit knowledge Special attention to critical success factors in the implementation of Enterprise Resource Planning systems is evident from the bulk of literature on this issue. In order to implement these systems that are aimed at improving the sharing of enterprise-wide information and knowledge, organizations must have the capability of effective knowledge sharing to start with. Based on a review of the literature on the knowledge management in enterprise system implementation projects, this paper identifies two major areas of concern regarding the management of knowledge in this specific type of projects: managing tacit knowledge, and issues regarding the process-based nature of organizational knowledge viewed through the lens of organizational memory. The more capable an organization is in handling these issues, the more likely it is that the implementation will result in competitive advantage for the organization. The competitive 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 * Tel.: x26179; fax: address: vandair@mcmaster.ca In order to be able to respond to the fast-changing business environment of the contemporary markets, enterprises have felt the urgent need to integrate business functions into a single system. Such solutions often referred to as Enterprise Resource Planning (ERP) systems, efficiently utilize information technology, and enable the internal sharing of data and information as well as the required communication with third-party vendors and customers [18,27,15]. ERP systems focus on the integration of business functions throughout the entire enterprise by facilitating the flow of information across the line of the business processes as they cross the departmental boundaries. ERP systems run off a single database and enable various departments to share information and communicate with each other. Given the high risk of failure associated with enterprise system implementation projects [30,26] special attention to critical success factors in enterprise system implementation is evident from the bulk of literature on this issue [14,3,33]. These success factors range from technical know-how and expertise to people and organization management skills required during a typical enterprise system implementation project [8,15]. Optimal implementation of enterprise systems requires attention to the technology as well as people [27,13,17]. Developing the technology side of an enterprise system to cover all organizational processes can lead to successful outcomes only if it is accompanied by the evolution of human capabilities to understand the implications and handle the consequences of the new system and business processes defined for it [34]. Enterprise system as a technology is designed to enable firms to better manage their knowledge by integration of business processes and have better control of information and data in the organization. Ironically, to implement the technology that is aimed at improving the sharing and integrity of information and knowledge in the firms, organizations must have the capability of effective knowledge sharing to start with [10]. The knowledge required during enterprise system implementation includes a variety of expertise, experiences and skills and therefore cross-functional and cross-divisional transfer of knowledge is necessary to ensure that the requisite enterprise system knowledge is available for a successful implementation [2]. ERP implementation is so knowledge-intensive that the fate of the whole project is in hands of a group of knowledgeable employee from across the organization and success of the project relies heavily upon effective management of knowledge into, within, and out of this team during enterprise system life cycle. Implementation team members are, by definition, knowledge workers [5] who put their experience and knowledge into work, are influenced by the knowledge they gain during the enterprise system project, and become more valuable for the organization as they grow more and more knowledgeable about the new system [23]. ERP knowledge does not reside exclusively on the supply side, nor can it be transferred directly to the user organization. Rather this knowledge is dispersed within the organization (across func /$ - see front matter Ó 2008 Elsevier B.V. All rights reserved. doi: /j.knosys

2 R. Vandaie / Knowledge-Based Systems 21 (2008) tional divisions, work groups, etc.) and outside the organization (with consulting partners or software vendors) [20]. During a successful ERP implementation project this knowledge must be combined and integrated and transformed into applicable knowledge [21] in the particular context of the project. Typically this is achieved by setting up a team to evaluate the existing solution and then design and implement the chosen system. By mapping existing organizational process, identifying processes embedded in enterprise system package and defining new organizational process that fit both the new systems and the organization, the ERP implementation team configures the package to suit the organizational context. Disperse, function-embedded, and process-oriented knowledge must be gathered and combined with the knowledge embedded in the ERP package. Therefore knowledge needs to flow among team members, and between team members and other organizational members or external consulting staff. Fundamentally, successful completion of these activities will depend on how well the ERP-specific knowledge is handled and managed to ensure the access to requisite knowledge whenever, wherever, and by whomever it is needed. Based on a review of the literature on the knowledge management in enterprise system implementation projects, this paper identifies two major areas of concern regarding the management of ERP knowledge. The first area concerns the effects and implications of the tacitness of a great portion of ERP-specific knowledge. The challenge of tacit knowledge sharing is partly due to the fact that the process knowledge is by and large routinized so that employees may be subconscious about the separate steps which are gone through in the process and have difficulty expressing it explicitly. When any of these employees are selected as the ERP implementation team member, the need for communicating this type of knowledge is magnified. Based on the process-based nature of this type of knowledge, the second area examines the application of organizational memory in ERP knowledge management. Organizational processes embed substantial knowledge of the organization s history and paradigms and since this knowledge is not confined to a specific mind s cognition and is stored in form of processes, it can be regarded as the organizational memory. Viewing the ERP knowledge from the lens of organizational memory has certain implications for managing the knowledge in these projects in terms of its enabling or impeding factors in enterprise system projects which makes it an interesting issue to consider besides the important problem of tacit knowledge sharing. This paper begins with general definition of organizational knowledge and knowledge management and transitions into ERP-specific knowledge management issues. Enterprise system tacit knowledge sharing and organizational memory perspective of ERP knowledge are discussed following the definition of basic concepts and are followed by conclusion and discussion of these identified issues. 2. Organizational knowledge and knowledge management Although the concept of knowledge has been addressed by scholars for a long time, the concerns about managing organizational knowledge has been introduced and gained spectacular acceleration during the last few decades [28,1,6]. This knowledge wake has taken special advantage from the overwhelming advances in information technology, such that design and implementation of information systems in support of organizational knowledge management has found an established ground in Information Systems research [1,24]. Yet, designing information systems to support knowledge management initiatives is impossible unless an understanding of the nature and types of knowledge in organization exists. Such an understanding is a key element in formulating and analyzing the role of information systems in facilitating the management of organizational knowledge [7,31]. From the epistemological perspective, knowledge is known to be either tacit or explicit. Explicit knowledge refers to knowledge that is transmittable in formal, systematic languages. Tacit knowledge on the other hand is personal, context specific, and therefore hard to formalize and communicate. Assuming that knowledge is created through the interaction between tacit and explicit knowledge, Nonaka and Takeuchi [21] introduced their spiral of knowledge creation in which knowledge contents interact with each other to interchange from tacit to explicit or vice versa. The hierarchical view of knowledge which includes Data, Information and Knowledge in the ascending order of complexity is widely accepted. Data is the raw facts which are processed to become information. Authenticated information by human perception is considered to be knowledge. In practice, what organizations actually manage under the name of knowledge management, is a mix of knowledge, information and data; so, as we see, it is very difficult to distinguish between these different dimensions of knowledge in real world experiences [4,7]. The hierarchical nature of knowledge is also reflected in knowledge management initiatives. Organizations focusing on data and information levels, are more likely to choose approaches involving data warehouses, statistical analysis and other similar tools; while focus on knowledge level normally leads to initiatives like communities of practice [1]. The understanding of this characteristic of knowledge as well as recognizing the tacit or explicitness of knowledge residing in the minds of individuals or in the collective organizational memory, act as a basis in determining the type of knowledge management strategies and initiatives for an organization. All in all, identifying what is meant by knowledge for an organization is the first step. It is the next step, however, which is the challenge; namely, what can be done to improve the creation, storage and dissemination of knowledge in organizations. Next, the issue of identifying the characteristics of knowledge in the specific context of enterprise system implementation projects is discussed and a knowledge-based view of ERP projects is presented. 3. Knowledge-based view of ERP projects Enterprise system allows companies to have a convergent and integrated view of the organizational information by means of centralized databases and integrated business processes across the lines of different divisions and departments [9,23,19]. It could be said that as the result of enterprise system implementation the organizational information and knowledge converges across different divisions and departments on an organization-wide scope. IT experts need to know more about the business processes and business process experts need to leverage their knowledge about the IT systems in place in their organization. Eventually, the overlap between the knowledge of different divisions increases and the knowledge on the organizational scale follows a converging pattern. However this convergence on the organizational level tends to turn into divergence as we move down to the individual level [2,17]. A broader knowledge of the organization is required for end users of enterprise system systems compared to the traditional legacy systems that were adapted to each island of automation. As the view changes from task-focused to the processfocused by implementing enterprise systems, employees need to know how their task fits into the overall process and how that process contributes to the achievement of organizational objectives. For example, an employee working in customer billing section will need to know more about the IT systems as well as other business areas such as production and accounting. Similarly, the IT experts need to know more about different subject areas to

3 922 R. Vandaie / Knowledge-Based Systems 21 (2008) adapt the new system to their requirements and configure the enterprise system to operate optimally. Therefore, as the organizational view of knowledge regarding the tasks and processes that are conducted in the organization tends to converge by the use of enterprise system, the individual knowledge must diverge to accommodate for the changes posed by enterprise system implementation [2]. One major implication of such a view of enterprise system projects is that knowledge sharing needs to be significant across organizational boundaries to allow for the maximum sharing of observations and experiences among employees from different organizational divisions with different mindsets about how the business is done along the line of process. Knowledge sharing in enterprise system projects exists along different lines of interaction among organizational members, ERP team, and external consultants which echoes the need for improved knowledge sharing along different organizational dimensions and in different levels of engagement with the implementation project. Next section reviews different lines of ERPspecific knowledge sharing in more details. 4. Different lines of knowledge sharing in enterprise system projects ERP team is the center of activities in every ERP implementation project [23,12]. This team is in charge of implementing enterprise system in multiple stages beginning with the examination of the current business processes (referred to as the as is phase), followed by identification of the gap between the as is status and the to be status which is determined by the best practices included in the enterprise system package. The final step of the ERP team s mission is installing the new processes and training the users to use them without getting stock or crashing the new system [12]. The members of this team come from different departments carrying the knowledge which is specific to their department and as part of mapping organizational business processes, is required to be shared with other members of the team. 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]. In addition to the group knowledge sharing, the enterprise system team also has a great deal of communications and interactions with end users and user managers to both become aware of their expectations of the new systems and keep them informed about the changes that might occur after the implementation. Since the sharing of knowledge in this level is directly influenced by the users capability of handling the changes in roles as a result of the new system [3,13], this part of enterprise system knowledge management must be incorporated into the change management strategy of the organization. A third line of knowledge sharing is between the ERP implementation team and the consulting firms hired to convey their professional knowledge of the selected enterprise system package into the organizational [23,26]. The knowledge that team members seek from the integration partner is not restricted to the manuals and the documented information about the package. Thus, it is important for the consulting staff to work side by side with enterprise system team members so that they can learn what is hard to document as instructions and manuals [11]. Facilitating knowledge sharing requires adopting knowledge management initiatives along with the ERP implementation projects. But the simultaneous implementation of knowledge management initiative and enterprise system might have certain complexities. Next section discusses different views stated in the literature on the issue of contradictory or complementary effect of having KM and enterprise system initiatives in place at the same time. 5. Knowledge management and enterprise system, contradictory or complementary? Considering simultaneous implementation of enterprise system and knowledge management systems in organizations implies some sort of contradiction by its nature. Enterprise systems are meant to increase the organizational efficiency by enhancing the information processing capability of the enterprise [15,19]. This capability enhancement is enabled by the systematization and centralization of information management and the adoption of standard approaches to the codification and processing of information. On the other hand, Knowledge management initiatives aim at mobilizing the knowledge through organized knowledge repositories of explicit knowledge and communities of practice as a means of sharing and creating tacit knowledge, having their overall focus on improving innovation capabilities by increasing flexibility [4,7,24]. While it is traditionally believed that it is impossible for an organization to focus on both efficiency and flexibility, Newell et al. [19] show, by analyzing a case, that enterprise system and knowledge management initiatives are complementary rather than contradictory. Assuming enterprise system systems as integrated databases of organizational information and explicit knowledge as opposed to knowledge management initiatives being methods of managing tacit knowledge, their findings suggests that a balanced perspective of enterprise system and KM systems can assist in exploiting explicit knowledge as well as exploring and sharing tacit knowledge simultaneously. In other words, utilizing the respective strength of enterprise system and KM in tandem enables the alignment of organizational capabilities in information processing, knowledge exploration and exploitation [19]. Knowledge management techniques are used over the course of enterprise system implementation and during different steps of implementation projects to facilitate this knowledge sharing [8]. Detailed view of how knowledge of ERP project members evolves during these different stages is discussed next. 6. Knowledge management in enterprise system life cycle Knowledge management can assist the adopting companies and the consulting firms through different stages of the enterprise system life cycle. On a general view, enterprise system life cycle involves selecting, implementing, and using the enterprise system [22,23]. In selecting stage, knowledge management systems could be designed to organize the information regarding different types of enterprise system packages so that firms looking for an ERP package can compare and choose the one that best fits their organizational context and fulfills their requirements. The implementation stage of enterprise system life cycle is characterized by the occurrence of various problems in design and practice of the new system [16,27,30] and keeping an organized record of these problems along with their tested answers is a valuable resource for every enterprise system implementation effort. In the using stage issues range from compliance of the data plugged into the system by the standard settings of the software for data entry to configuring the system to generate the desired output reports [25]. Availability of knowledge management systems that provide the accurate and timely information for such issues seems to be a necessity for every adopting organization. In all stages of the enterprise system life cycle, the part of the knowledge which is hard to capture and document (i.e. the tacit knowledge) can not be organized using formal knowledge repositories [28,10] and the knowledge management techniques facilitating the access to this type of knowledge differ in nature from the explicit knowledge management systems [22]. The challenge

4 R. Vandaie / Knowledge-Based Systems 21 (2008) of tacit enterprise system knowledge sharing is partly due to the fact that the process knowledge is by and large routinized so that employees may be subconscious about the separate steps which are gone through in the process and have difficulty expressing it explicitly [10]. When any of these employees are selected as the enterprise system team member, the need for communicating this type of knowledge is surfaced. Transferring the experiences gained during enterprise system project from and to the members who transition on and off the enterprise system team, transfer of expertise from external consultants to the enterprise system team members, and transferring the contextual knowledge of enterprise system which could help users to better understand the underlying assumptions of the enterprise system are among other challenges posed by the tacitness of ERP-specific knowledge [28,23,10,17]. Due to the significant emphasis of the literature on the issue of tacit knowledge management in ERP projects, following sections review this subject in deep and discuss different methods adopted by organizations to face its complexities. 7. Managing the tacit ERP knowledge Two different categories of business processes have been identified in the literature: canonical and non-canonical [2,17]. Canonical processes are the abstract representation of the organization and they map complex tasks to a set of simple canonical steps. Non-canonical processes refer to what actually happens during the work and represent informal processes governed by communication and interpersonal relationships used for getting advice for on-the-job practices [2]. One implication of identifying these two types of business processes is that the transfer of ERP knowledge also should be considered from a two-dimensional perspective. The reference models or best practices in ERP packages are canonical processes which are explicitly coded and represent the explicit part of the knowledge transfer in enterprise system projects. These best practices are reference models for the chains of activities which are adopted by the organization implementing the system. However, the knowledge transfer is not limited to this explicit dimension and ERP systems are not just pure software packages which can be tailored to the organization [30,10]. In fact, in addition to the cleanly codified procedures, they also entail non-canonical processes related to organizational dimensions that affect the ways in which business is carried out throughout the organization and influence the company s strategy and culture. Therefore, implementation of enterprise systems includes the transfer of explicit as well as tacit knowledge of business processes. Transfer of the explicit part or the codified business processes to the adopting organization is part of the standard ERP implementation procedure and generally does not pose much complexities [23]. However, transferring the tacit part of this knowledge urges for intimate communication and informal relationship between the source and the recipient of knowledge [28]. Such kinds of relationships are limited in enterprise system implementation projects and as a consequence, the adopting organization s capability to adjust the existing organizational norms and culture to the implicit fundamentals of new business processes plays an important role here. In other words, implementing the best practices changes the way business have been conducted for a long time and sufficient understanding of the proper actions to face this change is not possible just by installing the system and its components. By focusing on the transfer of explicit and tacit knowledge during enterprise system implementation, this process can be divided into two separate phases: implementation and integration[2]. Implementation phase refers to implementing the canonical processes of best practices provided in the ERP package which are comparatively easy to transfer and map into the organization. The next step is to merge the non-canonical processes underlying system with existing culture in the organization to complete the knowledge transfer process. The integration phase, however, may not be as easy as the implementation phase since the new values may conflict with the old ones [27]. These conflicts may reflect as the resistance to change among employees which in turn will deviate the implementation process from its planned desired outcomes. Internalization of the non-canonical processes increases the appreciation for the new values in the organization and mitigates the negative effects of the organizational resistance [3]. Distinguishing the implementation and integration phases provides an initial explanation for the basic question of how companies can gain competitive advantage from ERP system if the competitors use the same standardized set of best practices [2]. The implementing of best practices is the common part which has almost the same implications for different organizations. The competitive advantage arises from the organization s capabilities in internalizing and integrating the adopted processes with the existing business values and harmonizing the ERP technology and the organizational culture towards getting the most out of the implementation effort. Part of this capability could be in the form of restructuring the organizational roles in order to increase the cross-functional knowledge transfer and fill the gap between the knowledge base of employees and the enterprise-wide knowledge requirements of the system [16]. Therefore, it is reasonable to assume that the competitive advantage in adopting enterprise system relies mainly on the tacit knowledge handling capabilities of the organization. Next section reviews the different areas where necessities for tacit knowledge sharing exist in every ERP project and classifies them according to their idiosyncrasies. 8. Tacit knowledge sharing in enterprise system projects Enterprise system as a technology is designed to enable firms to better manage their knowledge through effective knowledge sharing as a consequence of tight integration of processes and better control of information and data [10]. Ironically, to implement the technology that is aimed at improving the sharing of knowledge in the firms, organizations must have the capability of effective knowledge sharing to start with. It may appear at first that the knowledge required for enterprise system implementation can easily be codified and distributed along with the ERP package since it is basically a set of transaction processing systems. However knowledge sharing during ERP implementation involves more than just communicating how different procedures and modules of the enterprise system operate [16,28,10]. It requires that organizational members, especially those who are in the core implementation team, have a clear understanding of the underpinning assumptions of the system as well as the environment of the adopting organization. Only when this kind of tacit knowledge is integrated into the implementation effort, the organizational members will start to appreciate the value of enterprise system and this integration is one of the most difficult phases in every ERP implementation [16]. The challenge of tacit knowledge sharing is partly due to the fact that the knowledge needed to make processes work may have become so routinized that the performing employees may not be conscious about the separate steps which are gone through in the process and have difficulty expressing it explicitly [10]. When any of these employees are selected as the enterprise system team member, the need for communicating this type of knowledge is surfaced. The knowledge that team members need for enterprise system project is more diverse than the knowledge required for their jobs and is mainly in the form of know-how and individual experiences. Therefore, facilitating the sharing of

5 924 R. Vandaie / Knowledge-Based Systems 21 (2008) tacit knowledge exhausts a great part of the implementation team. Tacit knowledge sharing can be classified into different categories [10]. First category concerns the knowledge sharing within the ERP team and among team members. The team must also interact with other organizational members to gather information about processes across the enterprise and also to keep them informed about the progress of the project and its effects on their jobs. External consultants are also an inseparable part of every ERP implementation project and therefore, knowledge sharing, especially in tacit form, exists between the members of the enterprise system team and the external consultants as well. This is especially important since normally the consulting team leaves the firm after a while and it is up to the ERP team to salvage the knowledge transferred by them into the organization [20,22]. Retaining the knowledge after the transition of the knowledge owner is also an important issue when members of the enterprise system team leave the team for whatever reason at various phases of the enterprise system project. New members can not catch up with what the former member left just by reading the manuals and documents of the project since a major part of the enterprise system knowledge gained by the former member was in tacit format. Tacit knowledge sharing facilitators during enterprise system implementation can be classified into two categories [28,20,10]: structure of team interactions and atmosphere of the team. Structure of team interactions refers to factors that determine and structure the interactions between team members. For example, the physical work space where the team is assigned to work in can affect the pattern of interactions among team members [28]. Hierarchy of the team membership is another structure factor that influences the tacit knowledge sharing. Atmosphere of the team considers the factors that are less tangible and define the behavioral norms within the team. This atmosphere might make team members feel inhibited from openly sharing their opinions or inversely, foster open communication of ideas. Depending on the organizational strategies, firms may choose to emphasize one of the two tacit knowledge facilitators for tacit knowledge sharing in enterprise system teams. For example, the project managers in one of the companies in Jones case study [10]organized the team based on process rather than functions while deemphasizing ranks and seniorities and providing equal bonus to all team members. They also made knowledge sharing part of the contract with the external consultant. Such a structure that governs team interactions facilitates sharing of tacit knowledge during the enterprise system project. Another company in the same study focused more on providing an atmosphere where team members felt free to express ideas and others were willing to listen. There were also off-site meetings arranged for team members to provide more intimate knowledge sharing atmospheres which could help preserve knowledge while people transitioned on and off the team. Although tacitness of the enterprise system knowledge is the most important characteristic of ERP knowledge which is reflected in the literature, the effects of the process-based nature of ERP knowledge is also addressed in many research works [14,29,17]. Process-based nature of knowledge implies that organizational processes embed substantial knowledge of the organization s history and paradigms and since this knowledge is not confined to a specific mind s cognition and is stored in form of processes, it can be regarded as the organizational memory. Viewing the enterprise system knowledge from the lens of organizational memory has certain implications for enterprise system knowledge management in terms of its enabling or impeding factors in ERP projects. The following sections review the issues related to enabling and impeding effects of organizational memory on ERP knowledge management. 9. Process-based nature of ERP knowledge through the lens of organizational memory Organizational processes embed substantial knowledge of the organization s history and paradigms that can be brought to bear when making decisions in ERP projects [29]. As a matter of fact they can be regarded as the organizational memory since they are not confined in a specific mind s cognitions and are stored in form of processes [17]. Process modeling is used to translate process knowledge into models that can be used to configure the enterprise system and adjust the organizational processes. One important issue in enterprise system implementation is determining the extent to which organizational processes need to be changed to fit into the enterprise system framework and the extent to which the enterprise system must be customized to address existing routines in the organization. The process knowledge and paradigm in the firm may not necessarily be the same as the one incorporated within the enterprise system [23] and if this mismatch is not reconciled, it is expected that the ERP implementation will be sub-optimal. One way of approaching this issue is to have a clear understanding of the underlying structure and organizational culture behind the processes and to interrelate them with ERP knowledge incorporated into best practices. The perception of the process-based organizational memory regulates the handling methods in dealing with the mismatches during ERP projects [29]. One extreme of such behaviors is to adopt the entire process knowledge from the new system and change the organization s paradigm accordingly. On the other extreme it could result in extensive customizations of enterprise system to incorporate the organization s process knowledge and paradigms into the system. Considering processes as a medium for organizational memory, Stijin and Wensley [29] suggest that the new processes introduced by enterprise system may well embed some, but by no means all, of process knowledge that resides in organizations. Careful considerations are necessary in identifying exactly where different types of process knowledge reside in organizations and decisions will have to be made as to what type of process knowledge can be integrated into the new system and what other types will continue to reside in other memory media [34]. Moreover, interactions must be available among the process knowledge stored in these different media so that informed decisions can be made and the knowledge can be updated as the enterprise system project progresses. Huang et al. [9] describe the dynamics of the process by which existing organizational memory and processes knowledge is modified as a result of implementing the new ERP system. They argue that organizational processes as representations of cross-functional knowledge are continuously redefined by the various initiatives implemented in the organization. As mentioned before, this echoes the concept of organizational memory which is constantly reconfigured through incremental or fundamental changes. The impact of ERP-induced business process redesign (BPR) on the patterns of organizational memory in the organization under study in [9] was found to be in the form of the redirection of knowledge flows across the organization. The organizational memory was previously shaped around fostering organizational boundaries which served as vales in controlling the availability and accessibility of information. Adopting the enterprise system tended to reshape the organizational memory in a way that minimized the information boundaries. Nevertheless, they also suggest that although the enterprise system facilitates the free flow of information, the challenge of knowledge integration may still be remaining and despite the successful implementation of enterprise system and benefits from ongoing capital investment, patterns of organizational memory might be deviating from the ideal ERP knowledge integra-

6 R. Vandaie / Knowledge-Based Systems 21 (2008) tion requirements, which in turn can flaw the implementation in the long run. 10. Organizational memory, barrier or enabler? In their exploratory study of ERP implementation issues, Robey et al. [23] discovered that most of the managers in their study who were involved in implementation projects reflected a concern with learning and knowledge. These managers believed that the main barrier to a successful enterprise system implementation was the firm s knowledge of existing systems and business processes. In other words, they saw the so-far-shaped organizational memory as an obstacle to acquiring the knowledge paradigm of the new system. Managers who were trying to comprehend the new business processes enabled by the enterprise system needed to reconcile the demands for new knowledge with their knowledge of old systems and procedures. The issue reflected in this case study raises the question of whether or not the organizational memory embedded in its processes acts as a barrier to enterprise system implementation. ERP implementation challenges established knowledge of the organization in two ways. First, packaged format of ERP allows little customization. Second, as enterprise system replaces existing legacy systems, it also replaces the processes supported by those systems that requires the organization to assimilate new business processes and manage its consequences. Old processes are deeply embedded into organizational memory which induces some sort of resistance against assimilating the best practices. In addition, organizational memory is supported by organizational structures which might even exacerbate the resistance during the change process. Typically high and medium level managers traditionally enjoy great autonomy in the organizational structure and processes [3]. Enterprise system is designed to restructure a processcentered paradigm in the organization [32]. As a consequence, enterprise systems typically require organizations to get rid of most of their organizational memory about technical infrastructures and especially, about their business processes. Most firms have had built information systems to support existing processes prior to implementing enterprise systems; while by implementing the ERP system, they are using it to change their business processes [17]. These new demands require substantial organizational learning, and different firms use a variety of means for overcoming knowledge barriers associated with it. In simple terms, implementing an enterprise system means that organizations must learn to function in radically different ways than what they have learned during the course of past experiences. Ignoring this essential characteristic of ERP implementation can heavily hamper the success of the whole project. Arranging powerful core enterprise system implementation teams and effective utilization of external consulting are believed to be effective methods of dealing with the knowledge barriers connected with assimilating new processes and overcoming resistance due to past organizational memory [9,29,23]. Core ERP teams that stay together, act coherently and are motivated by incentives to finish the project are very influential to overcoming knowledge barriers. Core teams become a key repository of new knowledge that facilitates the transition of the organizational memory to the new knowledge paradigm. They also help to distribute knowledge throughout the organization as they come into contact with users and start transferring their expertise to others. If organizations manage to retain the core team, the transformation and transition of the organizational memory can be completed and the essential knowledge integration will be accomplished [29]. However, retaining an effective core team is not easy since as repositories of practical knowledge, members of core teams became valuable to other organizations, especially consulting companies, which regularly extend lucrative offers to ERP-Savvy employees. External consultants also operate as intermediaries who facilitate organizational learning by bringing in external knowledge [33,23]. ERP technology is new and complex for many firms and it is difficult for a company to embark on such an endeavor without external knowledge. With their expertise in configuring the organizational processes and adjusting them to the new system, consulting partners act as accelerators of organizational learning and alleviate the negative effect of the organizational memory of old processes. However, most successful firms limit their dependence on consultants and take measures to ensure the transfer of external knowledge into the organization [8]. Effective use of consulting requires a firm to remain in control of the consultant-client relationship and make sure that the requisite knowledge is transferred into the organization so that the possibility of resuming the past status of organizational memory under the resistance force is minimized. 11. Conclusion and discussion By means of a rather comprehensive review of the literature on enterprise system knowledge management, this paper investigated the major concerns of the different lines of research which arise as the consequences of two distinct characteristics of ERP-specific knowledge: tacit and process-based nature of enterprise system knowledge. Fig. 1 summarizes these two areas of concern in enterprise system knowledge management along with their facilitators that moderate their negative effects which are identified to be prevalent in cases studied by different researchers. The first area concerns the effects and implications of the tacit chunk of ERP-specific knowledge. The subject of tacit knowledge management is addressed extensively in the literature and different issues along with their respective mitigating solutions are provided in various research works [16,5,10]. Tacit knowledge sharing facilitators during enterprise system implementation are classified into two categories [28,20,10]: structure of team interactions and atmosphere of the team. Proper utilization of each method can assist the adopting organization in overcoming the difficulties of tacit knowledge sharing. Organizing communities of practice composed of the different groups involved in different stages of the enterprise system life cycle is one way to overcome the difficulties of transferring such knowledge from where it resides to where it is needed. In case of running the enterprise system project on distant locations [18], virtual communities centered around company intranets or the internet acts as the facilitating bridge among separate bodies of knowledge across the entire enterprise. Process-based nature of organizational knowledge, is the second area of concern in enterprise system knowledge management which was examined from the lens of organizational memory. Organizational processes embed substantial knowledge of the organization s history and can be regarded as the organizational memory. Viewing the ERP knowledge through the lens of organizational memory sheds light onto some interesting issues of concern in ERP implementation projects. Arranging powerful core enterprise system implementation teams and effective utilization of external consulting were identified to be among most preferred methods of dealing with the knowledge barriers connected with enterprise system configuration caused by difficulties associated with organizational memory. The standardization which results from adopting the same best practices of enterprise system packages by many organizations might give rise to concerns about loosing competitive advantage. In particular, the two subjects reviewed here are very illustrative

7 926 R. Vandaie / Knowledge-Based Systems 21 (2008) Fig. 1. Two major areas of concern regarding the management of enterprise system knowledge and their respective facilitators. with this regard. The competitive advantage arises from the organization s capabilities in internalizing and integrating the adopted processes and their knowledge paradigm into the organization during the enterprise system implementation project. Part of this capability could be in the form of restructuring the organizational roles in order to increase knowledge transfer and fill the gap between the knowledge base of employees and knowledge requirements of the ERP system [16]. Tacitness of a great part of enterprise system knowledge implies that an effective knowledge management policy must be in place along with the ERP implementation project to ensure that the implementation is not simplified to installing a software package and the organization is actually reinforced by the essential enabling elements of the enterprise system. Along with tacit knowledge management, the ability of handling the challenges originated from previously shaped organizational memory of process knowledge also contributes to the competitive advantage for the organization. To the extent that the internalization of tacit knowledge is leveraged and the resistance against the assimilation of the process knowledge of the best practices is overcome during the ERP project, it is expectable that the new system will add to the competitive advantages of the adopting organization. References [1] M. Alavi, D.E. Leidner, Review. 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