KNOWLEDGE CREATION IN AN ERP PROJECT TEAM: THE UNEXPECTED DEBILITATING IMPACT OF SOCIAL CAPITAL

1. KNOWLEDGE CREATION IN AN ERP PROJECT TEAM: THE UNEXPECTED DEBILITATING IMPACT OF SOCIAL CAPITAL Professor Sue Newell (Royal Holloway, University of London) + Jimmy Huang & Carole Tansley

2. Enterprise Resource Planning Systems • New IT system designed to integrate corporate activities across globe • Common IT infrastructure & common business processes • Diffused rapidly but success? • Here – consider micro-processes surrounding design & implementation

3. ERP Systems cont. • ERP vs. BPR • BPR – blank sheet • ERP – ‘best practices’ • Change organization to ‘fit’ technology not vv. (Soh et al., 2000) • Business process change rather than technical problems key (Holland & Light, 1999)

4. Research Focus • In-depth case study of project team • Design • Configure system • Integration of knowledge dispersed within & across organizations (Lee & Lee, 2000) • Implementation • Modification/ introduction of org. processes • Gain commitment from users

5. Project Team • Selected on basis of intellectual capital • AND Social capital (Nahapiet & Ghoshal, 1998) • Broadens reach of project team • Social capital mobilized to access knowledge & gain commitment

6. Definitions (Nahapiet & Ghoshal, 1998) • Intellectual capital – the knowledge and knowing capability of the collectivity • Social capital – the sum of actual and potential resources within, available through, and derived from the network of relationships possessed by an individual or social unit. Social capital thus comprises both the network and the assets that may be mobilized through the network

7. Research Methodology • Ethnography – study of the culture(s) a given group more or less share (Van Maanen, 1988); to understand fundamental meanings (Kakabadse, 97) • On-site observation over 18 months • Semi-structured interviews with project team members and process owners • Interviews with project leader monthly

8. Case – Quality Engineering Ltd (QEL) • HR pillar of large organization-wide ERP project (SAP/R3) • Replaced 1600 legacy systems • 2 ‘waves’ of implementation • HR forgotten! But recognized as central

9. Project Team • HR ERP project initiated by HR Director • But no interest in IT! • Passed over initiative to Nick & team

10. Project Team • Nick (project team leader)

11. Project Team • Caroline • IT skills, PT, strategic career reasons

12. Project Team • Bob • HR exp., no IT skill, cut-off from Bristol

13. Project Team • Robin • payroll, IT skills dev., maintained links

14. Project Team • Susan • line role - unhappy, permanent search

15. Project Team • Rebecca • placement student, excited – frustrated

16. Project Team • + 2 IT outsourced company personnel • no ERP experience, no business involvement, never seen job through to completion!

17. HR ERP Project Team • Diverse knowledge needed for project • Personal goals & desires • Nick – emphasized risks • Tendency to face outwards rather than inwards • Used personal networks for personal objectives • Little team cohesion (quotes p. 12/13)

18. Team Activitives • ‘Work package owners’ • Senior managers – ‘process owners’ • Based on functional role • Little involvement or interest • HR Director similarly uninterested (e.g. conference) • Justification problematic – demoralizing • Eventually project put ‘on hold’

19. Discussion & Analysis • Nahapiet and Ghoshal – social capital seen as generally beneficial for org. • Here used for personal goals • Social capital as a private vs. a public good (Leana & Van Buren, 1999) • Project team – need balance between interests of individual & collective • Requires conscious effort to create balance

20. Strategic Exchange • Watson (1994) • Strategic exchange perspective • Personal goals and project goals • Project goals over-ridden by personal goals in context of insecurity • Social capital distracted from focus on project goals • Knowledge sharing community not developed

21. Conclusions • Social capital – appropriable organization • Here appropriated for personal gain • Effects of social capital ambivalent • Strategic exchange – heuristic device

22. Model of the impact of low commitment and project priority on the appropriation of social capital and projectteam community development. Context Low senior management commitment Low project priority Project Team Community Little knowledge sharing & integration within team Social Capital Appropriation Appropriated for personal goal fulfillment Project Team Interaction Outward-facing project team members

23. Strategic Exchange Project Goals/ Requirements Personal Goals/Desires

24. Strategic Exchange in QEL Case Project goals/ requirements Personal goals / desires Project team insecurity

25. Project Team IDEAL SITUATION CASE REALITY

26. Social Capital Ideal type - use Project reality – use SC for SC for benefit of project personal benefit

27. Innovation Processes and Social Capital • Innovation Episodes (Robertson et al.,) • Agenda formation • Design • Implementation • Appropriation

28. Innovation Processes and Social Capital • Social Capital (Adler and Kwon) • Bridging vs Bonding emphasis • Source • Structure – closed (Coleman), open (Burt) • Content – relational (trust and norms) and cognitive (shared understanding) embeddedness • Effects

29. Innovation and Social Capital Inn. Episode Focus Structure Content Effects Types of SC

30. Figure 1. The relationship between the innovation episode and the focus of social capital Agenda formation Implementation Appropriation Design Team Building (bonding) Network Building (bridging) Community Building (bonding) Knowledge Hub Building (bridging)