ESRC Seminar Nottingham University 10 May, 2004

1. Information Systems Strategy, Information Systems and Globalization: when ‘best practice’ meets cross-cultural communicationBob Galliers, Provost, Bentley ESRC Seminar Nottingham University 10 May, 2004

2. Bentley???

3. Bentley – the US’s first business 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.

4. Bentley – the Business School for the Information Age Bentley blends the breadth and technological strength of a university with the values and student experiences of a small college.

5. The campus … and the facilities

6. Center for Marketing Technology

7. The Trading Room

8. Today’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

9. Towards a more inclusive framework for Information Systems Strategizing Source: Galliers, 2001

10. Two 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)

11. Case 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

12. Case 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

13. Implementing 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

14. Efficiency and/or flexibility? • Burns and Stalker (1961):mechanistic versusorganic organizational designs • Mintzberg (1979):machine bureaucraciesversusadhocracies • Senge (1990):adaptive learningversusgenerative learning • March (1991):exploitation versusexploration Flexibility is achieved at the expense of efficiency Hannan & Freeman (1989)

15. 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)

16. Research 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)

17. The 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”

18. The 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)

19. The 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

20. Findings • 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)

21. Mutual reinforcement of ERP and KMS: unintended 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

22. Case 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

23. Globally 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

24. Research Project Activities Interviews • 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)

25. Summary 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

26. Summary 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

27. Summary of Preliminary Findings 3. The reliance upon standardized processes, best practices, development methodologies, and information and communicationtechnologies • 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

28. Summary 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

29. From “Knowledge Management” to “Relationship Management” Through Processes • Standardized methodologies • Best practices • Technological pipelines Through Technologies • Telephone Sametime (IM) • Conferencecalls Webcams • E-mail Video conferences • Bulletin boards On-line discussion groups

30. From “Knowledge Management” to “Relationship Management” Through Processes • Standardized methodologies • Best practices • Technological pipelines Through Technologies • Telephone Sametime (IM) • Conferencecalls Webcams • E-mail Video conferences • Bulletin boards On-line discussion groups Through Face-to-Face

31. Summary Implications • Increasing dependence on ICT in accomplishing distributed work • Substitution of face-to-face interaction for technologically-mediated communication in team building • Development of a more fully realized cost model in project off-shoring, including “hard” and “soft” costs • (Over?)reliance on standardized processes and methodologies in coordinating distributed work • More structured approach to communication

32. Towards a more inclusive framework for Information Systems Strategizing Source: Galliers, 2001