Using a knowledge management evaluation framework for improving an ERP system - a Hong Kong construction industry case study

Organisations need to rely on leadership, information support and human capital in order to ensure a knowledge advantage over their competitors. Knowledge management (KM) provides organisations with sustainable competitive advantage, because it becomes extremely difficult for an organisation to cut expenditure and increase revenue by simply reengineering its business model. Project delivery and success has been traditionally viewed and measured as management of a three-legged stool, with the legs defined as cost, schedule and quality. However, KM can be linked to success by organisations becoming more effective as well as being more efficient.

This paper uses a KM framework, the Knowledge Advantage (K-Adv), developed initially for use by construction organisations. It assesses the impact of leadership and its supporting information communication technology infrastructure on the ability of people (by effectively creating, sharing, disseminating and using knowledge) to facilitate sustainable competitive advantage.

A case study that is presented is based upon the experience of a leading construction company using an Enterprise Resources Planning (ERP) system to demonstrate the effectiveness of KM from a cost management business unit perspective. Results are evaluated using a capability maturity model (CMM) - that forms the core of the K-Adv tool - to help improve processes that meet the needs of the organisation operating in a highly dynamic business environment. The case study is part of a broader doctoral research project that uses action learning to facilitate and measure ERP improvement.

Using a KM framework to evaluate an ERP system implementation

Purpose – Competitive advantage can be gained in several ways including gaining a knowledge advantage (K-Adv). This paper sets out to report on the first stage of broad study to assess the effectiveness of implementing an enterprise resource planning system (ERP) from a knowledge management (KM) perspective.

Design/methodology/approach – The study used a survey of a small but representative group to gain feedback in their experience of using the ERP system. Results are evaluated using a KM framework, the knowledge advantage (K-Adv) capability maturity model (CMM) tool that was initially developed for use by construction organisations to assess the impact of leadership and its supporting ICT infrastructure on the ability of people (by effectively creating, sharing, disseminating and using knowledge) operating in a highly dynamic business environment.

Findings – The K-Adv framework analysis for the study indicates that the ERP system was seen as a useful tool for cost management and that its deployment effectiveness is mainly dependent on human-to-human knowledge transfer about how to make the ERP system work. Also, how leaders in organisations facilitate and support people is a critical enabler of the ERP system deployment. The K-Adv CMM tool was useful in making sense of the degree of organisational maturity from a KM perspective.

Practical implications – The findings first highlight the usefulness of focusing on people-support in using the ERP adoption in this organisation's context and, second, they illustrate how a CMM tool like the K-Adv can be used to evaluate KM practices.

Originality/value – The likely effectiveness of use of an ERP is well-known. However, the originality of the paper is twofold. First, it explains effective ERP application drivers and inhibitors from a KM perspective. Second, it tests and adapts a tool that helps evaluate KM effectiveness and assists better understanding of how these practices are enacted from a cost management business unit perspective.

Australian quantity surveyors utilize ICT and ERP system improving efficiency

Despite Information Communication Technology (ICT) can help to improve efficiency and Enterprise Resource Planning (ERP) system has been widely perceives as an efficient mean, diffusion rate is slow in construction industry and amongst quantity surveying profession. Today, quantity surveyor must frequently communicate with other stakeholder throughout the design and construct process and using information technology is a must. The more technologies evolve, the more quantity surveying with change and evolve to utilize these technologies. This paper, through literature review, firstly identifies perceived benefits of using ICT/ERP system, secondly concludes the critical success factors that may affect decision of adopting ICT/ERP tool in practice, and thirdly to suggest three effective evaluation tools before/after implementing ICT/ERP strategy. The ultimate goal is to advise how Australian quantity surveyors (QS) can utilize ICT and ERP system to improve efficiency.

Contractor quantity surveyor using ERP system in cost reporting

Quantity surveying is the key profession in cost management for construction business. However, construction industry is notorious in using information technology that makes reporting inefficient. A construction company in Hong Kong has been using an enterprise resource planning system as the information communication technology in management and cost reporting backbone since 2003. This paper investigates if such system represents an efficient tool for quantity surveyors and any intervening actions are required to enhance its efficiency. In doing so, a team of surveyors interviewed and then the soft system methodology was used as the research approach to depict the situation. This leads to the improvement needs and list of actions. Participants have prioritized working closely with top/senior management to design a proper report format; avoiding unnecessary adjustments and undue influence to reporting, and ensuring accurate data as the top three critical actions crucial for reliable cost reporting.

A Proposal for System Performance Evaluation for an ERP Knowledge Extraction Model

Much has been researched and discussed in the importance played by knowledge in organizations. We are witnessing the establishment of the knowledge economy, but this "new economy" brings in itself a whole complex system of metrics and evaluations, and cannot be dissociated from it. Due to its importance, the initiatives of knowledge management must be continually assessed on their progress in order to verify whether they are moving towards achieving the goals of success. Thus, good measurement practices should include not only how the organization quantifies its knowledge capital, but also how resources are allocated to supply their growth. Thinking about the aspects listed above, this paper presents an approach to a model for Knowledge extraction using an ERP system, suggesting the establishment of a set of indicators for assessing organizational performance. The objective is to evaluate the implementation of projects of knowledge management and thus observe the general development of the organization.

A comparative analysis of major ERP lifecycle implementation, management and support issues in Queensland Government

This paper reports on a study of ERP lifecycle major issues from the perspectives of individuals with substantial and diverse involvement with SAP Financials in Queensland Government. A survey was conducted of 117 ERP system project participants in five closely related state government agencies. A modified Delphi technique identified, rationalized and weighed perceived major issues in ongoing ERP life cycle implementation, management and support. The five agencies each implemented SAP Financials simultaneously using a common implementation partner. The three survey rounds of the Delphi technique, together with coding and synthesizing procedures, resulted in a set of 10 major issue categories with 38 sub-issues. Relative scores of issue importance are compared across government agencies, roles (client vs implementation partner) and organizational levels (strategic, technical and operational). Study findings confirm the importance of this finer partitioning of the data, and distinctions identified reflect the circumstances of ERP lifecycle implementation, management and support among the stakeholder groups. The study findings should also be of interest to stakeholders who seek to better understand the issues surrounding ERP systems and to better realise the benefits of ERP.

A role mining inspired approach to representing user behaviour in ERP systems

Despite all attempts to prevent fraud, it continues to be a major threat to industry and government. Traditionally, organizations have focused on fraud prevention rather than detection, to combat fraud. In this paper we present a role mining inspired approach to represent user behaviour in Enterprise Resource Planning (ERP) systems, primarily aimed at detecting opportunities to commit fraud or potentially suspicious activities. We have adapted an approach which uses set theory to create transaction profiles based on analysis of user activity records. Based on these transaction profiles, we propose a set of (1) anomaly types to detect potentially suspicious user behaviour and (2) scenarios to identify inadequate segregation of duties in an ERP environment. In addition, we present two algorithms to construct a directed acyclic graph to represent relationships between transaction profiles. Experiments were conducted using a real dataset obtained from a teaching environment and a demonstration dataset, both using SAP R/3, presently the most predominant ERP system. The results of this empirical research demonstrate the effectiveness of the proposed approach.

ERP systems in the higher education sector : a descriptive study

In response to a range of contextual drivers, the worldwide adoption of ERP Systems in Higher Education Institutions (HEIs) has increased substantially over the past decade. Though this demand continues to grow, with HEIs now a main target market for ERP vendors, little has been published on the topic. This paper reports a sub-study of a larger research effort that aims to contribute to understanding the phenomenon of ERP adoption and evaluation in HEIs in the Australasian region. It presents a descriptive case study conducted at Queensland University of Technology (QUT) in Australia, with emphasis on challenges with ERP adoption. The case study provides rich contextual details about ERP system selection, customisation, integration and evaluation, and insights into the role of consultants in the HE sector. Through this analysis, the paper (a) provides evidence of the dearth of ERP literature pertaining to the HE sector; (b) yields insights into differentiating factors in the HE sector that warrants specific research attention, and (c) offers evidence of how key ERP decisions such as systems selection, customisation, integration, evaluation, and consultant engagement are influenced by the specificities of the HE sector.

Identifying critical success factors of ERP Systems at the higher education sector

In response to a range of contextual drivers, the worldwide adoption of ERP Systems in Higher Education Institutions (HEIs) has increased substantially over the past decade. Though the difficulties and high failure rate in implementing ERP systems at university environments have been cited in the literature, research on critical success factors (CSFs) for ERP implementations in this context is rare and fragmented. This paper is part of a larger research effort that aims to contribute to understanding the phenomenon of ERP implementations and evaluations in HEIs in the Australasian region; it identifies, previously reported, critical success factors (CSFs) in relation to ERP system implementations and discusses the importance of these factors.

Transaction mining for fraud detection in ERP Systems

Despite all attempts to prevent fraud, it continues to be a major threat to industry and government. Traditionally, organizations have focused on fraud prevention rather than detection, to combat fraud. In this paper we present a role mining inspired approach to represent user behaviour in Enterprise Resource Planning (ERP) systems, primarily aimed at detecting opportunities to commit fraud or potentially suspicious activities. We have adapted an approach which uses set theory to create transaction profiles based on analysis of user activity records. Based on these transaction profiles, we propose a set of (1) anomaly types to detect potentially suspicious user behaviour, and (2) scenarios to identify inadequate segregation of duties in an ERP environment. In addition, we present two algorithms to construct a directed acyclic graph to represent relationships between transaction profiles. Experiments were conducted using a real dataset obtained from a teaching environment and a demonstration dataset, both using SAP R/3, presently the predominant ERP system. The results of this empirical research demonstrate the effectiveness of the proposed approach.

Differential effects of ERP systems on user outcomes : a longitudinal investigation

Adopting a model of job enrichment we report on a longitudinal case investigating the perceived impact of an Enterprise Resource Planning (ERP) system on user job design characteristics. Our results indicated that in the context of an ERP geared towards centralisation and standardisation the extent to which users perceived an increase or decrease in job enrichment was associated with aspects such as formal authority and the nature of their work role. Experienced operational employees proficient in the original legacy system perceived ERP system protocols to constrain their actions, limit training and increase dependence on others in the workflow. Conversely, managerial users reported a number of benefits relating to report availability, improved organisational transparency and increased overall job enrichment. These results supported our argument concerning the relationship between ERPs with a standardisation intent and positive job enrichment outcomes for managerial users and negative job-related outcomes for operational users.

An ERP-client benefit-oriented maintenance taxonomy

The worldwide installed base of enterprise resource planning (ERP) systems has increased rapidly over the past 10 years now comprising tens of thousands of installations in large- and medium-sized organizations and millions of licensed users. Similar to traditional information systems (IS), ERP systems must be maintained and upgraded. It is therefore not surprising that ERP maintenance activities have become the largest budget provision in the IS departments of many ERP-using organizations. Yet, there has been limited study of ERP maintenance activities. Are they simply instances of traditional software maintenance activities to which traditional software maintenance research findings can be generalized? Or are they fundamentally different, such that new research, specific to ERP maintenance, is required to help alleviate the ERP maintenance burden? This paper reports a case study of a large organization that implemented ERP (an SAP system) more than three years ago. From the case study and data collected, we observe the following distinctions of ERP maintenance: (1) the ERP-using organization, in addition to addressing internally originated change-requests, also implements maintenance introduced by the vendor; (2) requests for user-support concerning the ERP system behavior, function and training constitute a main part of ERP maintenance activity; and (3) similar to the in-house software environment, enhancement is the major maintenance activity in the ERP environment, encompassing almost 64% of the total change-request effort. In light of these and other findings, we ultimately: (1) propose a clear and precise definition of ERP maintenance; (2) conclude that ERP maintenance cannot be sufficiently described by existing software maintenance taxonomies; and (3) propose a benefits-oriented taxonomy, that better represents ERP maintenance activities. Three salient dimensions (for characterizing requests) incorporated in the proposed ERP maintenance taxonomy are: (1) who is the maintenance source? (2) why is it important to service the request? and (3) what––whether there is any impact of implementing the request on the installed module(s)?

Drivers of ERP Systems´ Business Value

ERP system implementations have evolved so rapidly that now they represent a must-have within industries. ERP systems are viewed as the cost of doing business. Yet, the research that adopted the resource-based view on the business value of ERP systems concludes that companies may gain competitive advantage when they successfully manage their ERP projects, when they carefully reengineer the organization and when they use the system in line with the organizational strategies. This thesis contributes to the literature on ERP business value by examining key drivers of ERP business value in organizations. The first research paper investigates how ERP systems with different degrees of system functionality are correlated with the development of the business performance after the completion of the ERP projects. The companies with a better perceived system functionality obtained efficiency benefits in the first two years of post-implementation. However, in the third year there is no significant difference in efficiency benefits between successfully and less successfully managed ERP projects. The second research paper examines what business process changes occur in companies implementing ERP for different motivations and how these changes impact the business performance. The findings show that companies reported process changes mainly in terms of workflow changes. In addition, the companies having a business-led motivation focused more on observing average costs of each increase in the input unit. Companies having a technological-led motivation focused more on the benefits coming from the fit of the system with the organizational processes. The third research paper considers the role of alignment between ERP and business strategies for the realization of business value from ERP use. These findings show that strategic alignment and business process changes are significantly correlated with the perceived benefits of ERP at three levels: internal efficiency, customers and financial. Overall, by combining quantitative and qualitative research methods, this thesis puts forward a model that illustrates how successfully managed ERP projects, aligned with the business strategy, have automate and informate effects on processes that ultimately improve the customer service and reduce the companies’ costs.

Utilização do método Multicritério AHP, na aquisição de um sistema ERP

The selection of an Enterprise Resource Planning (ERP) system is one of the most sensitive and highest impact processes in the area of information systems and technologies, because it supports and integrates the whole business of an organization. Hence the importance of deciding the best solution in order to contribute to the organization's competitiveness in a global and increasingly demanding market. Therefore, it is essential to provide tools to support decision making, turning complex and often intangible decisions into simple and quantifiable scenarios. This study addressed the adoption of the Analytical Hierarchy Process (AHP) multicriteria decision method to support the selection of an ERP system. The literature review was the source used to obtain the set of the most relevant criteria to be considered in this decision, which were subsequently validated through systematic application of various surveys of experts and people related to the field of ERP systems. To support the application of AHP, according to the model obtained in the study, it was developed a web application that will be available to the general public. The responsible for the acquisition of ERP systems can use it to easily apply the AHP method based on validated decision model. On the other hand, the web application can be used as a validation tool, allowing collecting data for future developments of the decision model.