In early time period, information systems were the source for the management of production processes as the production planning and raw material as well in the factory. The global world introduced the diversity of the products in enterprises. Similarly, it added the need to bring up the powerful information systems that is to manage, compete and survive in the complex market. IT emerged an integrated information system, Enterprise Resource Planning (ERP), which was gradually developed (Wei & Wei, 2011).
The Enterprise Resource Planning (ERP) system is an information system designed to integrate and optimize the business processes and transactions in a corporation or an organization (Moon, 2007).
The ERP systems are considerably large. This nature of the systems makes their implementation complex, time-consuming and costly. Furthermore, it is quite riskier to implement ERP and confront multiple challenges to those who implement. Thus as a consequence, it becomes the reason for the companies to discard ERP projects before completion.
One of the key factors is the poor Knowledge Management that results in the failure of ERP implementation projects. ERP projects are differentiated with traditional Information Systems in terms of knowledge. A variety of experiences, perspectives, and abilities are required in ERP projects as knowledge (Suraweera et al., 2007).
The fundamental asset of firms is ‘Knowledge’. As well as, knowledge is shared across individuals, teams and organizations. Therefore, it has emerged as core organizational capability-the ability to create, acquire, integrate, and deploy shared knowledge. The competitive advantage and success resides in not only exploitation of the existing knowledge but along with that the exploration to new one as strategic options (Sambamurthy et al., 2005).
ERP firms define their mission of Knowledge management; “Either to connect those who know or with those who need to know, to convert personal knowledge to organizational knowledge”. In order to overcome the difficulties and management changes, knowledge management can be beneficial as a support to implementation of ERP systems (O’Leary, 2002).
The ERP systems are capable that it can manage the resources efficiently and effectively. IT can be done with providing a total, integrated solution for its information processing needs. The respective capability is not only for the multinational organizations (MN) but for small and medium size enterprises (SMEs) as well (Buonanno et al., 2005).
ERP plays data collection role by performing different functions as keeping the transaction receipts, accounting for payment orders, delivery lists, and invoices for inventory in and out. In order to make decisions for the management’s reference, valuable information is extracted with the business data reached a certain quantity (Chen et al., 2007).
An ERP system follows different phases of the ERP life cycle during its whole life. They are the following: adoption decision phase, acquisition phase, implementation phase, use and maintenance phase, evolution phase and retirement phase (Esteves & Pastor, 1999).
This research is conducted for understanding the “Knowledge Management practices in ERP implementation” and identifying the current status of Knowledge Management in telecom sector of Pakistan. The research will also be helpful in success of ERP implementation in Pakistan and how ERP can be used for effective Knowledge Management.
Research Objectives:
The main aim of this research is to identify the “Role of Knowledge management in ERP implementation” based on the knowledge management practices and activities with respect to Enterprise Resource Planning (ERP) implementation.
The following specific objectives will be addressed:
uTo identify the role of knowledge management in ERP implementation.
uTo understand the importance of knowledge management in effective decision making.
u To understand the benefits of knowledge management systems in the organization.
uTo describe the role of Knowledge Management in successful implementation of ERP in an organization.
Research Questions:
A descriptive case study will be conducted in the telecom sector of Pakistan. Interviews of the top management will be conducted. Following broad interview questions will be covered;
Question-I:
How Knowledge Management creates value to organizations through implementing ERP?
Question-II:
What role can Knowledge Management play in pre implementation, implementation and post implementation stages of ERP in the organization?
Question-III:
What Knowledge Management practices are used and implemented?
Significance of Research:
Knowledge Management is the discipline of enabling individuals, teams and organizations to create, share and apply knowledge collectively and systematically that to better achieve their objectives. If the goal is to achieve the implementation of Enterprise Resource Planning (ERP) in the organization, the knowledge management has a significant impact on it.
This research identifies the role of Knowledge Management before, during and after ERP implementation that are specific to PTCL. It helps in creating awareness of the concept “Knowledge” in PTCL by highlighting the importance of ERP implementation through Knowledge Management.
The major obstacle for the development of many organizations is a key point that is the lack or minimal of awareness to the concept of Knowledge management and respective associated benefits of this system. Just like the same, they don’t know how to train people to practice in knowledge management activities.
Most of the organizations are engaged commonly in the activities of collection and storage of data but they have adopted an ignorant behavior as well towards the concept of re-usability of data. It requires that there is a need to develop and follow the knowledge management strategy that supports industries for their growth and development. Implementing ERP through Knowledge Management plays a vital role for gaining competitive advantage.
ERP implementation has been adopted and emphasized by number of organization in developing countries. This research will be helpful in creating awareness of implementing ERP practically in better and effective manner.
LITERATURE REVIEW Chapter 2As background to the study, it comprises different aspects with respect to the Knowledge Management and Enterprise Resource Planning-ERP implementation.
1. What is Knowledge?
Knowledge is an elementary asset for firms in the modern economy. It is disseminated across not only the individuals, but the teams, and the organizations as well (Sambamurthy & Subramani, 2005).
Davenport and Prusak pointed out at their book entitled “Working Knowledge” that knowledge situates at the peak of three-story pyramid as in Figure 1: The structure of Knowledge (Tsai et al., 2006).
Adopted from: (Tsai et al., 2006) Figure 1: The structure of KnowledgeThe foundation of knowledge is data and information. Data symbolizes the raw facts without meaning; information is what is extracted by the data that is organized in a meaningful context, while knowledge is illustrated as the meaningfully organized accumulation of information. Thus, knowledge should be managed appropriately and with awareness (Rezaie1 et al., 2009).
There mainly defined are the two Categories of Knowledge; tacit and explicit knowledge (Worley et al., 2005; Lee et al., 2007; Sambamurthy & Subramani, 2005).
“Explicit knowledge” is the result of the ‘‘learning’’ of the company e.g., documented policies, procedures, scientific formulae, specifications, manuals, etc., while in contrast ‘‘tacit knowledge’’ mainly participates to ‘‘know-how’’ e.g., personal expertise, insights, intuitions, and so on (Worley et al., 2005; Lee et al., 2007).
1.1. Importance of Knowledge:Knowledge is gradually more important for an organization; with the passage of time it has become a significant asset of the companies, and even supplementary finances, the market. The significant attributes to it may refer to that it can help personnel to enhance capacity and skills, as well as to get better products and services. Additionally, it is also supporting to the organizations in order to improve the organizational structure, develop a better organizational system and locate proper way outs to the problems (Qin & Yang, 2008).
Knowledge is a composite notion. There are a number of dynamics that determine the nature of knowledge creation, management, valuation, and sharing. How the organizational knowledge is createdIt is done by cycles of combination, internalization, socialization, and externalization (See Figure 2: The Knowledge transformation model).
Figure 2: The Knowledge transformation model Adopted from: (Tsai et al., 2006)As Knowledge is of two forms i.e., tacit (know-how) and explicit (know-what), in such a way it transforms the knowledge between tacit and explicit approaches (Sambamurthy & Subramani, 2005).
A better strategic approach to competitive advantage is not only to exploit the existing knowledge but to explore the new one too; exploring new comprehensions may result in achieving competitive edge along with taking advantage of the existing data and information or the knowledge resources (Sambamurthy & Subramani, 2005).
2. What is Knowledge Management?
Sustainable competitive advantage can be acquired as a result of a successful Knowledge Management. Many researchers have projected KM frameworks; it generally refers to the set of processes or practice of developing in an organization capable to create, acquire, capture, store, maintain and disseminate the organization’s knowledge (Rezaie1et al., 2009).
According to Ron Young, CEO/CKO Knowledge Associates International, Knowledge Management is defined as;
“Knowledge Management is the discipline of enabling individuals, teams and entire organizations to collectively and systematically create, share and apply knowledge, to better achieve their objectives.”While According to Davenport and Prusak (1998), KM is defined as follows:
“Knowledge management is concerned with the exploitation and development of the knowledge assets of an organization with a view to furthering the organization’s objectives. The knowledge to be managed includes both explicit, documented knowledge, and tacit, subjective knowledge.” 2.1. Knowledge Management Practices:Knowledge management (KM) is also defined as the management of information and knowledge and their usage in organizational routines processes within organizations. The important major focus involve the direction-finding of strategy, identification and communication of different types of knowledge that be inherent in processes, people, products and services so that it may support collaboration and as well as its integration in order to improve productivity and efficiency (Kanjanasanpetch’ & !gel’, 2003).
Knowledge activities of an organization may refer to a process to create a shared knowledge. It’s to put experience into knowledge and the organizations must encapsulate the mission and conclude experience, consequently transform knowledge into the organization (Qin & Yang, 2008).
Knowledge management is active organizational strategy. Knowledge Management ensures that people can get the knowledge in time at the time most needed. In such manner, individuals can share the knowledge and put into practice afterwards. At last it can also help to achieve the purpose to improve the organizational performance. Knowledge management is extremely a complicated process; it is based on the strategies as well as the support of the leadership, culture, assessment and technical factors, and so on (WU & PANG, 2009).
Figure 3: OVUM Structures for Knowledge Exchange and Integration Adopted from: (Tsai et al., 2006)The main objective of the knowledge management refers to an integrated system to exchange and sharing of knowledge. According to Tsai, Chang, and Chen, OVUM also proposed a model for the exchange of knowledge (See Figure 3: OVUM Structures for Knowledge Exchange and Integration) (Tsai et al., 2006).
It refers to the link between the tacit and the explicit knowledge. It also includes different processes as Sharing, Capture, Classification, and Understanding (Tsai et al., 2006).
1.1. Issues to Knowledge Management:Issues faced in organization with respect to knowledge management have been an important aspect to the research study. In order to perform the business activities in efficient way, it requires well-organized knowledge management that may lead to organizational creativity, operational effectiveness, and quality of products and service (Guo et al., 2006).
The issues or the problems faced: In order to make the decisions, one of the problem is the coordination of the knowledge to the individuals or groups in the organization. There is a need to understand the knowledge distribution patterns that may be facilitated by the information technologies. Knowledge transfer is also another problem that may be because of the absorptive capacity of individuals or troubled transfer due to contextual nature of knowledge. Knowledge sharing and reuse should also be considered well. Research also suggests that “those who are helped are viewed as less competent than those who provide help” (Sambamurthy & Subramani, 2005; Srivardhana & Pawlowski, 2007).
KM is new practice in the business organizations but KM is also one of the challenging areas that is implementing, managing and supporting the ERP systems in today’s businesses. The implementation of ERP systems in Sri Lanka has encountered failures in terms of time, cost and scope (Suraweera et al., 2008).
Different issues can be resolved if ERP implementation is better integrated with the knowledge management systems. With the integration, the system can manage physical as well as knowledge assets for achieving competitive advantages (Guo et al., 2006).
2. Enterprise Resource Planning (ERP):
Enterprise Resource Planning systems, commonly known as ERP, are the enterprise wide systems. They are integrated which automate core corporate activities that may include manufacturing, human resources, finance and supply chain management. With the use of such system many improvements can be acquired by the companies for example: easier access to reliable and consistent information, exclusion of redundant data and operations, cycle times may be reduced, increased efficiency and reduction of costs as a consequence (Baki et al., 2005; Newell et al., 2003).
The strong advancement of ERP systems has been considered with the superior competitiveness that may be result from the increase productivity along with reduction in costs, as well as improving decision quality and resource control, in this manner enabling leaner production. It may be said that ERP systems are the source for better organizational efficiency. Thus, the best practices defined by the organizations with better capture of information and redesign of organizational structure (Newell et al., 2003).
The use of information technology can be a competitive tool that is based on computer to support decision-making, also aligned with corporate strategy. In order to cope with the corporate goals and business needs of delivery, quality, and cost control, a selected ERP solution should be able to support decision-making. The Right ERP solution can act as an excellent decision support tool to achieve competitive advantage (Baki et al., 2005).
The aim of the ERP package is to integrate all key business activities. It can be done by the improved associations at all levels so that competitive advantage to be achieved. It may be considered ERP systems as an IT infrastructure that’s able to ease the flow of information between all business processes in an organization (Kanjanasanpetch’ & !gel’, 2003).
ERP implementation is neither the success path way nor full of benefits at all (Suraweera et al., 2008). According to Qin & Yang, “It is very complex to implement ERP, because it involves various knowledge transfer problems including the inner corporate, the corporate and the implementation parties.”
Qin & Yang proposed that the ERP implementation process is the flow, transfer and exchange of the ERP knowledge, the management tools and methods, the characteristics of the enterprises and the inner corporate explicit and tacit knowledge inside the corporate and amongst the corporate, the implementation party and the consulting company (Qin & Yang, 2008).
2.1. Importance of Knowledge to ERP Implementation:ERP system is considered critical to many firms as to the enduring operations or activities of the company. It also represents their largest IT Investment. It provides a point that different knowledge capabilities (generation, combination-recombination and exploitation of knowledge) can lead as a source of competitive advantage (Srivardhana & Pawlowski, 2007).
ERP knowledge has been increasingly gained the depth and popularity. The swift growth in the ERP market persists to grow; in order to improve the efficiency and the management, many managers will pin their hopes on ERP implementation (Qin & Yang, 2008).
Importance of Knowledge to ERP Implementation (Supply-side view): ERP is neither common software, nor its implementation a simple IT project. It requires not only the technical support of the software suppliers for an improved blend of the software function and the corporate business, but also the whole process contribution of the special consulting company (Qin & Yang, 2008).
It means that the supplier should not be responsible for not only the supply of the software and related document, but requires the client necessary training; that includes the function, module structure, information flow, and so on. As well as the consultants are to exploit their experience in order to restructure the corporate business process and transform to the rate of right results in progress (Qin & Yang, 2008).
Where the software supplier can better identify the real practice of the corporate and transform its software, similarly the consulting company can also well recognize the advanced idea of the company as well as form a deeper understanding of the entire trade business (Qin & Yang, 2008).
Qin & Yang build a comprehensive knowledge transfer ERP system: Expert transfer system (experts), Serial transfer system (entire process of department) and Near transfer system (exchanges between organizations).
Importance of knowledge to ERP (ERP projects view): The knowledge created during ERP implementation and management is a significant resource for an organization. It must be properly managed. The creation of knowledge and sharing is supposed to take place at each phase of ERP implementation, as well as post-ERP Projects (McGinnis & Huang, 2007).
Knowledge is an important deliverable in ERP projects. It provides four main benefits; (McGinnis & Huang, 2007)
1.Project managers can visualize how KM can be incorporated to address specific project needs. 2.IT managers can achieve cross-project knowledge integration that would have otherwise been lost. 3.Organizations can control the relative knowledge gain so that to improve their processes more than non-knowledge oriented project. 4.Building on documented knowledge provides more current and accurate information to the central support organization. In this way, it can be re-used to reduce and minimize future project costs.3. Enterprise Resource Planning (ERP) Pre, During and post Case:
Yusuf et al. analyzed a case of ERP implementation in 2004 of Rolls-Royce. Rolls-Royce is a truly global business offering a range of first class world leading products. The company provides facilities over 14 different countries and it also deals with other offerings as after sales services, covering mechanical overhauls and spare part distribution (Yusuf et al., 2004).
It is said that the precise information systems and direct communication with suppliers are vital in order to offer customers a dedicated promise to deliver (Yusuf et al., 2004).
Before implementation: Rolls-Royce had been incorporated over 1500 systems before the project of ERP implementation was started. The incorporated legacy systems were expensive to operate and it was difficult to maintain and develop. Therefore in order to maintain good and in time decision making and assessment of performance, these systems were not sufficient to provide accurate, consistent and accessible data (Yusuf et al., 2004).
The problematic era was not related to communication perspective only but it did not support significant growth of the business. These systems were not sufficiently responsive to keep pace with the changing business environment (Yusuf et al., 2004).
Implementation: The ERP project was being carried out involving a management team of specialists from the external outsourcing company EDS. The project implementation problems were grouped into three areas of cultural, business and technical difficulty. The core implementation teams accounted for the needs of both the managerial and end-user (Yusuf et al., 2004).
Post Implementation: It was proposed different benefits; an immediate benefit will be the ability to promise and timely delivery to customer. This was that the older systems could never achieve, as they often used due dates that were in the past. SAP can only use current information. In such a way it’ll lead to: improvement in customer satisfaction & customer confidence, increased lead time of orders, and also improve customer confidence, improvement in supply chain management (Yusuf et al., 2004).
It was also concluded that there is the need to look the sustainability of enterprise information systems (EIS) during the post-implementation period. The reason is the lack of clear understanding about the strategic needs and requirements for sustaining the effectiveness of large-scale information systems after a period of relative stability following initial implementation (Yusuf et al., 2004).
4. Integration of Knowledge Management and ERP:
At different levels of the organization, it encompasses a set of various forms of data, information, and knowledge. Research suggests that knowledge management is functional in ERP where a proper implementation of ERP creates a link among the areas of the enterprise (Guo et al., 2006).
The proper management of two types of assets has been recognized by the modern organizations; physical assets and knowledge assets (Suraweera et al., 2008; Guo et al., 2006). Therefore the management of knowledge assets demands the integration of KM and ERP systems that becomes a strategic initiative (Suraweera et al., 2008). It is advantageous to implement both ERP and knowledge management in the enterprises as a consequence. It may result in competitive advantage to the enterprises (Guo et al., 2006).
Knowledge management can be integrated with ERP and thus the business processes can be managed. The business transaction activities can be integrated by ERP systems. In order to process the transaction, the information acquired can help a firm to plan their activities such as production and knowledge management can also be useful for a number of activities. As a result, ERP may be a better information platform for knowledge capturing, storing, sharing, and innovating (Guo et al., 2006).
The availability of new exterior knowledge is made possible by the ERP systems with the ‘‘best practices’’, along with the knowledge from vendors and consultants engaged in system implementation and support (Suraweera et al., 2008; Srivardhana & Pawlowski, 2007). Both researchers and practitioners have provided important consideration to knowledge sharing during the ERP implementation in developed countries. There are some strategies to overcome KM issues in Table 1: Some Strategies to overcome KM Issues (Suraweera et al., 2008).
Table 1: Some Strategies to overcome KM Issues Adopted from: (Suraweera et al., 2008)An enterprise consists of different areas as customer relation, manufacturing, human resource, financial management, and supply chain management functions. A successfully implemented ERP provides a link between all these area and form a highly integrated system with shared data (Guo et al., 2006).
ERP systems assist KM related activities in a number of ways. For example, potential knowledge is to be explored by ERP systems’ support; they trace expert-owned specialized knowledge, and disseminate and employ knowledge of business processes. In view of that, KM is increasingly critical for the success of ERP implementations (Suraweera et al., 2008). The integration of ERP and knowledge management can result into use or reuse knowledge for ERP purpose (Guo et al., 2006).
The implementation of ERP systems and knowledge management is widespread as organizational initiatives. The transfer of the human knowledge is an important issue. The reason is that ERP systems have been developed as more collaborative systems (Park & Hossain, 2003).
There are ERP products that provide software components to facilitate knowledge management. SAP is an example of it that provides solutions for knowledge management and transfer. It is integrated into an interface to share with a variety of other components of the system (Guo et al., 2006). According to O’Leary, “SAP’s ‘‘Knowledge Warehouse’’ is aimed at managing unstructured knowledge and delivering it to those who want or need that knowledge. SAP’s Business Information Warehouse, a data warehouse, is used to manage structured data, typically generated from the ERP system.”
A successful ERP system causes to restructure the processes in the organization in order to improve the overall effectiveness, while providing a means to externally enhance competitive performance, raise responsiveness to customers, and sustain strategic initiatives (Gargeya & Brady 2005).
Integration rationale: The integration of ERP and knowledge management has been proved as necessity for small and medium enterprises for the future perspective (Metaxiotis, 2009).
Metaxiotis proposed a conceptual model for the integration of ERP and KM as illustrated in Figure 4: Conceptual Model.
The proposed model shows, an integrated transaction processing system is provided by ERP. It also provides access to information that covers multiple business functions e.g., financial and accounting, human resources, supply chain and customer services. The main base for the ERP system is the central database. A central database and knowledge base is developed as the result of integration of ERP and knowledge management. This integration collects information and knowledge from, and feeds information and knowledge into, modular applications supporting all of a company’s business activities. It results in automatic update of related information and knowledge, when new information and knowledge is entered in one place (Metaxiotis, 2009).
Figure 4: Conceptual Model Adopted from: (Metaxiotis, 2009)In ERP different parts in enterprise are integrated in order to improve the internal organizational efficiency. In this way employees use less time to perform tasks, while KM can lead to the required competitive advantage so that to compete (Metaxiotis, 2009).
Research Methodology Chapter 31. Nature of Research and Technique:
This research is quantitative in nature, as it is based on the interviews and discussions with the top management of the Pakistan Telecommunication Company Limited (PTCL). A descriptive case study will be conducted in this sector.
2. Aim for the Adaption of Interview Approach:
The interview approach has been adopted and conducted in order to find the role of knowledge management in the implementation of Enterprise Resource Planning (ERP) & to know knowledge management practices in terms of ERP and its implementation in PTCL.
3. Background of Interview Questions:
The broader interview questions are established with the help of Literature Review. The interview session with the top management of PTCL has been conducted (Interview questions are appended in Appendix: A). Interviews with top management have helped us in understanding role of KM in PTCL before, during and after ERP implementation.
4. Findings of Interviews and output:
The findings of these interviews have been analyzed along with the literature review, which is transformed into final output then. The final output has been generated about how Knowledge Management supports the ERP before, during and after implementation.
Findings and Analysis Chapter 41. Interview Session:
The research has been carried out by the technique of Interview Questions. The interview session was conducted by the interviewees’ of the organization – PTCL (Pakistan Telecommunication Company Limited).
Interview session has been conducted for the research purpose comprising “A Case study on Knowledge Management practices in the ERP Projects of the Organization”. Senior Manager to ERP Project Implementation has worked by the start to the selection of the system. He is responsible for the SAP Administration. The ERP Project has been initiated by March-2007 that has now reached to maximum 90% level of completion.
1.1. Answers to Interview Questions:1. What priority is assigned to knowledge management by top management of your organization?
According to manager;The prior level of importance was given to the knowledge management. For this, initially they developed a website with the feature of authorization property given to the particular users. Moreover, they carried on with availability of training CDs, books in the printed form.
“Now with the implementation of new ERP system, the SIM files are generated where the tutor provides the knowledge of important alerts.” 2. How does knowledge management provide support during ERP design phase?3. What are the sources of knowledge in your organization?
To the source of knowledge practice adopted was FAQ’s initially.In order to organize the information ‘As-is’ processes and SAP processes are integrated. This organized information is retrieved on the basis of need afterwards. Knowledge management helps in identification, creation and representation of the desired processes in the organization.
Manager stated that;
“Currently, PTCL has established shared portal containing important documentations with defined ways/ instructions to access and use the portal.”Along with that CRM is implemented that is totally based on the knowledge management.
4. Do you think, knowledge management is important and essential for ERP implementation?
The view of Manager was;Knowledge management is important and essential in ERP implementation because if the strong KM system is present, it would not be affected by the turnover of the employees.
“KM is not about to know anything, its all about the strong management of Knowledge. For ERP implementation and its best performance knowledge is properly managed as there are number of practices of Knowledge management. Therefore knowledge management has significant role in the implementation of ERP in the organization. ” 5. At what points knowledge is systematically captured in the organization?“The systematic approach used by the PTCL was to capture the knowledge through the online database, which involves the access to the information by search words e. g., use of keywords, with the relevant date etc. Now shared portal features the content based search as well.”Stated by Manager;
6. How does knowledge management support ERP during its implementation phase?
“The ERP system has been placed as Centralized system. Knowledge management done by the organization, by providing the access of information (documentations) to users, result into almost 60% cost reduction.”Manager said;
The manger supported his statement with the example as;
“For examples, as the instruction manuals help the users to know about how to use it, that also counts to more time consumption and costly if training sessions are given more time. The left time would be used for the other activities of better achieving objectives.”7. What is your opinion about achievement of reduction in cost and time through or with the help of knowledge management?
If time is given to other to make them understand about the systems. For the solution documentations are prepared.
The manger revealed a point that;
“However, as the documentation is formed manually that somehow arises the problem of misleading due to the human errors to instructions.”8. Does knowledge management enhance employee advancement while working in ERP system? The Manager highlighted the point with respect to resistance of employees to sharing information;Knowledge is an important asset of the organization.
“Knowledge management leads to enhance the level of performance of employees but there is also the problematic concept of hiding the information; people resist sharing their information or hesitating in order their work to bring in front of others.”9. How much time does an employee take to get the relevant knowledge from the ERP system of the organization? Gathering information depends upon what employee want to access and how the system is organized in a systematic way. The employees working in PTCL utilize lesser time to gather the relevant knowledge because of the defined parameters and specific tools which are highly organized.
10. What knowledge management practices (if any) are used by your organization?
11. Are you facing any problems in data/knowledge gathering and migration? The knowledge is stored in form of website, CDs, Sim files and shared portals. The knowledge is stored on the basis of end user requirement as well as auditing purpose. PTCL retains the documented information for approximately 3-10 years. The record keeping is based upon the policies made by the organization. The maturity level of documentation is also important. PTCL was recommended to use 4.6 versions while 6.4 versions were in the benefit of PTCL.
According to the Senior Manager; on the knowledge gathering and migration stage, PTCL is not facing any problems except manual working of the documentations as users can access knowledge timely.
12. What is the current level/status of knowledge management in your organization? “If we categorize knowledge mgt status in three levels, high medium, low. PTCL is working on the medium level.”The Manager provided that;
Therefore the level is not much high.
13. What strategy did you use in your organization for knowledge management? 14. Did your organization provide timely training to various users of your ERP system; before and during implementation of ERP? PTCL has used different strategies for managing its knowledge such as, shared portal, websites, emails and books in the printed form. The level of adoption of the strategy to use books in the printed form, is very low. More preference is given to the other strategies excluding the storage limitation factor as they need to easy access.
Manager stated that;
“Before ERP implementation, the training was conducted at functional level in the form of organized training sessions and during the implementation the training was based on end user roll out and sim tutor. In PTCL the ERP system-SAP was the successful implemented project in history.”15. Do you think new ERP system has enhanced knowledge & skills of primary users of the organization? 16. Did you collect any information from your vendors regarding their knowledge about ERP (before implementation)? There were 530 employees for the working of commercial account Lahore dealing with the particular transactions with the implementation of new ERP system enable 30 employees to handle the working.
In order to implement the ERP system PTCL calls for the vendor selection process. Manager described briefly about the vendor selection process; this process involves vendors into bidding process against ‘Request for Proposal (RFPs)’.
The Senior Manager stated that;
“PTCL received RFPs from almost 10 vendors. A scale is divided into 5 classes was formed w.r.t required information needed by the functionaries. PTCL negotiated with the vendors through functionaries that it didn’t involve the ERP team. In this way, it provides to better evaluate the best system against the requirements.”17. Did you involve any consultants before ERP implementation? General Manager of ERP Project had been hired as consultant. PTCL also consulted to the firms in US and Malaysia as well for technical designing implementation.
18. How does ERP and knowledge management help top management in effective decision making?
19. How do you mange the tacit knowledge in your organization? Timely and correct decision making is a key to success of a business. In PTCL, ‘SAP Reporting Visibility’ is most important for the effective decision making. U-fone is also working with PTCL in it.
The Manager told us that PTCL has adopted different concepts to transform the tacit knowledge, a valuable asset of the organization as;
Brainstorming Sessions: One way to manage the tacit knowledge is that vendors and ERP Project teams meet together in the early mornings and set a particular target that is reported in evening time slot at the end of the day. The next day progress is reviewed.
Training Concept: Training provided to the employees allows the organization to judge the level of employees. It means that what is the level of employees in terms of skills as communication, writing, technical, or management skills.
Magazines: PTCL also provided the opportunity to employees to share their knowledge and working efforts.
20. What are the problems your organization is facing in practicing knowledge management during operational phase of ERP?
The Senior Manager exemplified the problem encountered at operational level;At the operational level of ERP, PTCL encountered problem of wrong instructions provided. In order to access particular knowledge stored in databases, different codes are used.
“For example, PTCL instructed to enter the key “SAP MReP” to access the documents; however the correct form was “SAP MR3P” and it was missing to press the enter key in instructions too. This problem remained till 1 month, after that ERP Project team reviewed and sort out the solution.”Another problem era is having knowledge about the particular functional area. Sometimes, employees are asked to engage in working activities apart from their line that they are not expert into.
According to Senior Manager, the consideration must be;
“Right person for the right Job”In this way, it also increases workload of employees as they are to work in their particular line area as well as in the asked area too. It results in overburden that disturbs the working efficiency of employees.
21. Do you think, with the use of ERP system software, the data or knowledge, used by your employees is more accurate than it was before ERP implementation? With the SAP, PTCL is enjoying the beneficial advantage; there are checks and stages in the SAP. For example, complete logs are maintained for salary checks. In addition, Proper process is followed for auditing purpose and feedback mechanism.The data was in scattered form and No visibility was there before the ERP implementation.
22. What are different levels of access of users to the ERP system?
According to Manager;
“PTCL incorporates Module wise segregation – Groups of different users are made and particular authorization is provided to them. “User Authorization Matrix” is generated involving checks on the objects from reengineering to implementation and vice versa.”This authorization is also provided on the basis of the need of users as well.
2. Case-Study (PTCL):
The case study comprised on the ERP Project implementation of PTCL and encompassing advantageous benefits of ERP implementation along with the Knowledge Management.
2.1. Companies’ Background:PTCL is all set to redefine the established boundaries of the telecommunication market and is shifting the productivity frontier to new heights. Today, for millions of people, PTCL demands instant access to new products and ideas.
2.2. ERP system implementation Project: Table 2: SAP ERP Implementation in PTCL Initialization of ProjectMarch – 2007 Estimated time for completion18 months Implementation CorporationSiemens (Pakistan) Engineering Co. Ltd SAP SolutionSAP – E-business suit (version 6.4) 1st milestone achieved31st October, 2007 FunctionariesHR, Finance, Project systems etc. Operating firm with PTCL PTCL 2.2.1. Introduction:The focus of the project is to set up and maintain the qualifications catalogs, create and evaluate profiles for a range of objects (for example, persons and positions), evaluate career and succession planning scenarios, set up appraisal systems, as well as plan, hold, and evaluate appraisals, create development plans, and work through individual development planning scenarios by customizing the functions of personnel development to meet customer requirements.
The interviewee – Senior Manager to ERP Project Implementation has worked by the start from the selection of the system. He is responsible for the SAP Administration. The ERP Project was initiated by March – 2007 that has now reached to maximum 90% level of completion. The Plan estimation was made of 18 – month time period to completion of the Project. The 1st milestone was achieved till 31st October, 2007.
2.2.1.1. Project Background:It is known that ERP is the collection of integrated activities. Initially, PTCL has implemented core ERP – it was established but it was not the integrated system. There was the need of an integration system for achieving business goals and objectives and perform the business processes at maximum best level.
For the purpose, PTCL conducted the study for ERP implementation. The organization applied for different companies to incorporate the ERP system. The best selected organizations comprised;
Siemens – E-business Suit (SAP) IBM – E-business Suit (Oracle) Figure 5: Seimens – SAP ERP Implementation in PTCLPhase: A1ERP Project implementation was categorized to different phases of levels;
Phase: A2 Phase: B Figure 6: Phases of ERP ImplementationPTCL moved forward to SAP by adoption of particular steps. PTCL also studied different processes according to requirements of functionaries; as ‘As-Is’ and ‘To-Be’ processes. The selection of vendors and functional consultants for the processes to implement was the next step that resulted into the final documentation known as blueprint. If blueprint was not accurate to the requirements given to the vendor or functional consultant, then the penalty would be charged to them.There are the standard systems available for ERP systems. As the functionaries of the organization are specific to their particular activities, so it was necessary to move with the Customization according to functionaries.
At the most important phase of ERP implementation user acceptance testing was done where the deficiencies and limitation were rectified. The next step was to roll out – engage employees in training and then deploy to actual process.
Table 3: Steps to SAP ERP Implementation The strategy for the future change requirement was also formed, involving timeline as for the development, testing or implementation. The reason for selecting SAP was that it was the best fit to the requirement of PTCL.
2.2.2. Knowledge Management and ERP:Knowledge Management is of great importance that is also suggested by many authors in literature (Qin & Yang, 2008). PTCL initially launched a website that incorporated the feature of authorization property given to the particular users. The prior level of importance has been given to the knowledge management. Furthermore, they carried it to availability of training CDs, and books in the printed form in order to provide users with available information.
According to manager;
“Now with the implementation of new ERP system, the SIM files are generated where the tutor provides the knowledge of important alerts.”With the passage of time PTCL step forward according to the business needs that they involved in integrating activities to Knowledge Management. Currently, PTCL has also established shared portal. They also captured the Knowledge in a systematic way with the help of online database with advanced features.
The view of Manager was;
“KM is not about to know anything, it’s all about the strong management of Knowledge. For ERP implementation and its best performance knowledge is properly managed as there are number of practices of Knowledge management. Therefore knowledge management has significant role in the implementation of ERP in the organization. ”Knowledge is an important asset of the organization. Knowledge management leads to enhance the level of performance of employees as also proposed by Qin & Yang, 2008. It is found another problematic concept of hiding the information; it means that often people resist sharing the information or having a factor of hesitation for their work to be disclosed to others.
As ERP system is very complicated that it engages team members and system users into intensive interaction. The interaction among the individuals involve constant knowledge creating, sharing, mining, maintenance, and learning among members. As a consequence, it is important to establish a well-structured knowledge management mechanism. In this way it can support the interactions as well as reduce the impact of the ‘brain drain’ caused by the exit of team members. In addition, an effective knowledge management mechanism allows better performing with the effective ERP system implementation (Tsai et al., 2010).
2.2.3. Situations before ERP Implementation:PTCL had initially established an ERP system to carry out the business activities. Although there was an ERP system but it was not an integrated system. Before the ERP was implemented in the Organizations, it dealt with multiple issues as with respect to accessibility of knowledge and training costs.
Manager stated that;
“Before ERP implementation, the training was conducted at functional level in the form of organized training sessions and during the implementation the training was based on end user roll out and sim tutor. In PTCL the ERP system-SAP was the successful implemented project in history.”Before the ERP implementation, the data was in scattered form; there was no visibility of data that is it was hard to access and proceed with proper available information. With the SAP, PTCL is enjoying the beneficial advantage; there are checks and stages in the SAP. For example, complete logs are maintained for salary checks. In addition, Proper process is followed for auditing purpose and feedback mechanism.
The training cost would result in terms of time cost. As stated by the manager, it was more time consuming to provide training at individual level and search out the information for use. It was also mentioned that there were 530 employees for the working of commercial account Lahore dealing with the particular transactions before ERP implementation that may be the reason to increase costs. The implementation of new ERP system enables 30 employees to handle the working.
2.2.4. Implementation of ERP:It’s not easier to implement ERP without managing the knowledge assets of the organization. In order the functionaries to perform the business activities in better way they were in need of an integrated system in PTCL. For the reason, PTCL initiated an integrated ERP project in March 2007.
The potential reason for the failure of the ERP implementation process is the lack of suitable training even if companies’ spent a lot. Majorly, many experts are hired during implementation course (Mashari, 2002).
In PTCL General Manager of ERP Project had been hired as consultant. PTCL also consulted to the firms in US and Malaysia as well for technical designing implementation.
ERP vendors concentrate on customization process. It is needed to match the ERP system modules to the actual features of existing processes. The Research have also represented that configuring and implementing ERP systems is a complex and expensive task (Buonanno, et al., 2005).
For the implementation of ERP system PTCL called for the vendor selection process. This process involved vendors into bidding process against Request for Proposals (RFPs). PTCL received RFPs from almost 10 vendors. A scale was divided into 5 classes was formed with respect to required information needed by the functionaries. PTCL negotiated with the vendors through functionaries that it didn’t involve the ERP team. In this way, it provides to better evaluate the best system against the requirements.
Literature suggests that right choice to ERP solution is also a critical success factor. Certain considerations for the choice of the package involve important decisions, for example, budgets, timeframes, goals, and deliverables etc. (Baki & C?akar, 2005).
PTCL selected SAP keeping in view the requirements of the functionaries and business processes. PTCL studied different processes as ‘As-is’ and ‘To-Be’ processes and evaluated to ERP software selection as needed to requirements.
2.2.5. Operational level of ERP Implementation:After the phase of ERP implementation, the next step comes is the maintenance. It requires sufficient data sources, or else the delivery of information to enterprises for decision-making activities cannot be possible (Tsai et al., 2010).
The manger revealed a point that;
“However, as the documentation is formed manually that somehow arises the problem of misleading due to the human errors to instructions.”At the operational level of ERP, PTCL encountered problem of wrong instructions provided. The manually created documents encountered the problem. In order to access particular knowledge stored in databases, different codes are used. The Senior Manager exemplified the problem encountered at operational level;
“For example, PTCL instructed to enter the key “SAP MReP” to access the documents; however the correct form was “SAP MR3P” and it was missing to press the enter key in instructions too. This problem remained till 1 month, after that ERP Project team reviewed and sort out the solution.”Users demand for the modifications after the implementation of the system. Thus, the user requirements, experience, and knowledge serve as feedback that helps to improve system performance. Hence, the effectiveness of the ERP performance lies in the ability of the system to produce real-time integrated information (Tsai et al., 2010).
2.2.6. Knowledge Management in ERP Implementation:ERP implementation along with the knowledge management practices provides a contextual benefit to organization at different levels.
The Manager provided that;
“If we categorize knowledge mgt status in three levels, high medium, low. PTCL is working on the medium level.”Giving the medium level to Knowledge Management, ERP system was placed as Centralized system. With the ERP system and Knowledge management done by the organization, PTCL gained the advantage of almost 60% cost reduction. The time cost can be saved by providing instructions instead of time consumption to formal training environment.
A successfully implemented ERP provides a link between all these area and form a highly integrated system with shared data (Guo et al., 2006).
In order to process the transaction, the information acquired can help a firm to plan their activities such as production and knowledge management can also be useful for a number of activities. As a result, ERP may be a better information platform for knowledge capturing, storing, sharing, and innovating (Guo et al., 2006).
PTCL has used different strategies for managing its knowledge such as, shared portal, websites, emails and books in the printed form.
According to Manager;
“PTCL incorporates Module wise segregation – Groups of different users are made and particular authorization is provided to them. “User Authorization Matrix” is generated involving checks on the objects from reengineering to implementation and vice versa.”The knowledge is stored on the basis of end user requirement as well as auditing purpose. PTCL retains the documented information for approximately 3-10 years. The record keeping is based upon the policies made by the organization. The maturity level of documentation is also important.
The implementation of ERP systems and knowledge management is widespread as organizational initiatives. The transfer of the human knowledge is an important issue. The reason is that ERP systems have been developed as more collaborative systems (Park & Hossain, 2003).
PTCL has adopted different concepts to transform the tacit knowledge, a valuable asset of the organization as;
Brainstorming Sessions: One way to manage the tacit knowledge is that vendors and ERP Project teams meet together in the early mornings and set a particular target that is reported in evening time slot at the end of the day. The next day progress is reviewed.
Training Concept: Training provided to the employees allows the organization to judge the level of employees. It means that what is the level of employees in terms of skills as communication, writing, technical, or management skills.
Magazines: PTCL also provided the opportunity to employees to share their knowledge and working efforts.
In order to cope with the corporate goals and business needs of delivery, quality, and cost control, a selected ERP solution should be able to support decision-making. The Right ERP solution can act as an excellent decision support tool to achieve competitive advantage (Baki et al., 2005).
Timely and correct decision making is a key to success of a business. In PTCL, SAP Reporting Visibility is most important for the effective decision making. U-fone is also working with PTCL in it.
On the whole Benefits of Knowledge Management to employees are as follows;
Information access to users Managers search for different articles on needed information and share them to others Feedback, reviews and target meetings are also beneficial to employees.CONCLUSION Chapter 5
The study comprises of multiple sides with respect to the role of Knowledge Management Practices in ERP implementation. What role knowledge management plays in order to implement ERP systemsThe different phases of the ERP implementation are to be integrated with the knowledge management. The analysis of Pre, during and post implementation provided contextual output to the respective era of research.
The most challenging projects also encompass implementing an ERP system that is undertaken by any company. Success is not easy to achieve and it is obvious that most companies implement ERP systems just to stay competitive (Gargeya & Brady, 2005). Knowledge is an important deliverable of ERP projects that yields different benefits (McGinnis & Huang, 2007).
The study provides insights the facet to implementation of ERP. The importance to the integration of knowledge management practices and ERP implementations is of potential value. Knowledge management practices are as important as implementing ERP projects in the way to success. Knowledge management has been considered in terms of ERP implementation as Pre, during and Post implementations of ERP systems.
At one side to the right choice of ERP solution that best matches the organizational information needs and processes ensures successful implementation and use. To the counter side, the incorrect software is not the best match to the organization’s strategic goal or business (Baki & C?akar, 2005).
The SAP ERP Implementation was the successful project in the history of PTCL. Organization Implemented SAP also involving vendors and consultants. The consultants were given importance in order implement ERP hired from outside the country. Vendors’ selection process was as the business process of the organization. The ERP implementation was done through the Blue Print provided by the vendors that is finalized for actual deployment in the organization.
How actually PTCL managed before, during and operational level ERP implementationPTCL faced different problems regarding access to data, time management and like before the ERP to be implemented. They counter these problems while the designing of ERP Project. PTCL adopted different strategies to in order to resolve different issues as knowledge management, time management, and cost management etc. The SAP system implemented provided a competitive advantage to cost reductions to 60% almost.
However, sharing of knowledge is managed with the authoritative property and on the basis of needs; the resistance of employees to knowledge sharing is also common. The employees must be motivated and trained in the way that sharing of knowledge is not the loss of knowledge but it may result in further increase in knowledge if managed properly.
Even though, the organization had moved from core ERP to integrated system of ERP, some other best practices can be adopted in order to better integrate the knowledge management and ERP implementations. For example just like as the ITL framework of PTCL that requires knowledge management at the essential level, there are automated systems available for the knowledge management that can be adopted for practice.
The problem area that was pointed out was the manual preparation of documentation for the knowledge management. The consideration must be that how can better deploy the solution to the problem and utilize the automated working system based on the requirements and feasible to functionaries.
ERP system development involves the coordination of a number of users and developers in terms of their implementation efforts. It encounters many problems to users and developers during the implementation phase. Therefore, there is a need to keep a record of those problems. The record keeping can help to address the problems and found solutions (O’Leary, 2002). The Right ERP solution can act as an excellent decision support tool to achieve competitive advantage (Baki et al., 2005).
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APPENDIX: A:Interview Questions:
A descriptive research study is conducted that identifies the role and importance of Knowledge management based on Knowledge Management practices and activities with respect to Enterprise Resource Planning (ERP) implementation. Specific objectives of this study are;
1) To identify the role of knowledge management in the ERP implementation,
2) To understand the importance of knowledge management in effective decision making,
3) To understand the benefits of knowledge management systems in the organization,
4) To describe the role of Knowledge Management in successful implementation of ERP in your organization.
The organizational data will be held in strictest anonymity and will be used purely for research purpose.
General Questions:
1) Do you have knowledge management system/application available that people are using for any knowledge management practices in the organization or for the routine jobs?
2) What is your opinion about developing knowledge management system/application/culture?
3) What is the role of knowledge management in information system?
4) What is the impact of knowledge management in the pre, during and post stages on the implementation of ERP?
5) What are the benefits of knowledge management to employees?
6) To what extent ERP helps to support and to develop knowledge management infrastructure or culture of organization
